EFC Indicator - The Forex Geek

Table of Contents

EFC Indicator, also known as the Elliott Wave Oscillator, the EFC Indicator is based on the principles of the Elliott Wave Theory, which was developed by Ralph Nelson Elliott in the 1930s. According to this theory, market movements are not random, but rather follow a repetitive pattern known as the Elliott Wave.

What is the EFC indicator?

The EFC Indicator is used to identify these waves and forecast future price movements based on the identified trend.
The EFC Indicator is based on the principles of the Elliott Wave Theory, which has been proven to be effective in predicting market movements.
It allows traders to identify trend direction and strength, as well as potential reversal points.
It can be used in conjunction with other technical indicators to confirm trend and provide a more comprehensive analysis of the market.
It can be applied to any time frame, making it suitable for both short-term and long-term traders.
It is a flexible tool that can be customized to suit the individual needs and preferences of the trader.

The EFC Indicator is a technical indicator that uses a combination of moving averages and oscillators to identify potential trend changes. It does this by looking for divergences between the direction of the indicator and the direction of the price trend. For example, if the price of a pair is making higher highs but the EFC Indicator is making lower highs, this could be an indication of a potential trend reversal.

EFC Strategy

Buy Signal

When the EFC Indicator shows that the market is in an uptrend and the wave pattern indicates that the trend is likely to continue.
When the EFC Indicator shows a bullish divergence, indicating that the underlying trend is strengthening.
When the EFC Indicator shows a breakout from a range or consolidation pattern, indicating a potential trend change.
When the EFC Indicator shows a reversal from a downtrend to an uptrend, indicating a potential buying opportunity.
When the EFC Indicator shows a positive crossover, indicating that the underlying trend is bullish.
When the EFC Indicator shows a bullish reversal pattern, such as a double bottom or inverse head and shoulders.

Sell Signal

When the EFC Indicator shows that the market is in a downtrend and the wave pattern indicates that the trend is likely to continue.
When the EFC Indicator shows a bearish divergence, indicating that the underlying trend is weakening.
When the EFC Indicator shows a breakout from a range or consolidation pattern, indicating a potential trend change.
When the EFC Indicator shows a reversal from an uptrend to a downtrend, indicating a potential selling opportunity.
When the EFC Indicator shows a negative crossover, indicating that the underlying trend is bearish.
When the EFC Indicator shows a bearish reversal pattern, such as a double top or head and shoulders.

EFC Indicator Pros and Cons

Pros

It provides a clear and concise visual representation of market trends.
It allows traders to identify potential reversal points and make informed trading decisions.
It can be customized to suit the individual needs and preferences of the trader.
It can be applied to any time frame, making it suitable for both short-term and long-term traders.
It can be used in conjunction with other technical indicators to confirm trend and provide a more comprehensive analysis of the market.

Cons

It requires a certain level of skill and understanding to interpret the wave patterns accurately.
It may not work as effectively in markets with strong fundamental influences.
It may not always provide clear signals, requiring traders to use other technical indicators or analysis methods to confirm trends.

Conclusion

EFC Indicator is used to identify market trends and forecast future price movements based on the identified trend. The indicator is based on a combination of moving averages and oscillators and works by looking for divergences between the direction of the indicator and the direction of the price trend. It can be used to identify trend direction and strength, as well as potential reversal points and can be customized to suit the individual needs and preferences of the trader. The EFC Indicator can be applied to any time frame, making it suitable for both short-term and long-term traders to confirm trend and provide a more comprehensive analysis of the market.

The Forex Geek

Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.