Wave Action Indicators

Market prices fluctuate. By mathematical definition, that means that they can be analysed as waves, an infinite sum of sines and cosines. While such analysis can be used to detemine the markets' dominant wave's period at any time, traders are usually more interested in trying to determine where the current wave cycle projects the destination of price. Most famous among such indicators is the rather arcane and extremely, in our opinion, subjective, Elliot Wave. It would appear that if one put less than 100 or so Elliot Wave experts in a room, there is unlikely to be even 2 Elliot Wave counts that are identical!

Far be it from us to be criticising what evidently brings some experts a nice chunk of change. However, our Osi Objective Wave Indicator will always provide the exact same count, no matter who does the counting, because it uses fixed objective criteria, based on Fibonacci counts of the relative action of closes, to determine all waves. There is no subjectivity involved in whether a wave has ended or not: we have rigid objective criteria that indicate when a wave has ended, and another started.

Another interesting indicator that clearly shows market waves, but more in the fashion of a visual context is the Osi Market Trajectory Indicator. This one uses the period of the dominant market cycle, (remember we said that it could be calculated and used?), to determine a smoothed average of price, that hugs the market much better than any other indicator we have seen, and so clearly shows the wave structure that is reminiscent of what Elliot Wave postulates. We list is here, but for us, it is really one we just use to hint at the market's wave structure.

The Osi Objective Wave Indicator is still in beta testing, but will soon be coming to a place near you !