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Next Subwaves

The Next Subwaves gadget is one of our most powerful and popular gadgets. It’s a concise synopsis of the context and directional bias of the current wave count, with detailed trade setup parameters, including projected price targets.

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The gadget displays wave count projections, considering all of the incomplete waves in the count, at all timeframes (wave degrees). It gets “right to the point” when it comes to interpreting what a count is saying about what the market is statistically most likely going to do next.

This is the best way to focus in on potential low-risk trading opportunities, as each row in the table calls your attention to a potential trade setup.

The Next Subwaves list can not only help you assess whether the “pressure” on a market is currently up or down, it can also provide detailed clues regarding the path it might ultimately take moving forward.

How do I use it?

 

See Gadgets for information about opening and working with gadgets.

  • Each wave pattern on the chart that has a question mark next to one of its waves will have a corresponding row in the table.
  • The rows are in top-to-bottom order from higher to lower wave degrees (timeframes).
  • Hovering over (or touching) a row will highlight the related wave right on the chart, as well as display a green box to indicate where the minimum target area resides for that wave. This is a visual indication of where expected support (or resistance) for the given wave resides.
  • Hovering over the wave on the chart will highlight the corresponding row in the table.

 

NOTE: The Support/Resistance Smart Tool must be enabled in order to see the “green box” support and resistance price targets, see: Wave Count Enhancements

 

NOTE: The Next Subwaves gadget also includes a second tab which gives you an explanation of what a wave count is saying: the Wave Count Forecast gadget

 

IMPORTANT: The Next Subwaves  gadget is completely synchronized with your current chart. This means that it works with wave counts that you draw manually as well as displaying the effect of modifications that you make to automatic wave counts.

 

How do I read it?

 

As you can see in the image above, the symbol and time frame for the wave count is shown at the top of the gadget window, along with any relevant Bias setting or Subwave count details. The columns of the table convey the following key information:

 

Wave 

The first item in each row in the list of subwave projections shows the Elliott wave label of the next wave, along with the directional bias, green for bullish and red for bearish. This is an indication of the direction price is expected to go in order to complete the wave pattern.

Additionally, the graphic shows the type of wave pattern (“Impulse”, “Diagonal”, etc) that is most likely currently underway. The text will be colored white for automatic waves and yellow for manual waves or automatic waves that you have modified.

 

R/R 

This is the ranking for the expected profit potential (Reward/Risk) suggested by a particular wave setup. It will show a number of colored stars from zero to a maximum of 3. While 3 stars draws attention to the trade opportunities with the lowest risk and highest potential reward, all setups deserve some consideration, depending on your objectives and trading horizon.

 

Target

This is the projected most likely minimum price level for the end of the next wave, based on extension or retracement expectations, according to standard Elliott Wave mathematics. The Target will be colored orange when price is close to reaching the target, and green if the minimum target has already been reached. The percentage price change to reach the target is also displayed in parentheses.

 

Risk

This is lets you know the price level at which the trade setup will become invalid, including the equivalent risk percentage in parentheses. This information can be quite useful as a guideline for setting stop loss levels.

 

Status

This is an indication of whether the market has already moved far enough in the direction of the next wave to consider the setup confirmed. An orange checkmark means the setup is close to being confirmed, while a green checkmark indicates that the setup has been confirmed. A red circle with a line through it indicates that the wave projection is invalid, which usually means that the count should be recalculated to include the most recent market action.

 

The indications in the Next Subwaves gadget allow you to rapidly interpret a wave count and gain a sense of what a market is most likely to do next based on that count. This is a very fast way to identify potential trading opportunities.

NOTE: The target levels are not meant to serve as absolute predictions of where price will go. They simply offer a guideline, based on our research, and are common minimum expectations among Elliott Wave analysts.

Hint: Since price targets are minimum expectations, you may often see that a market has exceeded its Target for a particular wave. This, in and of itself, can be very useful information, for example when evaluating the strength of a trend.

Hint: It is also informative to see, for example, more than one trade setup share the same or very similar price targets. In the Elliott Wave world, this is generally interpreted as an important confluence, and something to pay close attention to.

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