Hi! I want to ask if anyone can give me their guess on what the black bands on the Elliott Wave Oscillator in the attached images are. I know that the oscillator itself is the difference between the 35 and 5 moving averages. But what are these bands? Any comments are highly appreciated. Dima PS:The images are from Advanced Get.
here is what the developers are saying: A major task in using Elliott Wave Analysis is to identify Wave Three's accompanied with a strong Oscillator. In the past we have done this by visually comparing the size of the current Oscillator with that of the past. The Oscillator Break Out Bands provide an UP Band and a LOW Band. Anytime the software labels a Wave Three, the Oscillator needs to be comfortably above the Break Out Band. We recommend a setting of 80% for these bands. The chart on the left is the Daily Swiss Franc Dec 94 contract. Here the software labels a Wave Three Rally and this rally is accompanied by a strong Oscillator that is breaking above the Breakout Bands. Therefore, this Wave Count can be used for this market at this time. Another example is shown below where the Oscillator is above the Breakout Band and confirms with the Elliott Wave analysis. The Break Out Bands are not just moving averages - they are a proprietary indicator developed by Trading Techniques, Inc.
My guess is it is an indicator that measures momentum, and in that way can identify what exactly is the 3rd Wave, given that Wave 3 is the most POWERFUL in an Elliott Wave sequence. The difficulty with Wave 3's is that they are often "complex" . . . meaning that they sub-divide further into 5 smaller waves.
thank you for your replies....i am still at a loss how these black bands are calculated....can they be adjusted moving averages???
Hi, the bands could be a longer term bollinger band running on the osc. if you normally use 5 & 35 for the EW Osc, the MA length for the base of the bands could be around 70 - 100 I guess. Way more efficient would be to calculate the band levels out of the historical distributions of the osc... good trades, cosmic
thank you very much for your opinion Cosmic, Can you please elaborate on how you think the historical distribution of the oscillator can be used to calculate the bands? Thanks!!!