Elliott Wave Indicator: Counts by Fixed Rules

What it shows

Two layers. Large waves (from swings with 21 candles on each side) are labelled (1) to (5) and (a) to (c) on thicker lines. Small waves (from swings with 5 candles on each side) are labelled 1 to 5 and a to c on thinner lines. Impulses are blue, zigzags grey. Hovering a label shows how far that wave moved.

How Pravex works it out

1. Two swing lists are built from the last 600 candles. In the large one a swing high must top the 21 candles before it and not be topped by the 21 after it; the small one uses 5 on each side, and lows are mirrored. A swing can only be confirmed once those later candles have closed. Where two highs or two lows follow each other, the more extreme one is kept, so each list alternates.
2. The two lists are searched one after the other, and each gets its own labels.
3. A bullish impulse is six alternating swings starting at a low: wave 1 up, wave 2 down, wave 3 up, wave 4 down, wave 5 up. The rules: wave 2 retraces less than all of wave 1; wave 3 ends above where wave 1 ended; wave 4 ends above where wave 1 ended (so it does not overlap wave 1); wave 5 moves up; wave 3 is not the shortest of waves 1, 3 and 5.
4. After a found impulse the next four swings are tested as a zigzag: a goes against the impulse, b recovers part of a (less than all of it), and c ends beyond the end of a. The search then carries on from the end of wave 5, so the next impulse can start where this one ended.
5. Look for bearish counts mirrors all of this for bearish impulses that start at a high. How waves are measured decides how waves are compared: in price units (Absolute) or as a percent of each wave’s starting price (Percent).
6. Show unfinished count also draws the unfinished count at the end of the chart: an impulse with three or four waves done, or the first two waves of a zigzag after a complete impulse, with the last swing being the running extreme. Show expected waves then adds dotted waves still to come: wave 4 at 0.382 of wave 3 back, wave 5 equal to wave 1 if wave 3 is longer than 1.618 times wave 1 (otherwise 0.618 of the span from the start to the end of wave 3), and wave c as long as wave a.

Settings

Setting	Default	What changing it does
Look for bearish counts	off	Off looks for bullish impulses (starting at a low, five waves up). On mirrors the rules and looks for bearish ones starting at a high.
Show unfinished count	off	Off draws only completed counts. On also draws the unfinished count at the end of the chart, with the last leg dotted; it uses the running extreme since the last confirmed swing, so it moves with every candle.
How waves are measured	Absolute	How wave sizes are compared in the rules. Absolute uses price distance. Percent uses the move as a percent of the wave’s starting price, which treats a move at a high price and one at a low price alike. The hover tip shows the wave in the same unit.
Show expected waves	off	Available only while the unfinished count is shown. Adds dotted lines and labels for the waves still to come in the unfinished count, using fixed ratios (0.382, 0.618, 1.618 and equality).

How traders read it

Use it as a counting aid, not as a signal. Three of the checks are the impulse rules most Elliott wave guides list (wave 2 never takes back all of wave 1, wave 3 is never the shortest, wave 4 stays clear of wave 1); the other two, wave 3 passing the end of wave 1 and wave 5 moving on in the same direction, make sure the legs really travel with the trend. The labels let you test a count of your own against the same rules.

A made-up example: the swings run 100, 110, 105, 125, 115, 130. Wave 1 is 10, wave 2 gives back 5 of it, wave 3 is 20, wave 4 gives back 10 and stops at 115, above wave 1’s end at 110, and wave 5 adds 15. Wave 3 is the longest, so the count passes and is labelled.

When it misleads

Elliott counting is subjective, and the rules are checked on swing points only, so plenty of ordinary swing sequences pass them, so a labelled count is not evidence that the wave theory holds. The large layer needs swings confirmed 21 candles later, and on short charts it may find nothing. The projections are fixed ratios, not forecasts. Counts use confirmed swings only, but a later swing that goes further than the last one of its kind replaces it, and that can break or shift a count. With the unfinished count on, its last point is the running extreme and moves with every candle.

Questions and answers

What rules does the Elliott wave indicator check?

Wave 2 retraces less than wave 1, wave 3 passes the end of wave 1, wave 4 stays beyond the end of wave 1, wave 3 is not the shortest of 1, 3 and 5, and a following zigzag has b shorter than a and c ending beyond a.

Can an Elliott count change after it is drawn?

Yes. A later, more extreme swing of the same kind replaces the last one and can break the count. The large layer needs 21 candles after each swing, so its newest wave arrives late.

What is the difference between (1) and 1 on the chart?

Labels in brackets, (1) to (5) and (a) to (c), come from the large layer on 21-candle swings. Plain 1 to 5 and a to c come from the small layer on 5-candle swings.

What does Show expected waves draw?

Dotted waves still to come in an unfinished count, with fixed ratios: wave 4 at 0.382 of wave 3, wave 5 from wave 1 or 0.618 of the span so far, wave c equal to wave a. It needs the unfinished count switched on.

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