# Elliott Wave: Theory and Discussion by MARKETWAVES



## RichKid (6 October 2007)

This thread is for Marketwaves to discuss and post on his approach to EW- questions are welcome. 

However, I encourage Tech/a to post questions about EW in existing EW threads to avoid further confrontations (all posts must be in line with ASF policy). This restriction is not standard policy but it will be the practice in this instance unless Joe decides otherwise.

RichKid
Moderator


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## CFD (7 October 2007)

How long have you been a Moderator?


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## Joe Blow (7 October 2007)

CFD said:


> How long have you been a Moderator?




RichKid has been a moderator for over 2 and a half years.


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## DTM (8 October 2007)

https://www.aussiestockforums.com/forums/showpost.php?p=209821&postcount=43

*Oh, I didn't see this thread.  * 


*I hope Market sees this too and comes back. *


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## MARKETWAVES (8 October 2007)

About my posts......
I simply call them Potential Trade Set-ups.....They are not 100% reliable
and believe me when I tell you -I am no Holy Grail and have had my
share of misfortune just like anyone else posting here in this forum , so
there-for I am no Guru !......

*Anyone looking at any post in this Forum including the ones that I make are
to apply your own Trading Style and use sound Money Management Principles.*

The Bottom line is ,
*No-One is to follow anyone Blindly !* - If even follow them at all !
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and besides ,
- Forums are just a place to exchange thoughts and Ideas
and maybe you can learn something along the way .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/////////////////////////////////////////////////////////////////////////
*Marketwavez IS A VISUAL TRADER......*
- AN  EXTREMELY VISUAL TRADER !
/////////////////////////////////////////////////////////////////////////
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Here is a very important fact ,

There is no such thing as a chart expert.........
We all get it wrong sometimes ...........
*////////////////////////////////////////////////////////////////////////
-Chart Patterns and Wave-counts in a given market is going to vary
based on who you are as a trader and will be a true reflection of
your trading style and trading experiences .

This Trading Style is not for everyone .......Why ?
-because we are not all the same ....... We are all built differently.
We all have different experiences and more importantly we all don't
see the charts or see the world the same way .*

What you see here in my charts provided are a representation
of Elliott Waves and Fibonacci Retracements of what a given
market may be tracing out and are highly subjective ............

These Charts only give a Visual Premise
- *S*o you see what is being talked about visually .
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They will be wrong at times ! ........
*- Just like your own analysis will be wrong at times*
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Therefore , I am no different than you the reader ......

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*I leave you with my trading motto for now :

Professionals are concerned with Risk to Reward and their Averages*
*-Everybody else is only concerned with being Right all the time !*

Which one are you ? ..........
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Good luck ,
and may the Charts take a like-ing to your observations .........


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## MARKETWAVES (8 October 2007)

Trading Plan......... ( See Attachment Below )

* Usd/Chf ---*

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This trade has a Risk of about 55 pips

*Can You stand to loose 55 pips?* and be able to live another day to trade again ? ....
-This is what the experienced trader is concerned with !

All the so called " Professionals " in here and out there are only concerned
about being right on the call ..............................................
Only *fools* are concerned with being right all the time !

Did you know ?
There are people doing well at trading by being right only *50%* of the time .......

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If you want to be successful at this thing called trading.......
Then take these words very seriously ........... 
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*Concern yourself with Risk to Reward and what's called Position Sizing 
and also learning sound Money Management skills ..............*


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*Because in the end its all comes down to only this !*

*Trading is all your ability to analyze Risk and Protect your Assets !*

*This is more important to understand than any trading-system
 or trading-method that you can think of to apply to the various markets ........*
////////////////////////////////////////////////////////////////////////////////////////////////

Remember the Lessons of *M*oney *M*anagement-
In which will ultimately keep you out of trouble especially
when you are wrong about a particular market turn !

Don't over - extend yourself...........
Don't over - leverage yourself............


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## BBand (8 October 2007)

Hi Marketwaves,
I would like to read your views on EW, so please do not leave.

I do not profess to know much (anything?) about EW, but I would like to learn.

As an outsider looking in, it appears that we sometimes experience difficulties in identifying the wave counts.

If a wave represents a price move, couldn't our common technical indicators help to identify the start and end of each move?
e.g. Bollinger Bands are pretty good at showing the start of a move (using Std Dev. could be used to amplify the Band movement)
ADX can be used to identify the start and end of a move 
etc. etc etc, use SAR for confirmation

It tends to look obvious in hindsight, but its a different ball game at the extreme RH edgs of the chart, whats new

Just my observation.
Peter


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## MARKETWAVES (8 October 2007)

BBand said:


> Hi Marketwaves,
> I would like to read your views on EW, so please do not leave.
> 
> I do not profess to know much (anything?) about EW, but I would like to learn.
> ...



*
  - There  is  no  mention of  Nelson  Elliott  ever  using any Oscillators
 -There  is  no  mention of W.D Gann ever  using any Oscillators ....
and  
There  is  no mention of  Elliott- Waves  being used  on  Individual  Stocks*
 So why should you use them ? 

 ( Forget  about  trying to apply Elliott Waves  to  individual stocks ) 
 You  are  wasting your  time ...........
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As  I was  mentioning  to  Wavepicker ..

 Elliott Waves  were primarily designed  to  be  used  on
 Commodities , and  the Indexes , and  Currencies  ........
 They work especially  well on US T-Bonds 

------------------------------------------------------
 Different  markets  have  different  personalities ,
So  it  takes  time  to  understand the  waves 
------------------------------------------------
You  can't  learn  Elliott Waves Formations  in 1  week , ................
You  cant learn Elliott Waves  reading  the books you see on the internet and in bookstores  .....
Why ..... 
The  problem  is  that Nelson  Elliott  , the man who created Elliott Waves
did not write  these  books so  you  will  be  mis-informed ..... 

*-You will need  a  solid  6  months  or  more to learn , and possibly a mentor .... *
-----------------------------------------------------------------------
Understanding Elliott Waves properly is about  where  you  get your  education .

 The  best Elliottitians  I've  seen  use  pencil paper  and  a ruler - " NO  Computers "  
 The  bes t  Elliottians  are  using  hand  drawn  charts , even  today !

It  is  a  skill  that has to  be  acquired  through time and  experience......


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## wavepicker (8 October 2007)

MARKETWAVES said:


> *
> - There  is  no  mention of  Nelson  Elliott  ever  using any Oscillators
> -There  is  no  mention of W.D Gann ever  using any Oscillators ....
> and
> ...





MARKETWAVES said:


> *
> As  I was  mentioning  to  Wavepicker ..
> 
> Elliott Waves  were primarily designed  to  be  used  on
> ...



*


You are quite right MW, Elliott is best used is markets that are very liquid, that is the best representation of mass mood after all. BUT that does not mean there are at times good EW opportunities available on liquid individual stocks. There are!! Myself, Nick Radge and a whole host of others on this forum have presented excellent trades using Elliott on individual stocks.

Other times it’s very hard to make head or tails of EW patterns on individual stocks, that is why it’s important NOT to rely on EW in isolation as the basis of your methodology.

EW has flaws just like other TA disciplines. In my experience one of the biggest problems has been on the area of timing, and what is the most likely pattern  to follow a pattern that has completed?? 

I have branched out into other disciples looking at TIME in particular(in collaboration and also with  expertise of  Magdoran) and  also looked at Cycles Analysis. These disciplines at times are uncanny at ironing out ambiguities related to EW.

YOU FORGET ONE THING MARKET WAVES.

R N Elliott was NOT a trader. He came up with this theory and came up with some sound forecasts for a while. Know where does he give any practical examples of how to trade with EW. Where to place stops, how to manage your positions etc.

I know you don’t have much respect for Prechter, but he WAS a trader (as well as a Theorist). Although these days he focuses more on institutional investors. Using EW to win the US trading championship in 1984 and smashing the record doing so. It was because of this effort that EW was popularized in the last 20 odd years, RN Elliott work was revived by him and a few others . Since then other EW traders like Robert Miner have integrated their own trading methodologies within the EW framework.

Cheers*


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## MARKETWAVES (8 October 2007)

This  is  a  trade  set  up  continuing  into  tomorrow

 (  Just  waiting to  reach  these targets  )

  As  you  can  see there are " No Oscillators Involved "
  Only  Fibonacci Lines and  Elliott Waves
-------------------------------------------------------------


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## BBand (8 October 2007)

Hi Marketwaves,
Thank you for the reply.

I trade stocks only - and do well enough to keep me very happy.

So maybe your "brand" of EW is not for me.
Thank you for spelling it out, I'll just continue blissfully along my proven path.

 As you said "its not about being right, its about MM" - TOTALLY AGREE


Regards
Peter


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## MARKETWAVES (8 October 2007)

Wavepicker , 
thanx  for pointing out the things  you  just  mentioned above 

 This  is  exactly  the  problem with  these  Elliott Waves  software 
*  They  don't  give you entries and stops   and  they  definately 
   they don't  teach  you to manage  individual trades*
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*  WD Gann*  was  the  ultimate  trader , the  markets have  ever seen 
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    and as for Mr. Pretcher  he  sells  a signal  service  for  199/month  (US)

Please  don't  get  me  started  on  the  results of  it .... 
because  there  is  no  track- record of  trades,  
sand  there  are  no , entries , stops  and  targets, ...............  
 They  just  give  wave  counts  that keep  changing and  changing with no price  entries 

Too  many  people  complain  to  me  about  Pretcher's  signal service .

---------------------------------------------------------------------
 How about asking  some  traders  in  here 
what  they think  of  Pretcher's  $199/month (US) 
Signal Service  with no  published  results?


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## MARKETWAVES (8 October 2007)

BBand said:


> Hi Marketwaves,
> Thank you for the reply.
> 
> I trade stocks only - and do well enough to keep me very happy.
> ...




Hi  BBand  
I  have only read   2 of  your  posts  - 
and  I read  the  you  are  scaling out of your positions
as price  moves  in the  anticipated  direction.
This  tells  me  you  have  money management skills ... 
which is  the  real key  to  success  in  the  markets .............  
Keep  up the  good  posts !.....


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## wavepicker (8 October 2007)

MARKETWAVES said:


> Wavepicker ,
> thanx  for pointing out the things  you  just  mentioned above
> 
> This  is  exactly  the  problem with  these  Elliott Waves  software
> ...




Agreed it's expensive and I have never or will ever used it. However I don't think Prechter generates the signals, he has staff doing that. In fact I don't think Prechter does that much these days except write a monthly newsletter, but it was his trading record back in the mid 80's that popularized EW and put his own business on the map.

My point was that he probably one of the first EW practioners to use the method as traders. Most of the earlier paractioners used it in forecasting.

Once again I say, RN Elliott was NOT a trader, WD Gann WAS a trader, but even he too gave a threadbare description of how to trade the markets in a practical manner. All he left us were bit/pieces of methods/ideas that he came up with throughout his career.


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## MARKETWAVES (8 October 2007)

Wave picker .
Did  you see  the  US Dollar  chart-setup  from  earlier  today ?

 Click Here ...........  Scroll down ,  See post #96 & 97
https://www.aussiestockforums.com/forums/showthread.php?t=7802&page=5
 --------------------------------------------------------------------------


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## wavepicker (8 October 2007)

MARKETWAVES said:


> Wave picker .
> Did  you see  the  US Dollar  chart-setup  from  earlier  today ?
> 
> Click Here ...........  Scroll down ,  See post #96 & 97
> ...




Saw it and totally agree with the analysis.

I think the AUDUSD is a short this evening, and will trade it that way. Did you see the chart I put up? It is similar to yours but only differs in terms of degree of trend. That is what one should hope to see, a primary wave count and an alternate implying the the same thing. That is how one can use EW to stack the probabilities in their favour.

Cheers


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## MARKETWAVES (9 October 2007)

The *Usd/Yen *blasted out of an" End of Wave 4 " from Fridays NFP Report
(See chart below )........

2nd Target has now been reached -
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Here are the results from the trade set-up


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## RichKid (11 October 2007)

Great thread MW, glad you're back in action. 

I have a question:
Your initial stop for the USD/CHF was at the 1975 level (post #6 of this thread). Do you move your stop higher (trailing stop) as the market moves in your anticipated direction or do you just leave it at just below the wave 2 low? Since you mention the importance of risk/reward management and trade mgmt I thought I'd ask. Those visual representations of your trades are very educational.


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## It's Snake Pliskin (11 October 2007)

I am totally baffled as to why a count will incorporate the smallest wave then ignore a wave 3 times bigger to fix a count. Running an alterntive count gives the same result, or one can run multiple counts for slightly different or radically different results. 

It still baffles me.

This is in response to MW last post USD/YEN trade, waves 1 and 2

MW is there a possible alternative count?


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## wavepicker (11 October 2007)

It's Snake Pliskin said:


> I am totally baffled as to why a count will incorporate the smallest wave then ignore a wave 3 times bigger to fix a count. Running an alterntive count gives the same result, or one can run multiple counts for slightly different or radically different results.
> 
> It still baffles me.
> 
> ...




Understand what you are saying Snake, and I certainly would not have done it that way either. However if his style works for him, I suppose that is all that matters. 

As far as I am concerned I try and account swings(large or small) in the whole equation as they all have meaning and are for a reason. I generally find if this is done I am more confident the end result will lead to the most objective conclusion that I can come up with using EW, but not a guarrantee that it is the correct one ofcourse

Cheers


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## It's Snake Pliskin (11 October 2007)

wavepicker said:


> Understand what you are saying Snake, and I certainly would not have done it that way either. However if his style works for him, I suppose that is all that matters.
> 
> As far as I am concerned I try and account swings(large or small) in the whole equation as they all have meaning and are for a reason. I generally find if this is done I am more confident the end result will lead to the most objective conclusion that I can come up with using EW, but not a guarrantee that it is the correct one ofcourse
> 
> Cheers




Thanks for the insight Wave.

Objective is the important word, and my opinion above may have been subjective which is what I need to consider in applying counts. 

Thanks.
Snake


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## MARKETWAVES (12 October 2007)

Hi there Snake 

 I Have put  the* Usd/Yen* charts over  here  in  this  thread 

 Scroll down and  See  post *# 17*
https://www.aussiestockforums.com/forums/showthread.php?t=8392

 Here  is   a  copy of  the  chart in that post .......
https://www.aussiestockforums.com/forums/attachment.php?attachmentid=13761&stc=1&d=1191424881

----------------------------------------------------------------------------------------------------------------


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## It's Snake Pliskin (12 October 2007)

MARKETWAVES said:


> Hi there Snake
> 
> I Have put  the* Usd/Yen* charts over  here  in  this  thread
> 
> ...





No worries MW.
Thanks


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## MARKETWAVES (12 October 2007)

MARKETWAVES said:


> Hi  Wavepicker ,
> 
> This  is  a  Short-term view  of  the * US Dollar*  that  I  just  worked  out
> --------------------------------------------------------------------
> ...




This  is a Probable View of the Us Dollar 's Posture
 from earlier this week.............


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## MARKETWAVES (12 October 2007)

MARKETWAVES said:


> *Usd/Chf*
> Heres  a  closer  look .........
> ///////////////////////////////////




  Here is  a  closer  look at  the Us Dollar -


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## MARKETWAVES (12 October 2007)

Looks like we go that strong break-out after all
( Price is now moving towards intended targets )......

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -


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## MARKETWAVES (12 October 2007)

Here is the  US Dollar Chart Update :
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## MARKETWAVES (12 October 2007)

*US Dollar *- Swissy
Could also be doing this ...........
- - - - - - - - - - - - - - - - - - - - - - - - - - - -


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