Overview

Elliott Wave analysts understand that there is almost always more than one valid way to count a section of a chart. Given this, an important goal in supporting a trade thesis or driving toward a trade decision is assessing a given count to determine how well it complies with Elliott Wave rules and guidelines, relative to other possible count interpretations.  The Auto Counts gadget makes it extremely easy to do this.

The Auto Counts gadget shows the highest probability wave counts for the most recent automatic wave count calculation for a given chart. It shows a primary count, along with up to 3 alternate wave count interpretations.

Alternate wave counts can provide supporting evidence for a primary count or trade thesis, and can also help establish probability-based risk parameters for a potential trade setup.

 

 

Click on any of the counts listed in the gadget to display them on a chart. This is a convenient way to compare counts side by side, for example, using the multi-chart layout feature as shown below, or to simply view alternate wave counts individually on a single-chart layout.

 

Syncing charts to the alternate wave count timeframe

NOTE: In order to make full use of this feature, you should enable both the alts for subwave counts and waves on all timeframes features.

At the top of the gadget you’ll see an icon next to the symbol and timeframe of the wave counts, as highlighted above. Clicking this icon will enable the feature and synchronize your current chart to the timeframe of the wave counts displayed in the gadget.

When your current chart is synced to the timeframe of the alternate counts, clicking an alternate wave count will display it on the chart at the timeframe at which the wave count was originally calculated. So if your chart is at a different timeframe, it will be switched to the original timeframe of the alternate count when the count is displayed.

For example, let’s assume your chart is at the 60-minute timeframe and the wave counts were calculated at the daily timeframe as in the picture above. When sync is enabled, clicking an alternate count will switch your chart to the daily timeframe to display the wave count.

This can be particularly convenient when reviewing longer-term alternate counts, for example, without making manual timeframe adjustments to your charts to view the next alternate count in the list.

When your current chart is not synced to the timeframe of the alternate counts, clicking an alternate wave count will display it on the chart at the current timeframe of the chart. So, the wave count will adapt to the the timeframe already displayed on your chart.

This can be particularly convenient for quickly reviewing alternate wave counts for subwave counts, for example, after you have switched your chart to a lower timeframe to refine your analysis. You can quickly review and compare each of the subwave counts at lower timeframes as you get closer to making a trading decision.

NOTE: This feature only affects what happens when you first click an alternate wave count to display it on a chart. Once the wave count has been displayed, there is no lasting effect for the chart. So, the chart will behave normally and the timeframe can be freely adjusted just like any other chart.

 

 

IMPORTANT NOTES:

1. Each time you perform an automatic wave count analysis on the currentlt selected chart, the Alternate Wave Counts gadget will display the highest probability wave counts for that chart, which will overwrite any alternate counts that were previously listed for that particular chart. If you simply change the symbol being displayed in that chart, you’ll notice that the previous alternate wave counts continue to be displayed in the gadget so that you can easily redisplay them on the current chart if you wish.

2. Alternate wave counts are not saved with charts. Each wave count listed in the gadget is independent from the others, so if you’d like to preserve a particular alternate wave count, click on it to display it in a chart, then save it, before performing a new automatic wave count analysis on that chart. When you load one of your saved charts, only the single chart that you saved will be displayed. The chart saving feature is completely independent of the Alternate Wave Counts gadget.

3. Alternate wave counts are preserved between sessions. So, if you close WaveBasis then open it later, any alternate wave counts that were previously displayed for the charts in your workspace will conveniently be restored.

4. If you are analyzing more than one market and wish to keep multiple separate lists of alternate wave counts for ongoing reference, simply run your wave counts on separate charts or workspace tabs for each symbol that you are analyzing. Then, each time you select a chart that contains a symbol’s wave count, thereby making it the current chart, the alternate wave counts for that particular wave count will be displayed.

 

Interpreting the listing

Each alternate wave count listed in the gadget includes some key information to help you quickly evaluate the collection of counts individually, and as a whole.

From left to right, the display indicates:

• The wave count label, either “P” for “Primary Count”, or a number indicating which alternate count it is
• The overall context (or bias) of the count, as reflected by the highest degree wave pattern that has not yet completed. The label is colored green for a bullish bias, and red for bearish patterns, and “Bullish” or “Bearish” will be displayed near the center of the listing.
• The largest degree sub-wave that is currently underway according to the given wave count. In the example above, we see that a Bullish wave (3) is currently underway at the highest degree.
• The similarity index of the wave count, expressed as a percentage. This uses our proprietary algorithm for determining how similar one count is to another count, and is an indication for how similar a given count is to the Primary Count. So, the Primary count at the top of the listing will always have a similarity index of 100%.

The similarity index can be used as a way to assess how much “agreement” there is among the highest probability counts. For example, if all or most of the alternate wave counts are very similar to the Primary Count (ie, they have a high Similarity Index), and indicate the same or similar Bullish/Bearish bias, this might be interpreted as evidence that the Primary Count indeed best captures the overall context and bias of a market over the time period that you have analyzed.

When alternate wave counts have low similarity to the Primary Count, this is usually an indication that closer inspection of the alternate wave counts might be in order. A low Similarity Index is not on its own an indication that the alternate count “disagrees” with the primary count, so the displayed Bullish/Bearish bias must also be considered.

It’s often the case that wave counts with low a Similarity index (and potentially differing bias indications) actually imply the same expected forecast, depending on the trading horizon you’re interested in. Differing wave counts that imply the same trade setup can be interpreted as confirming evidence for a trade thesis, so it’s always a good idea to visually inspect and compare the given counts by displaying them on a chart.