The ( EWO ) helps identifying where you are in the 5-3 , mainly the highest/lowest values of the oscillator might indicate a potential / Wave 3. Mathematically expressed, EWO is the difference between a 5-period and 35-period moving average based on the close. In this study instead 35-period, Fibonacci number 34 is implemented for the slow moving average and formula becomes ewo = (source, 5) - (source, 34)
The application of the theory in real time trading gets difficult because the charts look messy. This study (EWO-S) simplifies the visualization of EWO and plots labels on probable reversals/corrections. The good part is that all plotting’s are performed on the top of the price chart including a histogram (optional and supported on higher timeframes). Additionally optional Cloud added to help confirming the price actions.
What to look for:
Plotted labels can be used to follow the occurrences and most importantly they can be considered as signals for possible trade setup opportunities. Rules and /Extensions are suggested to confirm the patters provided by the EWO-S
Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely
Disclaimer: The script is for informational and educational purposes only. Use of the script does not constitutes professional and/or financial advice. You alone the sole responsibility of evaluating the script output and risks associated with the use of the script. In exchange for using the script, you agree not to hold dgtrd TradingView user liable for any possible claim for damages arising from any decision you make based on use of the script
non-repaint version made optional (default repaint version)
many many thanks for your highly valuable comments @sotiri 🙏
Entry/Exit Price Assumption default value changed from hlc3 to close
1-) Historical Data Evaluation
in the real-time processing when the condition is satisfied to avoid repainting the signals are presented on the next bar, this feature was already available with this study
change implemented with this update is to made historical data evaluation behavior same as real-time behavior and all plotting, statistical panel calculations are performed based on the next bar
- traders will observe the same behavior both in real-time and in historical bars (even when the study is reloaded)
- trade statistics will display whatever the user traded on the real-time bars with the signals generated
- since the signals are generated on the next bar, “Entry/Exit Price Assumption” input necessity is no longer required, trades with the backtest framework will be assumed as open price on the next candle
2-) Early Warning : Alert + Label
As a rule as explained above, signals are triggered on the next bar in case the condition is still valid and the logic of the study is already aware of the likelihood of an signal occurrence on the next bar but the trader who is analyzing the chart is not (according to this study’s logic of course). So to increase the awareness, with this update ;
- a label with a warning sign is going to be plotted which of course is subject to repaint but will warn the trader to keep eyes closer on the instrument and proceed trading immediately on the next bar if the signal is confirmed and presented on the chart.
- for the same warning also an alert is defined (using new alert() function call), so the trader will be able to be notified with the probable not yet confirmed trade opportunity in advance, even if the trader is not monitoring the instrument.
Having said that, I would like to remind : Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely.
3-) Improved Conditions
Since the long/short conditions are triggered on next bar there might be cases where a sudden change in price direction may occur especially in sideway market conditions with low volatility, so to avoid such cases the conditions are improved.
Please note : stop loss condition will be executed when price fall below the calculated value and trade will be closed with the close price on bar close (not yet able to get the price value at the moment of the cross). Stop loss condition is subject to repainting and to avoid any further loss an alert can be triggered at the moment the first cross is observed. Since stop loss is subject to repaint and in case it happens the statistical panel calculation will not be able to calculate till the bar is closed. You may disable application of stop loss from user dialog box to avoid any inconsistency that may appear on statistical panel and observe results of the trades executed without stop loss.
Other updates in Study
• Signals from Elliott Wave Oscillator are kept as they are (repainting) and modified Alert setup to have two alerts settings, one with the repaint version (early warning as the signals appears on chart) and one non-repaint version (on the next bar if still condition holds true).
• Made Keltner Channels highly customizable by users, besides added alerts related to Keltner Channels, cross over the most upper and middle band and crossunder the most lower and middle band (both 2nd and 3rd Levels)
• Finally, Organized Script Inputs in Sections
Usage info and descriptions:
important note : newly added option for further confirmation based on candle direction may cause repainting. use with caution or for test purpose
made "Candle Direction as Confirmation" and "Avoid Sudden Price Changes" long/shot conditions optional
Important note : If these options are selected Backtest Framework Signals may repaint, use with caution and for test purpose
Please be informed that if any of the "Candle Direction as Confirmation" and "Avoid Sudden Price Changes" options selected Backtest Framework will execute trade simulation on the second bar after the STUDY detects a signal, otherwise on the next bar.
"❗❗❗ Only For Test Purpose (REPAINTS) ❗❗❗" option is for test purpose and when this option is selected the Backtest Framework will simulate trades on the next bar regardless of the above options
Siguiendo el verdadero espíritu de TradingView, el autor de este script lo ha publicado en código abierto, para que los traders puedan entenderlo y verificarlo. ¡Un hurra por el autor! Puede utilizarlo de forma gratuita, aunque si vuelve a utilizar este código en una publicación, debe cumplir con lo establecido en las Normas internas. Puede añadir este script a sus favoritos y usarlo en un gráfico.
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