Compass Pro

Compass Pro (Tradingview INVITE ONLY Script)

Navigate markets with an indicator combining Elliott Waves for structure, liquidity voids for price targets, ATR for volatility, and strength dots for momentum confirmation.

1. Elliott Waves

Elliott Wave Theory suggests market prices move in repetitive cycles, influenced by investor psychology, appearing in two main types of waves:

• Impulse Waves (1-5): Move in the direction of the trend.
• Corrective Waves (ABC): Move against the main trend, correcting part of the impulse wave.

The indicator’s role:

• Detects and labels Elliott Waves automatically.
• Uses pivot points (pivothigh and pivotlow) to identify wave extremes.
• Visually distinguishes impulsive waves (numbers) and corrective waves (letters A, B, C).
• Provides alerts upon wave pattern identification or invalidation.

Fibonacci retracement levels are derived from Fibonacci ratios (0.382, 0.500, 0.618, 0.764, 0.854) and indicate potential support and resistance areas after a price impulse.

• Traders anticipate price reactions at these levels, often setting entry, exit, or stop-loss orders accordingly.

The indicator’s role:

• Automatically calculates and plots Fibonacci retracement levels using defined ratios (0.500, 0.618, 0.764, 0.854).
• The levels appear after a clear Elliott Wave impulse completes, highlighting critical price zones for retracement.
• The script visually signals when these Fibonacci retracements are breached, turning solid lines into dotted lines to indicate broken levels.

2. Adjustable threshold based on liquidity analysis (ATR).
Liquidity zones or voids are areas on the chart characterized by sharp price moves leaving gaps or inefficiently traded areas. Price often revisits these zones, providing opportunities for traders anticipating fills or reversals.

• Liquidity voids: Sharp moves leaving minimal trade volume or candle overlap.
• Traders expect prices to return to these zones to "rebalance" the market.

The indicator’s role:

• Automatically detects and marks liquidity voids based on price gaps and volatility (ATR thresholds).
• Visually highlights liquidity voids (bullish or bearish) using colored boxes.
• Dynamically adjusts these zones when they are revisited and "filled," changing colors to signify zone resolution.

The synergy among these three concepts offers a robust trading approach. Here’s how they practically interconnect:

• Step 1 (Wave Identification):
  The script first identifies an Elliott wave impulse (1-5) followed by corrective ABC waves.
• Step 2 (Fibonacci Application):
  Immediately upon the impulse’s completion, Fibonacci retracement levels automatically appear, suggesting potential entry or exit points, aligning with Elliott Wave structure.
• Step 3 (Liquidity Zones):
  During impulsive moves, liquidity voids form. Traders watch these liquidity zones aligning near Fibonacci retracements for powerful confluent signals:
  • Example: A corrective Elliott wave (Wave 2 or 4) aligns precisely at a liquidity void which coincides with a Fibonacci retracement level (like 0.618). This significantly strengthens the support or resistance expectation.
• Step 4 (Trading Decisions):
  When liquidity voids overlap with significant Fibonacci retracements and Elliott Wave correction points, traders have compelling entry or exit signals.

3. ATR (Average True Range) + Strength and Weakness Dots

The main characteristic is the green-and-red-alternating line that travels in steps above and below the price candles, essentially forming a dynamic channel or boundary for the price.

Identification of trend:

The indicator utilizes the Average True Range (ATR) to ascertain its distance from the price, as ATR quantifies market volatility. Color Change/Trend Reversal: When a trend reversal occurs, the line changes its color and moves in relation to the price. Green dots signal a strong trend, while red dots indicate a weakening trend.