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Elliott Waves - Resources for Beginners

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Dan_

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Hey All,

I'm trying to lean about Elliot Waves after reading the basics and stumbled across the attached below.

Would appreciate any feedback on the attached as hopefully it's a good free resource to learn more about EW.

http://www.elitetrader.com/vb/attachment.php?s=&postid=803273

I have read Nick's book which fueled my interest as well as some of the EW charts seen on this site (Marketwaves for one, who now seems banned?) and would appreciate if any experienced EW people could recommended a book or resource which really helped to educate them.

Thanks

Edit - Just to clarify I'm not interested in the software that is mentioned in the PDF, more so interested in using the examples and explanations presented to help learn the "applying" of the EW theory to stocks
 
Re: Elliot Waves- Resources for Beginners

Dan_ said:
Hey All,

I'm trying to lean about Elliot Waves after reading the basics and stumbled across the attached below.

Would appreciate any feedback on the attached as hopefully it's a good free resource to learn more about EW.

http://www.elitetrader.com/vb/attachment.php?s=&postid=803273

I have read Nick's book which fueled my interest as well as some of the EW charts seen on this site (Marketwaves for one, who now seems banned?) and would appreciate if any experienced EW people could recommended a book or resource which really helped to educate them.

Thanks

Edit - Just to clarify I'm not interested in the software that is mentioned in the PDF, more so interested in using the examples and explanations presented to help learn the "applying" of the EW theory to stocks
Click to expand...

Hey Dan,

There's a little bit here: https://www.aussiestockforums.com/forums/showthread.php?t=1032&highlight=elliott+wave

EW International has free membership and is great, basically a full course to download: www.elliottwave.com. There's also the book by Frost & Prechter' 'Elliott Wave Principle'. And just study experts like Radge and how they apply it, each seems to have their own style. There's Marketwaves and Wavepicker who post great work here as well.

Don't go by my EW charts as I'm a beginner. I find that the simpler it is the better, so I avoid the esoteric stuff and try to look for obvious EW patterns rather than trying to force the chart to fit EW theory.
 
Re: Elliot Waves- Resources for Beginners

www.elliottwave.net and then go to the educational resources is free.

The best book in my opinion is Robert Miner's Dynamic Trading. His software is very average, but the book is very very good.

If I was to be so bold, then my Chartist is real time analysis using EW and volume on ASX stocks. www.thechartist.com.au

I was sent this via Van Tharp's emails:

A Review of Market Models: Elliott Wave Theory

by D. R. Barton, Jr.

Last week we talked about the importance of having a “price discipline”. That’s just a fancy way of saying that you have a market model that you trust and believe in.

What market model describes the price action in a way that you understand and accept?

Some people become crazed and rabid fans of one type of market model. Anyone who doesn’t agree with their price discipline is labeled a heretic. I tend to find that the more subjective the model, the more fanatic the followers. But that may just be my personal biases coming out…

For the next few weeks, I’d like to take a look at some of the most prevalent price disciplines or market models and classify them according to my experience with them directly and with those that use them well (or not so well).

Let’s start today with one of the most controversial models and get that out of the way. Let the gnashing of teeth begin!

Elliott Wave Theory: Prophetic or Pathetic?

Who would have guessed that the work of Ralph Nelson Elliott would be causing such a non-stop stir 80+ years after it was developed? But before tackling the controversy, let’s have a quick review.

Elliott Wave Theory (EWT) belongs to a class of market models called cycle analysis. We’ll take a look at this broader category in another article. But Elliott theory is differentiated from its cycle brethren by the fact that it doesn’t require absolute time frames between its cycles (or waves). This is both a strength (since this makes it almost a purely price-based model) and a weakness (because it adds a good deal of subjectivity to the interpretations of the waves).

In simple terms, EWT holds that market prices move up in a five wave pattern and then down in a three wave pattern. This is a grossly over-simplified but captures the essence of the beast. If you’d like to learn more, just Google “Elliott Wave” and find literally hundreds of thousands of sites interested in helping you out.

So let’s put together a simple rubric to use in evaluating our market models:

Is it theoretically credible?

Who is it most useful for?

Is it being used by real-life traders?

For fun; How fanatic are its fans?

Is it theoretically credible? The basis of markets moving in cycles is pretty clear and repeatable. Elliott was clearly influenced by Dow’s work and the basis for the theory is sufficiently rigorous for trading purposes.

Who is it most useful for? The tongue-in-cheek answer: those with a thick skin, a flexible outlook and a high level of creativity. The more serious answer is that most serious traders should have a basic understanding of Elliott principles because it does give a useful interpretation of the market’s general “three steps up, two steps back” movement pattern.

Those who do choose to learn Elliott theory will quickly encounter the Achilles heel of this method: it is an extremely subjective method. (10,000 Elliott followers just put me on their “hit list” – but please hear me out!) Because waves have no absolute time constraints, they can be broadly interpreted in real time. (Everyone gets it right looking back on moves that have already happened).

BUT…

Those who gain experience with this method can become very proficient at making high quality decisions. See the “real-life traders” section below.

If you like the concept of Elliott theory, but want to minimize the subjective issues, you might try out a few of the software products that are out there. They don’t all agree on the wave counts, but you can find one that aligns with your interpretations and then stick to it.

Is it being used by real-life traders? With the seemingly negative outlook presented, be prepared for a shocker. The answer is a resounding YES. I have several good friends who are excellent Elliott analysts and I have read the work of several other very good Elliott analysts. A general statement that can be made is: "When experienced traders and market observers combine that experience with a useful price discipline, they are generally successful."

As with all of the market models we’ll review, the usefulness of the model may have something to do with how many people are using that model and reacting to the price levels that it produces. But whether the model is a self-fulfilling prophecy or a real reflection of the underlying structure of the markets, if it works consistently, then it is useful.
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Re: Elliot Waves- Resources for Beginners

Hi Dan,

For me, still the best book out there is "Elliott Wave Principle Key To Market Behavior" by Frost and Prechter" As Nick said you may be able to download this from the Elliott Wave International site. Another good book I have come across is " Applying Elliott Wave Theory Profitably" by Steven W.Poser.

I can only talk through my own experience here, but the quickest way as I have mentioned to Richkid to learn to to apply Elliott waves is to practice. Lots of it. For a start practice labelling, applying elliott rules and guidelines on old charts. Not to make a forecast, but rather to at least lay a foundation for labelling charts. Label as many charts as you can. Get a feel in your mind for the types of patterns that you should be expecting or not expecting. This may take a long time, nothing comes easy.

When you are ready to start applying your knowledge for a possible forecast or future scenarios I recommend you do so in fast liquid markets. There is nothing wrong with the stock market, but for the purpose of learning, everything happens too slow. I recommend the futures and Forex markets where you have 5's and 3's occuring in micro waves o a daily basis.

One thing here. Try and stay away from the complex stuff for starters.(in fact all the time) Just try to look for simple textbook impulses and simple corrections. All the rest: FORGET IT There is no need to make your job more difficult then it needs to be. If a chart does not appear to show any basic elliott wave attributes, then find another market or issue that does.


Good Luck
 
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