Elliott Wave Impulse Strategy | Wave 5 & Reversal Entries by blitz_locked
By blitz_locked
Performance Metrics
- Author: blitz_locked
- Symbol: NASDAQ:AMZN
- Timeframe: 1 day
Description
Credit and thanksThis strategy is built on “Elliott Wave [LuxAlgo]” by LuxAlgo, released under CC BY-NC-SA 4.0. Thank you to LuxAlgo for the original zigzag and wave-detection work. This script is for non-commercial use and is shared under the same license.How I adapted the indicatorThe original is a visual tool that labels waves. I kept its core pieces and added a trading layer on top:Zigzag pivots, using the same alternating pivot logic.The same 5-wave impulse test: wave 3 cannot be the shortest, and waves 2 and 4 must respect the usual limits.The (0)–(5) wave labels and the 0.500 / 0.618 / 0.764 / 0.854 Fibonacci retracement lines, with the shaded zone between the last two.I removed the multi-degree zigzags and the ABC correction tracking to keep it simple, and added entries, stops, targets, position sizing and a stats dashboard.How the strategy worksIt has two setups, selected with Entry Mode:Reversal. After a full 5-wave impulse completes and a confirmed pivot turns the other way, it trades against the move. The stop goes just beyond the wave 5 extreme and the target is a Fibonacci retracement of the whole impulse (0.5 by default).Wave 5. After waves 0–4 form and wave 4 retraces 23.6%–61.8% of wave 3 without breaking wave 1, it trades with the trend. The stop goes just beyond the wave 4 extreme and the target is the length of wave 1 projected from there.Every trade also has to pass these checks:The impulse (or wave 3 for the Wave 5 setup) must be at least 1.5 × ATR.Reward-to-risk must be at least 1.0.Only one position at a time, with no reversals.Any open trade closes after 100 bars if neither stop nor target was hit.FeaturesTwo setups in one script, selectable or combined.Automatic wave labels and Fibonacci lines on the chart.Stop and target lines drawn at entry, with price labels.Position size set from risk (1% of equity by default), capped at 100% of equity so there is no leverage by default.Direction filter (long only, short only, both).Dashboard with position, last setup, net profit, trades, win rate, profit factor and max drawdown.Commission and slippage built in as realistic defaults.TipsTest on 1 hour to 4 hour charts first and use a long history, because the setups are selective.ZigZag Length controls everything: smaller values find more, smaller waves; larger values find fewer, bigger ones.Run Entry Mode “Reversal” and “Wave 5” separately and compare profit factor to see which setup suits your market.Position size comes from the risk input, not the default order size in Properties.Judge results by profit factor and drawdown after costs, not by win rate alone.WarningsElliott Wave counting is subjective. This script applies one fixed set of rules and does not claim they are the “correct” count.Pivots confirm very quickly, so some detected waves will be false patterns, especially on low timeframes.The Reversal setup trades against the trend. When wave 5 extends or the trend simply continues, it will lose.The Wave 5 setup can fail if the count is wrong.Backtests are not predictions. Past performance does not guarantee future results, and results depend heavily on the market, timeframe and settings.Orders fill on the next bar, so real fills will differ from the signal bar’s close.This is not financial advice. Test on historical and paper data before using real money.