Elliot Wave by @DaviddTech

What Is the Elliott Wave Theory?
The Elliott Wave theory is a theory in technical analysis used to describe price movements in the financial market. The theory was developed by Ralph Nelson Elliott after he observed and identified recurring, fractal wave patterns. Waves can be identified in stock price movements and in consumer behavior. Investors trying to profit from a market trend could be described as riding a wave. A large, strong movement by homeowners to replace their existing mortgages with new ones that have better terms is called a refinancing wave.

Basic principle of Elliot Waves
The description of TD D-Wave won’t be complete without a brief review of Elliot Wave theory. Well, let’s see the main wave principle and then, we shall see how DeMark has changed it to eliminate the subjective factors that may confuse us.

As in case with TD Sequential, Elliot Wave theory and TD D-Wave have an obvious advantage that you can apply them to any market or timeframe, irrespective of the basic volatility of the instrument analyzed; and you don’t need to change any default settings of the indicator. With a correct application, both Elliot Waves and TD D-Wave can provide a kind of “road map” of the market direction, which you can use to identify the price targets and determine the points of the potential trend exhaustion.

The most difficult moment in employing Elliot Waves is identifying the final wave. It is sometime impossible to find out if the market is in wave 3 or in wave C or if it is wave 5 broadening.

LiteFinance: TD D-Wave indicator by Thomas DeMark | LiteFinance

Algorithm of Elliot Waves – DeMark’s Waves
DeMark solved this problem by introducing a number of requirements to be met, so that you can determine each TD D-wave; he developed a computer version of Elliot Waves. DeMark's time rules define the least criteria, necessary to complete each wave and start the next one.

TD D-Wave Requirements of Wave 1 in the bullish (rising) market

The origin of the TD D Wave up Sequence is defined once the market records 21 bar low close. The close is less than all twenty prior closes
Once condition one is satisfied, the market must post a thirteen bar high close. A close that is higher than all twelve prior closes. This confirms the origin of the TD D-Wav sequence and establishes that the market is in Wave 1.
Wave 1 isn’t complete until the market records an eight bar low close (a close less than all seven prior closes), which confirms that Wave 2 has been formed.
TD D-Wave Requirements of Wave 2

The first requirement for wave 2 is the last requirement of Wave 1, that is, that the market records an eight bar low close (a close less than all seven prior closes)
Wave 2 continues until the market records a twenty one bar high close. A close that is higher than all twenty previous closes, reinforcing the notion that wave 3 is underway.
TD D-Wave Requirements of Wave 3

The first requirement for wave 3 is the last requirement of wave 2, that is, Wave 2 continues until the market records a twenty one bar high close.
This remains the case until we see a 13 bar low close (a close less than all 12 prior closes), which means that Wave 3 is complete, and Wave 4 is developing.
TD D-Wave Requirements of Wave 4

The first requirement of Wave 4 is the last requirement of wave 3, that is, there must be a 13 bar low close (a close less than all 12 prior closes), which signals that Wave 3 is complete, and Wave 4 is developing.
Wave 4 is considered complete when the market subsequently posts a 34 bar high close(a close higher than all 12 prior closes), representing the onset of Wave 5.
TD D-Wave Requirements of Wave 5

The first requirement of wave 5 is the last requirement of wave 4, that is the market subsequently posts a 34 bar high close(a close higher than all 12 prior closes). It signals that Wave 4 is complete and Wave is going on.
Wave 5 is considered complete when the market subsequently posts a 13 bar low close for Wave A (a close lower than all 12 prior closes), representing the origin of Wave A.
TD D-Wave Requirements of Wave A

The first requirement for wave A is the last of wave 5, that is the market subsequently posts a 13 bar low close for Wave A (a close lower than all 12 prior closes), representing the origin of Wave A.
Wave A is considered complete when the market subsequently posts an 8 bar high close for Wave B (a close higher than all 7 prior closes), representing the start of Wave B
TD D-Wave Requirements of Wave B

The first requirement for Wave B is the last of wave A, that is, an eight bar high close for Wave B (a close higher than all 7 prior closes), representing the start of Wave B
Wave B is considered complete when the market subsequently posts a 21 bar low close – the low for Wave C (a close lower than all 20 previous closes), representing the onset of Wave C.
TD D-Wave Requirements of Wave C

The first requirement for Wave C is the last of Wave B, that is, a 21 bar low close for Wave B (a close lower than all 20 prior closes), representing the onset of Wave C.
Wave C is complete when the market closes below the low close of TD Wave A
Additional rules to apply the TD D-Wave indicator to the bullish trend:

Peak of Wave 3 must be higher than the peak close of Wave 1, and Wave 5 must be above the peak close of Wave 3
If a pullback from Wave 1 is so short that the decline fails to satisfy the condition necessary to initiate Wave 2 and the market subsequently recovers above what had been Wave 1 high close, then Wave 1 will shift over the right in line with the new high close.
If the pullback from Wave 3 is so short that the decline fails to satisfy the conditions necessary to initiate Wave 4 and the market subsequently recovers above what had been the Wave 3 high close, then Wave 3 will shift to the right, according to the new high.
If the pullback from Wave 5 is so short that the decline fails to satisfy the conditions necessary to initiate Wave A and the market subsequently recovers above what had been the Wave 5 high close, then Wave 5 will shift to the right, according to the new high.
Wave 5 will only be complete after Wave C crosses the closing low of Wave. Until that happens, if what had been Wave B closes above the high of Wave 5, then Waves A and B will be erased and Wave 5 will shift to the right.
If Wave 2 closes below the low of Wave 1, then Wave 1 will disappear and the count will begin anew.(it is the same if the low close of Wave 4 closes below the low close of Wave 2, then Wave 2 will shift to where Wave 4 otherwise would have been
Once Wave C crosses the low close of Wave A, Wave 5 is locked into place and cannot move. (Consequently, if the market subsequently closes back above the high close of Wave 5, rather than erasing waves A, B, and C, and move Wave 5 to the right, the indicator will instead label the move to new highs as a fresh Wave 1 advance rather than erasing the previous Wave 5)
Just like in case with TD Sequential, TD D-Wave can be used only provided the market is trending. When the price is moving sideways, TD D-Wave can’t be applied.