Practical use of Elliott Wave analysis

[Sean K]

Still can't see any practical use here.

EW is only correct in retrospect after being curve fitted with multiple tops and bottoms ignored and can not be applied in real time.

A nice post from a previous 'practical use of EW' thread.

Nick,

If this is practical Elliot wave then it’s ambiguous at best.

Take CBA as an example.

You don’t know C is a wave until price moves away from C, as it isn’t
hard-coded into the methodology. As most EW traders could, would, or
might not have done the same thing

You’ve reacted to the price action and are trading the price action
rather than using EW to make any entry decision.

Your entry isn’t based on EW, but rather price action, and now your
potential target is based on a fibonacci extension pattern.

In my opinion you’ve just applied different strategies to trade CBA, but
then optimized Elliot wave into the equation afterwards

Which makes much more sense to me, and illustrates why EW is
constantly lagging and being optimized afterwards.

Then the question begs, why would you use EW in the first place if you
are relying on other variables to make trading decisions based on entry.

You might as well just find set-ups in the market, optimize your
entry strategies and apply fibonacci extensions techniques, instead
of constantly curve fitting EW.

It would be make much more sense in saying... "I use certain trading
set-ups that are unique to myself and some others, and then I optimize
my trading using Elliot wave afterwards:- Practical Trading"

This is why EW is illusory to the majority because each entry taken is unique the individual trader and then curve fitted to suit the methodology, resulting in different counts and wave structures and confusion based on an individuals interpretation of the trend…..

Or in your case the trade.

 

[Boggo]

You may have missed this kennas

To those of you who see E/W as of no value great go on and use whatever it is that you use. Your right it has absolutely no value---to you. These posts are there for those---if any--- who wish to investigate further.

 

[Sean K]

You may have missed this kennas

We are both wasting our time Boggo, along with anyone else being bamboozled by AGET.

EW has so far proved to have no practical use at all - IMO!

 

[colion]

In "Dynamic Trading" by Miner there is an interesting bit of Elliott history and philosophy that I think often gets lost. Here is an excerpt:

"The beauty and significance of R. N. Elliott's work is that he recognized that markets are composed of groups of people that respond as crowd behavior ... This process results in a fairly predictable pattern of behavior of cycles of optimism and pessimism. The process and pattern of behavior is represented on price charts of financial markets, as the price charts are simply reflections of the state of the psychology of the group participating in the market.

Elliott developed his theory over less than a ten year period ...

It is these early works of Elliott that I find most valuable. Here is found the spirit of the fundamental truths of what Elliott discovered about pattern and process in the cyclical development of the financial markets, unencumbered with the need to explain every little twist and turn on the financial charts. There were no X waves, no complex corrections, just fives and threes. Occasionally, a fourth wave traded into the territory of wave one. Occasionally, a third wave was the shortest impulse wave. The form was more important than any rules. The process would not be denied.

[In his later works from 1938 - 1946] it became evident that Elliott felt he must show his theory to be right under all conditions, at all times ... we find that he made his theory fit whatever market activity unfolded ... Here we are introduced to thee dreaded X wave ... which mysteriously shows up whenever a market correction does not comply with a three (ABC) or five (ABCDE). No correction will be denied its count!

It is also during this time that Elliott begins to expound on the Fibonacci number series. Elliott's knowledge of Fibonacci number and ratio is elementary, at best ... this aspect of market activity was obviously not well thought out or research by Elliott. After what can only be considered a brief study of number, ratio and geometry, Elliott was amazed and thrilled that he had discovered the "secrets of the universe" and the great "laws of nature" ...

What is the point of this brief history of R. N. Elliott? The practical application of Elliott's Wave Principle to trading and investing decisions has its strengths and weaknesses. Elliott did not describe a "law of the markets" with inviolate rules. With a limited history of data and within a fairly short period of time, Elliott recognized an important process that developed in the cycles of market activity. He recognized that the form of this process was fairly regular, which allowed for a certain degree of predictability and future behavior. He recognized that markets have a fairly, consistent symmetry of ratio based on the Golden Mean (1.618) ...

Knowledge is never static ... How can we say that Elliott's Wave Principle may also not be as complete and inviolate as some would like us to think? ...

... these rules ... are usually not violated in real-time market activity. They provide an objective guide to understand market position and to make objective decisions. Implement the rules in your wave counts.

Occasionally, you will be betrayed by the truth of the market which does not always follow the rules, but more times than not the "rules" will keep your view of the market in proper perspective.

Experience will provide the knowledge and intuition when to break the rules. But don't be too quick to do so.

If you are going to violate the three so-called "inviolate rules" of Elliott wave analysis, be consistent regarding these violations. ... take the rule that a wave four of a five wave impulse sequence may not trade into the price range of wave one. I only consider that rule violated if the suspected wave four closes within the closing extreme of wave one ... I know of other traders who have thoroughly studied markets and only consider a trade greater than 10% into the wave one range of many markets as a violation of the wave four-wave one overlap rule.

So-called Elliott wave purists, or, as I call them, traditional Elliott wave analysts, would say that expanding the parameters of this rule in either of the above ways is not trading R. N. Elliott's Wave Principle. I'll let you decide what you want to call it. The Elliott wave purists are mostly academic advisors who do not apply the principle successfully to their own trading or investing and have generally been creamed in the stock market in the last few years calling the top of the market more frequently than the full moon cycle.

Elliott provided a firm and original foundation for pattern analysis in the markets. Don't hesitate to expand on Elliott's work when your market research proves it necessary and profitable."

 

[tech/a]

Colion

Yes exactly how those of us apply Elliott see the analysis.

Kenna's

Dont waste any more of your time.

As for everyone else.
Wave 5 is well underway.
Posts #99 and #135 were/are on top of it.

 

[sinner]

We are both wasting our time Boggo, along with anyone else being bamboozled by AGET.

EW has so far proved to have no practical use at all - IMO!

If you are finding AGET to be bamboozling, I suggest you look into their two most mechanical and simple setups which anyone could implement without even actually requiring AGET.

Chapter 11 here with zillions of examples:

http://www.esignallearning.com/members/getManual.aspx

 

[Chris45]

Re: Practical use of Elliot analysis.

Great thread tech, but it's going to end in an argument I feel.

Once again kennas, you have made sure it did. Your mission here seems to be "search and destroy".

I would like to see you start a thread "Practical use of Kennas' Analysis" with examples of your 'live' (as in before the fact) analysis of stocks so we can see how your methods work. To his great credit, Frank D does it.

I'm guessing it's not going to happen.

 

[Boggo]

Re: Practical use of Elliot analysis.

Once again kennas, you have made sure it did. Your mission here seems to be "search and destroy".

I would like to see you start a thread "Practical use of Kennas' Analysis" with examples of your 'live' (as in before the fact) analysis of stocks so we can see how your methods work. To his great credit, Frank D does it.

I'm guessing it's not going to happen.

There are about half a dozen of these enlightened folk who appear on every thread that is associated with anything more complex than a moving average crossover as that seems to be the limit of their ability.

They remind me a bit of some of the military trained personnel that I work closely with.
They have spent so many years believing that they have been taught everything there is to know and if they haven't been taught and they don't understand it then its fertiliser.
I am talking 'Top Gun' level people here, very talented but a mindset that is set in stone when it comes to thinking outside the square.

As tech/a mentioned earlier, in the case of this thread I do wish that they would just not disrupt what is being discussed if they do not understand it.

Rant over.

 

[namrog]

I've been following this thread and have to say it's been both educational and entertaining ..but to say that those that do not understand are being disruptive is a bit one eyed.
How boring and pointless would it be if only those that understand contribute to the thread, would be like preaching to the converted, indeed it usually takes those that don't understand by their asking of questions that the discussion opens up ..
So whether you agree with him or not I think Kennas has every right to participate, and why not prove his doubts on elliott wave wrong by giving him the live calls he is asking for...
I have to declare that I sit on the fence somewhat when it comes to EW, am happy enough to use it when I see it clearly on a chart, I don't use it on it's own, but along with other analysis, it does give me confidence that I'm on the right track ..

Also agree we are in wave 5...

Hope to see the thread continue, have appreciated all contributions ..

Sorry for the spelling and grammer Kennas...

 

[sinner]

Another great example of "Practical use of Elliott Wave analysis" is a resource released a while ago by Elliott Wave International, called "How to use bar patterns to spot trade setups".

Now, the thrust of the document is not really about EW, but the author Jeffrey Kennedy shows how he combines these simple bar patterns in his broader EW analysis. e.g. if he's looking to enter a wave 3 up he will use a bar pattern with bullish bias to enter.

But the proposed wave 3 up is his main trend/cycle signal! And the proposal can be either by an algorithmic software package like AGET, or it can be by your brain. Either is fine!

I use a intraday breakout myself, finding it meshes better with EW principles (imho only), but whatever. AGET setups posted in "Chapter 11" above use schaff channel breakouts. The idea is to get into a wave 3 or wave 5 movement, and however you do that is fine.

Can you see in the below screenshot, a popgun is printed just after the wave 4 low in the first (hourly) chart? Jeffrey Kennedy shows the popgun which leads to wave 3, but you can see another has developed heading into wave 5! This is a great example of using price action setup to enter into a proposed Elliott Wave.

Just google the title and author, it's a free resource.

 

[Sean K]

Re: Practical use of Elliot analysis.

Once again kennas, you have made sure it did. Your mission here seems to be "search and destroy".

I would like to see you start a thread "Practical use of Kennas' Analysis" with examples of your 'live' (as in before the fact) analysis of stocks so we can see how your methods work. To his great credit, Frank D does it.

I'm guessing it's not going to happen.

Read my ADF Blog back over the past 4 years. In 'positions' there are 21 pages back to 2007.

 

[Chris45]

Re: Practical use of Elliot analysis.

Read my ADF Blog back over the past 4 years. In 'positions' there are 21 pages back to 2007.

Link please?

 

[Sean K]

Re: Practical use of Elliot analysis.

Link please?

Ha!

Sorry, that's ASF Blog.

https://www.aussiestockforums.com/forums/blog.php?u=3610

 

[sails]

Re: Practical use of Elliot analysis.

Ha!

Sorry, that's ASF Blog.

https://www.aussiestockforums.com/forums/blog.php?u=3610

I'm sure that ADF would be typed as easily as ASF...

 

[Chris45]

Re: Practical use of Elliot analysis.

Ha!

Sorry, that's ASF Blog.

https://www.aussiestockforums.com/forums/blog.php?u=3610

I scrolled back and read Sep and Oct-07 entries. Your blog seems to be mainly just bought this, sold that, plus some lifestyle stuff and not much in the way of discussion of stock analysis before the action. Is that as good as it gets or do you go into details of your analysis somewhere else? A thread would certainly be much easier to follow than the blog.

 

[Porper]

It is these early works of Elliott that I find most valuable. Here is found the spirit of the fundamental truths of what Elliott discovered about pattern and process in the cyclical development of the financial markets, unencumbered with the need to explain every little twist and turn on the financial charts. There were no X waves, no complex corrections, just fives and threes. Occasionally, a fourth wave traded into the territory of wave one. Occasionally, a third wave was the shortest impulse wave. The form was more important than any rules. The process would not be denied.

Good post colion. I find his earlier work much more useful than the amended version by Prechter etc. Miner is much less stringent and aligns much more with the time aspect which is an added bonus.

One of Elliott's earlier quotes to Collins sums it up well.

"I consider it far more important to know when the terminals are actually reached than to hazard a guess"

People will read into this what they will but it is very apt i.m.o.

 

[tech/a]

Well it appears Kenna's seems to be with the minority who struggle with the Practical use of Elliott.

I know what Kennas wants to see.
Elliott used as a stand alone analysis tool which gives (In real time) Entries and Exits.
I dont know of any trader who actually trades that way.
I know many who trade with other tools as already mentioned.

EVEN AGET
Has 5 main trading methods which use confirming signals to trade.

I'm happy to run some trades based upon those.
If anyone is interested.
It will be about as close as you can get Kennas to Just Elliott.

 

[IFocus]

Well it appears Kenna's seems to be with the minority who struggle with the Practical use of Elliott.

I know what Kennas wants to see.
Elliott used as a stand alone analysis tool which gives (In real time) Entries and Exits.
I dont know of any trader who actually trades that way.
I know many who trade with other tools as already mentioned.

EVEN AGET
Has 5 main trading methods which use confirming signals to trade.

I'm happy to run some trades based upon those.
If anyone is interested.
It will be about as close as you can get Kennas to Just Elliott.

I think you are being baited by some one carrying the burden of pass conflicts, you have nothing to prove Tech and personally disgusted by those that turn up here with demands of those that are not selling product etc putting enormous time and effort but with little or nothing to show themselves.

I could understand if you guys were pushing EW as the be all and end all but you're not.

Don't get sucked in by others agendas.

 

[tech/a]

Mate its no problem.
I can actually trade so it doesn't bother me!!

I'm just showing what I do.

 

[Chris45]

Tech, I agree with IFocus and ask that you please IGNORE kennas and the other naysayers and keep posting. I have learned much from your posts and I only wish I had discovered you and ASF a couple of years earlier. This post still sticks in my memory as one of the most remarkable on this forum and if some people can't see that as an indication of the power of EW & your ability with AGET, then they are idiots.