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Use Elliott Wave

The Elliott Wave, developed by Ralph Nelson Elliott (USA), states that markets have a cycle. It is an analysis method heavily influenced by the Dow Theory. The Elliott Wave states that there are 8 waves in a trend, 5 upwards and 3 downwards, regardless of how long the trend is. In MetaTrader5 (MT5), the upward trend is shown as the "motive wave" and the downward wave is referred to as the "corrective wave". Here, we'll take a look at how to display and adjust the Elliott motive wave.(*1)

(*1)Elliott Wave is not available on MetaTrader4 (MT4).

Step 1

Click "Insert" in the menu. Hover the pointer over "Objects" > "Elliott" and select "Elliott Motive Wave".

Elliott motive wave Elliott motive wave
point Rules for the Elliott Wave
Rules for the Elliott Wave Rules for the Elliott Wave

The Elliott Wave is made up of 8 waves. Waves 1~5 drive the trend and are called the "Elliott motive wave". Waves A~C which adjust the trend is called the "Elliott corrective wave". The motive waves are made up of waves that drive the trend (wave 1, 3, 5) and those that go against it (wave 2, 4). The theory states that the 3rd wave will never be the shortest. The correction waves are made up of waves that correct the trend (wave A, C) and those that go against it (wave B). The rule states that wave C will always have the biggest price gap in the Elliott Wave.

Step 2

Click on the end point of wave 1 of the Elliott motive waves, followed by the end point of wave 2, 3, 4, and 5. If you want to adjust the position of the Elliott motive waves, make sure the white dots are being displayed on the Elliott motive waves and move each dot as necessary.

If you cannot see the white dots, double-click near the Elliott motive waves to display the white dots.

Rules for the Elliott Wave Rules for the Elliott Wave

Step 3

To modify the Elliott motive wave settings, right-click near the Elliott motive waves and select "Properties of (Elliott Wave name)".

Properties Properties

Step 4

On the "Properties" window, edit the parameters in the "Common", "Parameters", and "Visualization" tabs and click "OK".

"Common" tab

Common tab Common tab

Number

Item name

Descriptions

1

Name

Name the Elliott Wave.

2

Description

The description of the Elliott Wave can be displayed on the chart.

Related article: Show or hide items on chart

3

Style

Set the color, line type, and line thickness for the Elliott Wave.

4

Draw object
as background

Check this box if you want to place the Elliott Wave behind the chart.

5

Disable selection

Check this box if you want to disable the editing of the Elliott Wave.

"Parameters" tab

Visualization tab Visualization tab

Number

Item name

Descriptions

1

Anchor point

Specify the end point of the wave to move.

2

End point position

Specify the end point position by date and price.

3

Degree

Specify the cycle for the Elliott Wave.
Grand Supercycle: 100+ years
Supercycle: About 50 years
Cycle: About 10-20 years
Primary: About 3-5 years
Intermediate: About 30-50 weeks
Minor: About 10 weeks
Minute: About 3-5 weeks
Minuette: Dozens of hours
Subminuette: A few hours

4

Lines

Check this box when you want to connect the Elliott Wave with lines.

If the lines are displayed

If the lines are displayed If the lines are displayed

"Visualization" tab

On the "Visualization" tab, you can specify the timeframes to use the Elliott Wave with.

Specify the timeframes Specify the timeframes
knowledge Dow Theory and Elliott Wave

Elliott states in one of his books that "The wave principle, inspired by the Dow Theory, is an indispensable tool for market analysis". In other words, the Elliott Wave is a more sophisticated version of the Dow Theory. Interestingly enough, they both use "waves" as an analogy to describe the market. Elliott often used phrases such as "low tide" and "flow" to explain market behavior, hence the name, "Wave Theory".


Date

Created

 : 2022.09.09

Update

Last updated

 : 2022.11.02

Writer

Takayoshi Nakamaru

Manual production consultant, MBA

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Takayoshi Nakamaru

Nakamaru is a manual production consultant at FINTECS, a company that specializes in creating manuals for their clients.
With a wide range of experience from fintech to entertainment, he presents what user-friendly manuals should be like.
He works with numerous large corporations as an external manual production project manager.

【Business information】
http://www.fintecs.co.jp/profile/

Supervisor

Akira Takagi

Systems engineer, MetaTrader administrator

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Akira Takagi

After graduating from Computer Science at the Uninove, Brazil, in 2014, he has worked on various systems development projects.
He participated as a developer in the launch of forex services in 2019. Since then, he has also been involved in the development of MetaTrader plugins and APIs. He is certified by MetaQuotes as a MetaTrader5 Administrator and active in consulting and advisory as well.

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