The waves of Elliott Wave theory are automatically detected and displayed.
It makes it possible to count the Elliott waves almost always correctly and plausibly. However, the tool can only detect wave 3 as well as waves 5, A, B and C. The rest you have to draw yourself.
Sometimes the waves 3 and 5/A/B/C overlap - so I only use the view with wave 3 myself.
A Guide for understanding this Elliott Wave Script
There are 2 bollinger bands channel (blue small one and orange big one) - it helps to identify the trend. The basic method is to identify the local lowest/highest RSI => this is typical the strongest wave 3. So on this example here, you can see an extension 3 of (3):
Look to the 3 in the chart and the highest RSI peak below:
the RSI shows also a green area like shoulder-head-shoulder formation. This is a 1-2-3-4-5 wave:
But you see also it in the middle of a trend -> so this is a wave 3 of wave (3)
Then lets look deeper on 5 min chart. We expect here the end 5th wave. It looks like ending diagonal triangle.
I know, sometimes it's really hard to identify - this is the real world. So I take the RSI again to identify the waves (touching of higher and lower levels for trend changing).
So next question is why some numbers are lighter and some are darker. This script indicates local peaks from 9 different lenght with the same transparent number - the more peaks overlapping the lighter the number -> the lighter the stronger the wave!
In other hand, green color for uptrend and red for downtrend (but the darker the number is, the smaller is the trend that was identified.
5/A/B/C try to identify the end of a trend.
Admittedly, 2 bugs are unsolved - the overlapping of 3 and 5/A/B/C (here is both possible) and really small trends.
I hope it helps to understanding this script.
SECRET TIP (Slide the chart above to the left to see more results of this indicator)