WaveBasis will scan and label only the period of a chart you specify. So, before running an automatic wave count, you’ll need to decide upon a time range and a chart resolution that are relevant to your objectives. It’s crucial to be deliberate about these choices in order to get the best results with automatic wave counts.
NOTE: The ability to customize the date range has several benefits, including allowing you to conduct quite detailed and targeted Elliott Wave analysis very quickly as described in the upcoming sections.
Important things to keep in mind…
When setting the time range
- AutoCount wave scans on a fixed number of bars, such as 250 or 500 bars, will alway include up to the last bar visible on the chart.
- A fixed number of bars is a reasonable place to start to begin to get familiar with the WaveBasis platform, and will be fine for a few scenarios. However, for more serious and reliable analysis, we strongly recommend that you are specific and deliberate about exactly where your wave counts begin. Please read this important blog post to find out why.
- For example, a setting of 250 to 750 bars is reasonable for frequent scans of a list of markets you may be monitoring. However, for more probing and comprehensive analysis of a particular market, for best results, you should be more deliberate about the Date Range setting when running AutoCounts.
- A simple but important rule of thumb is that the date range for an AutoCount should begin with a significant market turning point. One way to make sure that a clear market turning point is included in the analysis is to select the Visible chart range or Up to the present setting in the Date Range menu, then set the zoom and scroll on your chart so that it shows only the area that you are most interested in. Also see the Automatic Pivot Detection section.
When setting the chart resolution
- In general, AutoCounts on a smaller number of bars will run faster. So, choose a chart resolution that is appropriate for the time range you are interested in. For example, a daily chart is generally more appropriate for a count on an 18 month span of time than would be a 60 minute chart.
- Choose a resolution that is appropriate to the question you are asking of the market, in the context of your trading style and horizon. For example, are you asking “at what price level in the very short term should I expect a low-risk entry to occur?”, or are you asking “what is the larger time frame Elliott Wave pattern context for the market?”