Elliot Wave Indicator MT4 … The forex market is highly promising if you arm yourself with the right knowledge and use appropriate technical indicators. The importance of using forex indicators cannot be overemphasized in view of the fact that they can improve your earning potentials and enhance your trading skills. Plus, technical indicators can help you trade different currency pairs on auto-pilot.
Regardless of your trading history, if you have not traded using the concept of Elliott Wave, then you are missing out on a great deal. The concept requires an in-depth knowledge of the market, plus, advanced analysis methods, and is not commonly used by part-time traders. In this regard, using the Elliott Wave Indicator MT4 is a no-brainer.
You can use this indicator alongside other technical best metatrader indicators so that you don’t do guesswork. This is a good practice to adopt if you are starting with the use of the Elliott Wave concept, or you are entirely new to forex trading. However, before giving you the nitty-gritty of this indicator, let’s quickly run over what the indicator is about and talk about the Elliott wave theory.
What Is Elliott Wave Count Indicator MT4?
The Elliott wave indicator MT4 is one of the many technical indicators used to analyze the forex market for profitability purposes. It is a wave count indicator designed for MT4. This indicator does not draw lines like other indicators; instead, it gives traders wave count in real-time. To use this indicator, it is crucial to understand three things – the nomenclature used, different market cycles, as well as how to count Elliott waves.
The Elliott wave indicator MT4 being automated provides a simplistic view and a visual representation of trading using the Elliott wave concept. It also gives forex signals for potential price points and enables traders to predict future price action.
Furthermore, the indicator is suitable for all time zones and is perfect for all categories of traders. Whether you are a swing trader or scalper, incorporating this indicator to your trading arsenal can improve your earnings over time.
Brief History Of Wave Theory
The Elliott wave theory was developed and published by an addicted forex trader known as Ralph Nelson Elliott in 1938. He explained the concept of Elliott Wave in his famous book published in the same year. Elliott wave theory takes a different approach to technical analysis.
The concept is based on market cycles and is geared towards understanding investors’ or traders’ psychology. The following rules apply when using the Elliott wave theory:
- The concept uses 5 waves to show price movements and their direction in the main trend.
- 3 waves usually move in the opposite direction to the trend.
- The total number of waves you will find on Elliott wave is 8 waves: Minor, Intermediate, Primary, Cycle, Supercycle, Grand Supercycle, Minute, Sub-minuette, and Minuette
- Each wave must comply with Fibonacci levels.
- The longest wave is usually the third wave.
- There is usually a turning point after the third wave; this point is where traders can predict retracement levels.
How To Install Elliott wave Indicator MT4
Installing the indicator is pretty easy and straightforward. Once you are done copy-pasting the indicator to your MT4 indicator trading, the next thing is to drag and drop Elliott wave Indicator onto your chart. There are no complicated settings, plus the configuration window is straightforward to understand.
From the above chart, you can see that the only available setting is how to hide or show the signals. Aside from this setting and the alert color selection option, there are no other settings. Once you can apply the Elliott wave indicator onto your chart, you will get the image below.
The blue alerts you see on the chart are the usual price swing point wave counting. The indicator also gives out target level, plus, buy and sell signals. The screenshot below is what you will get if you apply the indicator on the H4 chart time frame.
Drawbacks Of Using Elliot waves indicator
There are times you will apply this indicator on a trading chart, and you won’t get the right signals. Thus, it is imperative not to follow this indicator blindly, as it is very risky. Before applying it on a real account, it must be tested through a demo trading account. It helps with understanding the ins and outs of the indicator to later execute things accurately on a real account.
We mentioned in the rules above that the Elliott wave Indicator works with Fibonacci levels. If you want to be thorough in your market analysis, you will have to do some legwork, as the indicator doesn’t display Fibonacci levels of retracements or extensions.
Final Thoughts Elliot Wave Indicator MT4
Technical indicators are must-haves if you must succeed as a forex trader. The Elliot wave trading strategy is attractive to many traders across the world. It would be best if you practiced using the Elliott wave Indicator MT4 on different currency pairs to get familiar with it.
Combining this indicator with other trading concepts like resistance and support is another strategy to use. It can create more viable opportunities for traders instead of trading the market using the indicator in isolation. Therefore, incorporating other technical indicators alongside the Elliott wave Indicator MT4 helps increase the chances of succeeding for any kind of trader.
Also, have it at the back of your mind that the forex market is inherently risky; as such, you need to trade with caution and always carry out due diligence before settling for a technical indicator.
There are other trading tools available here for you to take advantage of to boost your earning potentials. Check it through this link to enhance your trading skills.