Bullish Wave Structure

This indicator visualizes bullish waves and the uptrend structure. It highlights the wave patterns, breakout levels, and swing highs and lows, distinguishing major and minor swings. The script also incorporates labels to denote trend and wave numbers, enhancing clarity in trend and wave identification. The waves plotted on the chart aid in chart study, trend analysis, and decision-making. Drawing objects on the chart are customizable.

## Fundamental Trend Assumptions

• A trend starts when there is a break above a major swing high. There is then a first wave.
  
• Subsequent waves are validated when there is a break above the high of the preceding wave and another major swing high is detected.
  
• The trend ends when the price trades below the swing low of the latest wave.
  

## Wave drawing mechanism
The drawing of a wave occurs when:

• There is a break above a major swing high (or the high of a wave) and another major swing high is detected.
  
• There is a break above a major swing high (or the high of a wave) and the price collapses below the lowest point between the highest high and the high of the previous wave. The script treats this false break high as a legitimate bullish wave, even if no major swing high has been detected. The trend ends because the low of the current wave has been breached. This is a false break high that falls back within the range of the preceding wave.
  
• There is a break above a major swing high (or the high of a wave) and the price collapses below the low of the preceding wave. The script treats this false break high as a legitimate bullish wave, even if no major swing high has been detected. The trend ends because the low of the preceding wave has been breached. This is a false break high followed by a sharp sell-off.
  
• 
  

In short, the script draws the wave if there is a break above a major swing high (or the high of a wave) and another swing high is detected (or there is a break below the low of a wave).

## Remarks

• While lower timeframes could benefit from this indicator, it shows clearer wave and trend structures in higher timeframes, starting from the 1H chart.
  
• This indicator does not provide price projections. The drawing occurs after the price patterns have been unveiled. In other words, it draws waves and performs labeling in hindsight. However, users can fully benefit from the indicator for trend study and various technical analyses to support trading decisions, as explained in the description above.
  
  ## Acknowledgement
  The script uses user-defined functions to look back and find indexes of the highest and lowest values when no swings have been found (i.e., one-bar false break high and collapse). The detection of regular minor and major swings has been accomplished by the built-in functions:
  
  
• ta.pivothigh() [Pine Script Language Reference Manual — TradingView (www.tradingview.com/...script-reference/v5/)
  
• ta.pivotlow() [Pine Script Language Reference Manual — TradingView (www.tradingview.com/...script-reference/v5/)
  
  

Versionshinweise:

Minor Modification
Fixed swing low drawing for one-bar breakout and collapse.