Identifying Elliott Waves is crucial for professional traders to identify potential trends and prices. To identify these waves, you can use other technical analysis tools such as:
- Elliott wave and Fibonacci retracement levels:
The Elliott wave cycle consists of eight waves plus their five corresponding sub-waves, which make a sequence of Fibonacci numbers (0, 1, 1, 2, 3, 5, 8, 13, 21, 34, etc ). Using Fibonacci tools helps count and predict Elliott’s waves. Each Fibonacci tool is suitable for a specific purpose, So it is better to properly understand each before using them for an appropriate analysis.
- Elliott wave oscillator
The Elliott Wave Oscillator (EWO) helps new traders identify market trends. The EWO generally appears at the bottom of your chart, and usually, the highs and lows of the oscillator represent wave 3. If the oscillator returns to the zero line, it is considered wave 4. If the market trend has an extreme change while the oscillator does not, we are likely facing wave 5.