Elliott Wave: Theory and Discussion by MARKETWAVES

[RichKid]

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

 

[CFD]

How long have you been a Moderator?

 

[Joe Blow]

How long have you been a Moderator?

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

 

[DTM]

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.

 

[MARKETWAVES]

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
- So 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 .........

 

[MARKETWAVES]

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 ...........
----------------------------------------------------------------

Concern yourself with Risk to Reward and what's called Position Sizing
and also learning sound Money Management skills ..............


--------------------------------------------------------------------
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 Money Management-
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............

 

[BBand]

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

 

[MARKETWAVES]

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

- 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 ...........
---------------------------------------------------------------------
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......

 

[wavepicker]

- 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 ...........
---------------------------------------------------------------------
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......

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

[/U]

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

 

[MARKETWAVES]

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

 

[BBand]

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

 

[MARKETWAVES]

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

WD Gann was the ultimate trader , the markets have ever seen
-----------------------------------------------------------------------
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?

 

[MARKETWAVES]

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

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 !.....

 

[wavepicker]

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

WD Gann was the ultimate trader , the markets have ever seen
-----------------------------------------------------------------------
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?

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.

 

[MARKETWAVES]

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

 

[wavepicker]

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

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

 

[MARKETWAVES]

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

 

[RichKid]

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.

 

[It's Snake Pliskin]

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?

 

[wavepicker]

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?

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