Elliott Wave + SMC Fusion

# Elliott Wave + SMC Fusion

## TITLE:
Elliott Wave + Smart Money Concepts Fusion

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## SHORT DESCRIPTION:
Automated Elliott Wave pattern detection with Smart Money Concepts confirmation, EWO oscillator integration, and confluence scoring system.

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## FULL DESCRIPTION:

### 📊 OVERVIEW

This indicator combines three powerful trading methodologies into a unified system:
- **Elliott Wave Theory** - Automated detection of Wave 1-2 impulse patterns
- **Smart Money Concepts (SMC)** - Order Blocks and Fair Value Gaps for institutional confirmation
- **Elliott Wave Oscillator (EWO)** - Momentum-based signal validation

The core concept is to identify high-probability Wave 3 entries by detecting completed Wave 1-2 structures and validating them with SMC and momentum indicators.

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### 🔧 HOW IT WORKS

**1. Pattern Detection (ZigZag Method)**
- Uses pivot high/low detection to identify swing points
- Validates Wave 2 retracement using Fibonacci ratios (default: 38.2% - 88.6%)
- Requires minimum wave size to filter noise
- Applies confirmation bars to avoid premature signals

**2. Wave Projections**
- Wave 3 target: Fibonacci extension of Wave 1 (default: 1.618)
- Wave 4 retracement: Percentage of Wave 3 (default: 38.2%)
- Wave 5 projection: Extension of Wave 1 from Wave 4

**3. Smart Money Validation**
- **Order Blocks**: Identifies last opposing candle before breakout (institutional footprint)
- **Fair Value Gaps**: Detects price imbalances for potential support/resistance

**4. EWO Confirmation**
- Calculates momentum: (EMA5 / EMA34 - 1) × 100
- Signal line crossovers confirm trend direction
- Strong signals occur at extremes (< -13 or > 13 threshold)

**5. Confluence Scoring (0-100%)**
Points awarded for:
- Fibonacci quality of Wave 2 retracement (10-30 pts)
- Order Block presence (15 pts)
- Fair Value Gap presence (10 pts)
- Volume confirmation (10-15 pts)
- Trend alignment with EMA50 (10 pts)
- EWO confirmation (10-20 pts)

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### 🎯 UNIQUE FEATURES

**Pattern Locking System**
- Once a valid pattern is detected, it locks until:
- Pattern invalidates (price breaks Wave 0)
- Pattern completes (Wave 5 reached)
- Auto-timeout (configurable bars)
- Prevents rapid signal flipping and false alerts

**Signal Stability Controls**
- Adjustable cooldown between signals (default: 20 bars)
- Minimum bar distance between wave points
- Direction change requirement option
- Confirmation bars after Wave 2 formation

**Visual Wave Tracking**
- Solid lines for impulse waves (0→1, 2→3, 4→5)
- Dashed lines for corrective waves (1→2, 3→4)
- Numbered labels on each wave point
- Real-time projection lines to targets

**Comprehensive Dashboard**
- Current wave status and lock state
- Pattern grade (A+ to D based on confluence)
- Projected vs actual wave levels (✓ when completed)
- SMC confirmation status
- Risk/Reward ratio calculation
- EWO trend direction

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### 📈 TRADING APPLICATION

**Entry Strategy**
- Wait for Wave 1-2 pattern detection (diamond signal)
- Check confluence score (>65% = higher probability)
- Verify EWO alignment with pattern direction
- Enter after 30% retracement of Wave 2 (customizable)

**Risk Management**
- Stop Loss: Below Wave 0 (with buffer)
- Take Profit 1: Wave 3 projection
- Take Profit 2: Wave 5 projection
- R:R displayed in dashboard

**Invalidation Rules**
- Price breaks below Wave 0 (bullish) or above (bearish)
- Wave 2 level violated before Wave 3 forms
- Pattern timeout exceeded

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### ⚙️ KEY SETTINGS

**Elliott Wave**
- ZigZag Length: Pivot detection sensitivity
- Fib Tolerance: Acceptable retracement range
- Min Wave Size: Filter small movements

**Signal Stability**
- Signal Cooldown: Minimum bars between signals
- Lock Pattern Until Invalid: Prevent signal changes
- Confirmation Bars: Wait after Wave 2

**Wave Projection**
- Wave 3/4/5 Fibonacci extensions
- Projection display distance

**EWO Settings**
- Fast/Slow EMA lengths
- Signal smoothing
- Strength threshold

**SMC Settings**
- Order Block lookback period
- FVG minimum size percentage

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### 🔔 ALERTS

- New bullish/bearish pattern detected
- High confluence setup (>75%)
- Pattern invalidation
- Wave completion

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### ⚠️ IMPORTANT NOTES

- This indicator identifies **potential** Elliott Wave patterns based on mathematical rules
- Elliott Wave analysis is subjective - patterns may be interpreted differently
- Always combine with other analysis methods and proper risk management
- Past pattern performance does not guarantee future results
- Pattern locking prevents repainting but delays new pattern detection
- Best used on higher timeframes (1H+) for cleaner wave structures

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### 📚 METHODOLOGY REFERENCES

**Elliott Wave Theory**
- Wave 2 typically retraces 38.2% - 88.6% of Wave 1
- Wave 3 is often the strongest, extending 161.8% of Wave 1
- Wave 4 usually retraces 38.2% of Wave 3
- Wave 5 completes the impulse structure

**Smart Money Concepts**
- Order Blocks represent institutional supply/demand zones
- FVGs indicate price inefficiencies that may act as magnets

**Elliott Wave Oscillator**
- Developed to identify wave momentum
- Crossovers signal potential wave transitions
- Extreme readings often coincide with wave completions

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### 🎨 VISUAL ELEMENTS

- **Green**: Bullish patterns and projections
- **Red**: Bearish patterns and projections
- **Orange**: Wave projection levels
- **Purple**: Order Block zones
- **Yellow**: Fair Value Gaps
- **Blue**: Entry levels
- **Diamond shapes**: New pattern signals
- **Triangle shapes**: EWO crossover signals

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### 💡 TIPS FOR BEST RESULTS

1. Use on liquid markets with clear trend behavior
2. Higher timeframes produce more reliable patterns
3. Look for confluence scores above 65%
4. Verify EWO alignment before entry
5. Consider market context (overall trend, key levels)
6. Adjust ZigZag length based on your trading style
7. Increase cooldown period for longer-term signals

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**Indicator Type**: Overlay
**Markets**: All (Crypto, Forex, Stocks, Commodities)
**Timeframes**: All (1H+ recommended)
**Style**: Pattern Recognition + Momentum + Price Action