The Elliott Wave Analysis Thread

[wavepicker]

Thanks to both of you for your thoughts.

Not particularly interested in Wave counts(as like you both I do my own) , but Fib Time expansions and other time add -ons available for DT5, and seeing if anyone currently using them and integrating these within their analysis. Especially with regard to use with calendar day time axis if that is available in DT5.

Cheers

 

[Porper]

Thanks to both of you for your thoughts.

Not particularly interested in Wave counts(as like you both I do my own) , but Fib Time expansions and other time add -ons available for DT5, and seeing if anyone currently using them and integrating these within their analysis. Especially with regard to use with calendar day time axis if that is available in DT5.

Cheers

I haven't had time to look into the calendar day counts although I know it does have this function.Calendar days or trading days, but calendar day counts are supposed to be the more accurate for time projections.

I think using this with the time cycle ratios and alternate time projections is the way to go.This is my intention when I have time to learn the ins and outs of the software.

Have a look at the DT web page.There are videos by Miner explaining in detail what functions are available.He is very "time frame" orientated.

 

[It's Snake Pliskin]

Snake you are dead right about EW and illiquid stocks. EW is a representation of mass social mood. Therefore where the crowds emotions are best represented is in very liquid markets. I rarely trade stocks using EW alone, in fact I rarely trade stocks. There is way too much white noise in individual illiquid stocks

The best representations of EW therefore are seen in the following:

-Indexes
-Currencies
-Commodities

etc

Sure there are setups in the more liquid stocks, if fact there can be many setups and opportunities, but more often than not you will be hard pressed to find them and you will really have to know what your doing. There can be too much ambiguities and subjections if this is done using EW in isolation and one really needs to use other methods to quantify the price action. If you are trying to force a count on a stock that simply isn’t there then you are asking for trouble IMO, it has to rally stand out and have the right proportions, otherwise move on and find something else that does

Cheers

Wave,

Thanks for the input to the thread.
I often question myself wether EW is of any use on the ASX, simply because of the size of the market. The reason I explored its use was for forex with its huge liquidity.

Using a strategy that requires liquidity narrows the opportunity that may be found in the ASX. Is this worth pursuing if one only trades the smaller lighter markets? This may cause some anguish with some but it is worth serious research I feel.

I see you have an interest in those calendar projections. I will be happy in due course to talk about them - not yet though.

Snake

 

[chops_a_must]

1: Certainly NOT, one can just look for very basic 12345 Impulsions and abc Corrections and most do. But learning the theory more in depth can increase your analysis skills and you maybe able to see more pportunities/probabilities in which to take a trade. Like anything it really depends what you want from it

2: The best book I have come across and the original is Elliott Wave Principle Key to Market Behaviour by Frost and Prechter. That is a starting point and a great orientation regarding EW analysis. For application(and this really depends on your trading style and objectives) I like a book by Steven W Poser called Applying Elliott Wave Theory Profitably. There are many, many books out there however.

There is something I must mention here, there are multiple schools of Elliott:

The 2 most that are well known are:-

-The Prechter Style which is an extension form the original works of RN Elliott
This is what most Elliotticians follow

-The Neely School. This is a completely different approach developed by Glen Neely. He has written a book called “Mastering Elliott Wave” teaching it. This approach has concepts that all but remove any subjectivists/ambiguities from the Prechter approach. It is truly the most objective form of EW Analysis. However it is very, very difficult to master it, many more rules and guidelines compared to the traditional approach but much more accurate if done correctly. I believe Glenn Neely is doing some free seminars in all the capital cities soon. I don’t know anyone who has mastered this approach in this country. Zoran Gayer(from Adelaide) was the best but he passed away a few years ago.

3. Re: Books on application: There are many out there, look for the EWI library they have some good ones. Another good one is Dynamic Trading by Robert Miner but I find it more tailored around his software but it can also be used in isolation

I have a some good info which briefly explains it what you are after . It’s very good. Send me a PM and I will arrange to send it to you

Thankyou very much for the time spent in your reply. It is much appreciated.

Cheers,
Chops.

 

[theasxgorilla]

Wave,

Thanks for the input to the thread.
I often question myself wether EW is of any use on the ASX, simply because of the size of the market. The reason I explored its use was for forex with its huge liquidity.

Using a strategy that requires liquidity narrows the opportunity that may be found in the ASX. Is this worth pursuing if one only trades the smaller lighter markets? This may cause some anguish with some but it is worth serious research I feel.

The viability of EW and the ongoing validity of any wave count seems to me to depend upon the magnitude of the activity of the market participants remaining somewhat comparable. That is to say that the greater the probability of a small number of partipants moving the market with enough force to take it well outside the bounds of even extreme volatility ie. a large multiple of the ATR (3+???), then greater will be the probability that a chart with perfectly countable waves could become undiscernible.

In this way it's not actually the liquidity of the market that is the threat to EW being viable, but rather the probability of a small number of participants skewing the mean-sentiment (chart patterns) of other participants and creating beyond extreme (price-relative-to-time) activity.

And it is not only the activity of a small number of forceful participants that can affect the viability of EW for a given market. Consider a global catastrophic event. eg. aliens invade, or something. Presuming the market was still operating, a subsequent run on the market by the multitude of participants could generate such extreme (price-relative-to-time) activity that wave counts would likely go out the window. Aliens invading might seem a little facetious...but what if you were trading markets in a country with an overly powerful government, or a dictator? Where the decisions of few can skew the mean-sentiment of the many wave counting is at risk.

Some will argue that all of this extreme activity is part of the actual wave counts, if only we zoom out to a count of high enough degree...but this suggests that Elliott Wave can predict things that haven't yet happened. Anyone who attempts to convince others of this are full of the proverbial. To quote Prechter and Frost...

"the most efficient form of punctuated progress is 5-3, and nature typically follows the most efficient path". Notice that they said "typically", not always. Practical application of Elliott Wave is attempting to observe and sort out how human beings "typically" progress and regress a market. It does not and cannot predict.

Practical applications for trading EW with small cap securities in consideration of the above mumbo jumbo...

1. Use line charts based on close. Extremeties of large intraday price moves that formed 'tail' patterns and broke an EW rule might not appear. Your wave count could remain valid despite a single atypical event.

It's important to note however, that 'tail' patterns can have their own bullish/bearish meaning, so don't stop looking at bar/candlestick charts!

2. Realise that even when an EW count is so clear that it virtually jumps off the screen at you, there can always be an unknowable threat to any open postion. Manage risk.

3. A good wave counter may get their count correct on 80% of occasions but still win less than 50% of trades. Position size.

This is what I do. You don't have to do the same...it's just how I rationalise EW and incorporate it into my trading.

The ASX Gorilla.

 

[Nick Radge]

Personally I can't justify price/calendar cycles or sentiment indicators. Appreciate others can put it to good use, but I can't. How can one measure real sentiment anyway?

I have now incorporated seasonality into my analysis which I have been researching for 2-years. Seasonality is based on market forces that do in fact really exist, such as dividends, AGM's, tax periods etc. The seasonality is collected from the price history of the instrument across numerous timeframes, then overlaid on current activity. If the timeframes match then we have a high confidence of seasonality. If they diverge, we ignore it. Applied alongside EW or other patterns I beleive will add value to the bottom line. I don't know of anyone else doing this.

You can clearly see its validity in the chart below. Green means seasonal strength is due. Take note that it was due on 17 April and sure enough we were also expecting a wave-v to start higher. From 12 May we expected seasonal sideways activity which in this case coincided with the larger degree wave-(iv). Strength was due again on May 22...yesterday we broke higher into the wave-(v). We also know that weakness is due at or around June 10. Chances are that the current wave-(v) will terminate sometime near that date.

 

[It's Snake Pliskin]

Personally I can't justify price/calendar cycles or sentiment indicators. Appreciate others can put it to good use, but I can't. How can one measure real sentiment anyway?

I have now incorporated seasonality into my analysis which I have been researching for 2-years. Seasonality is based on market forces that do in fact really exist, such as dividends, AGM's, tax periods etc. The seasonality is collected from the price history of the instrument across numerous timeframes, then overlaid on current activity. If the timeframes match then we have a high confidence of seasonality. If they diverge, we ignore it. Applied alongside EW or other patterns I beleive will add value to the bottom line. I don't know of anyone else doing this.

You can clearly see its validity in the chart below. Green means seasonal strength is due. Take note that it was due on 17 April and sure enough we were also expecting a wave-v to start higher. From 12 May we expected seasonal sideways activity which in this case coincided with the larger degree wave-(iv). Strength was due again on May 22...yesterday we broke higher into the wave-(v). We also know that weakness is due at or around June 10. Chances are that the current wave-(v) will terminate sometime near that date.

Nick,
That is interesting. Statistical TA EW.
I shall construct some questions for you in the near future.

 

[tech/a]

Just a few comments relative to those comments/observations made by others so far in the thread.

Waves has made some very important points.Re trying to devise a count when the count isnt clear.I certainly agree and its something Nick pointed out sometime ago to myself.Corrective waves can be complex at times and getting yourself in knots trying to find a count is just counter productive when applying Elliott analysis to a trade. Just wait till its clearer or find another trade.

Waves also points out that clearer patterns appear in Commodities/Indexes etc,and when following only a few charts it doesnt take long to become attuned to the phsycology of those trading it. Once labelled manually the up keep of a few charts is definately easier than running say 100.

But on the topic of trading stocks.

There are only 6 setups I am currently looking at to trade and there are in the Liquid stocks (ASX300) plenty that are clear enough to follow.
Diverging for a minute AGET searches for these setups but I must agree with Waves/Radge and some others that the counts from GET are often "Fitted" due to the Mathamatical algorithm used to label the charts in the software.

Certainly there are times when a physical count will match but often with the counts for the lower/shorter timeframes they are clearly "best"fit". This in itself can create frustration with users as the counts alter as more price action and the patterns formed make counts clearer.Having even a basic knowledge can weed out those which are not "typical". I dont waste time guessing --if its not like crystal then I move on.

An important observation again which Waves makes mention is that those drawn to Elliott and for me VSA (Volume spread analysis) is that these types of analysis are infact analysing Crowd behaviour.The bigger the crowd the more uniformed that sample set of constituents will react to market price action.

Perhaps to make it clearer.

If a crowd of 50000 were to be analysed for their reaction to fear and greed there will be more in the middle of the Bell curve than there would be for a crowd of 200.Making it easier and more unifirm to analyse.
This is certainly bourne out when Elliott of like analysis is applied to thinly traded instruments.

I personally think that choice of universe or constituents of universe will and does have a large bearing on better application of these methodlogies.

While these methods can be traded alone again as has been pointed out consistent and most profitable trading is found when combining other analysis techniques with the base technique.
As I have mentioned above--one thing I have learnt on BOTH entry and exit is to allow the Price action to COMPLETE the setup for both entry and exit then find confirmation before taking or exiting the position from the setup analysis you do using the Base analysis---Elliott or similar.(Let the price action come to you) This can have a large imact on the profitability of a trade. IE getting in and out at as close as possible to the best entry and best exit extremes. Minimising Stop placement and decreasing drawdown from best exit.

This is seen in Radges teachings if you were to follow his trades in "The Chartist"
You'll note I make mention of Radges Chartist from time to time. I dont expect that Nick will make public that which he charges clients like myself to learn. As a happy client I suggest that if your seriously interested in following and having access to a proven trader who uses Elliott as his Base analysis (certainly in the Chartist portfolios) that you invest the $$s and join.

After all its around the cost of a decient trades profit.

 

[chops_a_must]

I wouldn't have looked at doing a count on this, except for an obvious (so far) W4 set up and the line ups on the fib levels. I wouldn't mind any criticism given this is my first attempt at a count online. But I'm having trouble clarifying the possible outcomes of a wave 5. Is the W5 the length of the W1 on top of the peak of W3. Or is it the length of W1 from where it breaks out from the W4 bottom? Or is it the 1.618 of W3, or 1.618 of W1 from the W4 breakout? As you can see I'm pretty confused about W5's lol!

So for now, I've put the possible W5 between 59 and 64c. If this does turn out to be confirmed as a W4, then I will look to trade based on the projections from the fib levels. The stock is VRE.

Cheers in advance,
Chops.

 

[CanOz]

I thought last nite i should have a look at the SSE as i hadn't for quite a while. Thefirst thing that struck me was that there appeared to be an E-wave pattern. Anyway i thought i would post it for the more experienced to disect.

Cheers,

 

[ricky]

Guys I have found that trading EW using MTPredictor which I fine to be one of the best EW software I have used and I have had a look at plenty.I'm found that at of all my trades I have been correct about 30-40% of trades yes initially it looks like it's pretty bad odds, but like with all of trading if you manage you risk and your keep your risk/reward to >2 you can still make money at these odds.

PS don't try and apply a count if its not there......find another stock which you can, you will soon see the stocks that are trading in a nice symetrical wave.....just manage your risk!!!!!
Cheers

 

[It's Snake Pliskin]

Kennas,

Here is the EW thread.

 

[Sean K]

Kennas,

Here is the EW thread.

Thanks Snake.

Marketwaves,

You need to decide where your EW analysis goes, but it shouldn't be in the last t/a trade thread, when you don't post a trade. Perhaps if you post your trades with the charts that would work??

I think it's all good in that thread you created for yourself actually....

Cheers!! kennas

 

[MARKETWAVES]

Hi there Kennas

I'm glad you created this thread - and I will concentrate my efforts here , ...................
-I just don't understand why in 1 year why Wavepicker has not started a thread of his own
in here in this forum . A year is a long time .....
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Wave picker does his best work with hand drawn charts
which would be a great learning experience for many .
-----------------------------------------------------------------------
instead, I see that Wavepicker is using computer software by Advanced Get
which down plays Wavepicker's true ability of observing Chartpatterns ........

 

[MARKETWAVES]

Special Note :

Nelson Elliott wrote about his own work
Nelson Elliott published papers written by his own hand !

--------------------------------------------------------
W.D. Gann also published many books and gave seminars here in New York

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Why don't traders seek out the work written and published by Mr. Nelson Elliott himself ?.............

------------------------------------------------------------------------------------
Mr. Pretcher and Mr. Frost have seen these works -
Why wouldn't you want to see them yourself ?

I'm basically saying if you are reading anything about Elliott Waves
it should be authored by Nelson Elliott and no one else !

/////////////////////////////////////////////////////////////////////////////////////////////
It was Mr. Nelson Elliott that created this trading method

- So doesn't it make sense to read his work directly ?.....

 

[wavepicker]

instead, I see that Wavepicker is using computer software by Advanced Get
which down plays Wavepicker's true ability of observing Chartpatterns ........

Once again I repeat Market Waves, Advanced Get I use only as a whiteboard and marker, like I do with some other platforms.

My wave counts are NOT generated by Advanced Get, they are created by the best computer around, the one that's between every person's ears. Almost everything I post regarding EW and other TA methods to quantify EW waves is my own work and nobody or anthying elses. If there is anything you would like to exchange ideas on (wavecount) please let me know.

Cheers

 

[MARKETWAVES]

Once again I repeat Market Waves, Advanced Get I use only as a whiteboard and marker, like I do with some other platforms.

My wave counts are NOT generated by Advanced Get, they are created by the best computer around, the one that's between every person's ears. Almost everything I post regarding EW and other TA methods to quantify EW waves is my own work and nobody or anthying elses. If there is anything you would like to exchange ideas on (wavecount) please let me know.

Cheers

Let's use this thread to posts Chart Ideas if its ok with you -
this thread just opened a few hours ago , and 50 people have filled out the poll
just above wanting to learn more about Elliott Waves Formations
-----------------------------------------------------------------------------------------------------
I haven't seen any thread in this forum with that kind of interest in such a short period of time , have you ?
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

 

[tech/a]

I haven't seen any thread in this forum with that kind of interest in such a short period of time , have you ?

Get a grip.
I started the thread and the poll around 7 mths ago.
The last thing this form of analysis needs is condesending observations of people who use it--regardless of level of knowledge.

Marketwaves by all means discuss it but can you stop being the human headline for Elliot.
Its like dealing with an evangilist!
Might be big in the States but leaves most Aussies cold.

 

[MARKETWAVES]

Get a grip.
I started the thread and the poll around 7 mths ago.
The last thing this form of analysis needs is condesending observations of people who use it--regardless of level of knowledge.

Marketwaves by all means discuss it but can you stop being the human headline for Elliot.
Its like dealing with an evangilist!
Might be big in the States but leaves most Aussies cold.

This is not the the States vs Australia , there is no competition here
People are people where ever you are ....................
---------------------------------------------------------------------
I can only be me ........... I would'nt want to change anyone

There are people who appreciate what I am saying
and
Im sure there are others who appreciate what you are saying also ........

You are what you are , and I am what I am ,,,,,,

I understand ,
So in an effort to Keep the Peace I will not post in here anymore .....
--------------------------------------------------------------------------
I will stay clear of your thread , please excuse me .....
It was Kennars that decided move my posts in here in your thread
-----------------------------------------------------------------------
I was just trying to follow along with what he was suggesting by posting
in here ..... I will also ask Kennars to remove my posts that he has put here

Again please please excuse me ..........
I will post elsewhere ....Thanx alot
-----------------------------------------------------------------------

 

[wavepicker]

Let's use this thread to posts Chart Ideas if its ok with you -
this thread just opened a few hours ago , and 50 people have filled out the poll
just above wanting to learn more about Elliott Waves Formations
-----------------------------------------------------------------------------------------------------
I haven't seen any thread in this forum with that kind of interest in such a short period of time , have you ?
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Speaking of forums MW, what happened to your blog/forum on EW?? Is it still active?