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AlphOmega Elliott Waves 5.5

AlphOmega Aget and AOi Aget Templates

These templates are almost the same as the AlphOmega Simple; the difference is with the style of the Elliott Oscillator (style used by popular Elliott Wave software) and the addition of indicators used in the T1 and T2 setups used by Tom Joseph of Trading Techniques. The indicators are AO Elliott Channels(W3W4), AO Elliott Channels(W5), AO W4TRC, AO DMA and AO Elliott W5 Target. All are in the price pane and will display only if the current wave matches the conditions for the normal (21%) sensitivity (must be a wave 3, 4 or 5). The T1 and T2 setups are explained in the annex at the end of this book. The expert is the same as in the AlphOmega Simple template. The AlphOmega Highlighter is removed as well as the Demand Index, the RSI/RMI indicator. AOi Aget is like the above template but with indicators set for its sensitivity range and the appropriate low volatility expert that is the same as the AOi Simple template. The same comments apply for this template as the ones made for AOi Simple.

To Create a Template with a Different Sensitivity

The template was created for 21% sensitivity only. It is easy to create one for the other sensitivities; to start we need to double click on all the indicators that are sensitivity based, in this case the P&T Duration (gray histogram at the top of our screen), and in the price pane: AO PTF, AO Elliott Channels(W3W4), AO Elliott Channels(W5), AO W4TRC and AO Elliott W5 Target. The Wave Time Projection (21%) (red horizontal lines at the top of the screen) must be deleted and replaced with the desired sensitivity Wave Time Projection. Note: This procedure can be used for all the template styles provided with the set. It is a good idea to name them differently to avoid an update or upgrade that would overwrite it. We must take care when moving to a different sensitivity, that we have changed all the sensitivity based indicators and that the Elliott Oscillator is in tune with our new sensitivity.

Using the Template

Below is a screenshot of the template and the T2 setup, we are in a wave 5 and the setup requires that we enter as soon as the wave 5 target has been reached and the price crosses below the blue displaced moving average (DMA). So far the price has not really moved into the wave 5 target area but it has been beyond the peak of wave 3. It is also below the displaced moving average. These two factors are pointing to a very short wave 5 and a sell short stop should be placed at the $3.50 level. If price continues up, the trade will not take place but if it moves down, the trade will be triggered.

Click to enlarge image

This template is used to get a similar analytical power as in Advanced Get®. The dark cyan parallel lines are the channels for wave 5. The Elliott oscillator has two additional lines (in black) that show the accumulation of bull and bear power. The thick red line at the $5.50 level is the W5 target. When a wave 4 unfolds (instead of the current 5), the indicator (AO TRC) plots the acceptable retracement indicating a strong probability of a wave 5. The profit taking index (PTI) to gauge wave 4 failures is used in explorations and rarely plotted as you only need the value to be above 35. The thick blue line is the AO DMA (Displaced Moving Average).

AlphOmega Vidya Template

Fig 16

This template is using Tushar Chande’s Vidya indicator (an adaptive moving average). The red and the blue horizontal lines indicate the entry (red) and the stop loss level (blue). Adaptive means that it adapts to the volatility of the recent bars. The trade scenario is rather simple as we are given the entry price and a stop loss, we must be careful not to confuse the blue trend line and the red AlphOmega Highlighter with the Vidya indicator. The best way to prevent this is to drag our cursor over the lines and read the name of the indicator and the values. All MetaStock® indicators whether custom or native behave the same way when the cursor is pointing to them.

Wolf Wave Template

Fig 17

Wolf Wave is a triangle formation that lends itself to trading. Like all patterns, it follows some simple rules:

1. The pattern is identified at point 4 that is at the second peak or trough.

2. The trade is triggered from point 5 that is the next trough or peak, the opposite of point 4.

3. Lines are drawn between points 1-3 and 2-4. These lines should converge and touch at the time the target price will be reached.

4. The target price is calculated from the extension of the line between points 1-4.

AlphOmega shows the extensions of those lines so you can see the crossings or near crossings. In addition, the indicator provides the Estimated Time of Arrival (number of bars to crossing) and the price target. The Expert Commentary also warns of the presence of Wolf Wave patterns and the target price. We can run an exploration for the pattern at different sensitivities; we will get the bars since the point 4 was discovered and the trend of the pattern, 1 for bullish and -1 for bearish. The indicators do not go beyond the ETA; otherwise we would have the extensions running very high or low and disturbing our price scale.

This pattern is not very frequent and although the calculation is easy, the results are not reliable. For more information on this pattern, there is a site that has developed a methodology for correctly assessing the various points and the conditions required to trade the pattern. Please refer to WolfeWave® at http://wolfewave.com. They provide the tutorials and some very good samples of patterns in different markets. My approach is from an Elliott Waves perspective although following the same rules; since the pattern is now commonly known by that name, I need to state that I have no knowledge of their specific methodology (only a personal interpretation) and don’t know how successful they are with theirs.

Next: Price and Time Projections

Summary: Index