Trading Indicators Are Useless

[Porper]

Personally I think Elliot Waves are a joke.

A lot of people that don't understand how the theory works think the same. First of all it's "Elliott Wave" not "Elliot" which tells me straight away that you haven't studied it. It is no better or worse than any other technique i.m.o. However Prechter is a broken record who has been predicting the end is nigh for Donkey's years. It's a shame as he brought the theory back to the public eye pretty much by himself in the 70's - 80's.

The main problem with the Wave Theory for me is that you can "force" a count onto a chart if you have a bias to which direction you think price is going to head...just like Prechter has been doing for all these years. Mind you he has earned...and is still earning a fortune out of his scaremongering.

Robert Miner's teachings are much better from a trading perspective as he keeps it simple.

 

[pavilion103]

A lot of people that don't understand how the theory works think the same. First of all it's "Elliott Wave" not "Elliot" which tells me straight away that you haven't studied it. It is no better or worse than any other technique i.m.o. However Prechter is a broken record who has been predicting the end is nigh for Donkey's years. It's a shame as he brought the theory back to the public eye pretty much by himself in the 70's - 80's.

The main problem with the Wave Theory for me is that you can "force" a count onto a chart if you have a bias to which direction you think price is going to head...just like Prechter has been doing for all these years. Mind you he has earned...and is still earning a fortune out of his scaremongering.

Robert Miner's teachings are much better from a trading perspective as he keeps it simple.

I've read some of his work and I enjoyed it.

I haven't delved into EW too much, but I see some merit in it.

Like you said though, forcing a count is a bad error when undertaking this form of analysis.

 

[tech/a]

Just to add to Porper's comments.

Firstly to Prechter.

The guy makes more from Newsletters than anything else.
He knows that sensationalism sells. He is also correct in that the western monetary system is in shambles.

If you really want to scare the bejeebas out of you grab this for an excellent read.

http://www.penguin.com.au/products/9781921880131/extreme-money-masters-universe-and-cult-risk

But the point is that the whole worlds economic bureaucracy is fighting to keep the insatiable machine a float.
Prechters down fall is he keeps looking for a finality with only one Tool Elliott.

Let me tell you that when it does collapse even partially which occurred in 2008/9 blind Freddy will see it as we did then. They made films about it.

Lets face it he gets a heap of press and as its been said even bad press when used correctly can be very powerful.

There are new bunnies born every day---they keep hearing the contrarian view. (IE Forget about the crowd step outside---that's how you make REAL money) Prechter is way way out of the crowd.

But youll always get those who just have to know---what if he IS RIGHT THIS TIME?
(1) I could make a fortune
OR
(2) I could lose a fortune.(My super).

What Prechter does wrong in my view is he falls victim of the beauty of Elliott himself.
He remains concreted to his conviction in the direct light of technical evidence to the contrary.

THAT IS VERY POOR TECHNICAL ANALYSIS.

Clearly the whole economic world is committed to growth even in the light of total incompetency (It could be argued). I don't follow Prechter but would suggest that trading anything bullish in a chart (And clearly the indexes shown are showing and have shown clear bullish sentiment ) while holding the view many hold without continually placing a date on it---would be more beneficial----Well Id have thought.

So to Elliott Wave.
Is it worth the effort.

There are quite a few who I respect as traders who use it and use it profitably.
I do.
Boggo here does and has shown many times trades at setup and completion.
Radge does and I've seen countless setups play out.

Having said that any experienced analysts will tell you they have seen just as many fail as well---I'm no different but I can unequivocally tell you that knowing how to apply the analysis and how to trade when analysis both succeeds AND Fails is more important than the ANALYSIS ITSELF!

But what do you need to know.???

Personally my view is you need to know the BASICS of a count.
You need to know that a count is clear and concise---infact my rule is that if I cant see it instantly then I wont use Elliott in my analysis on THAT chart in THAT timeframe. (When its clear I've found it VERY Powerful)
Even when its clear I will use it in CONJUNCTION with other analysis.
I never use it to set a price target in stone.---But will be very aware of that level.---other analysis can confirm or negate the analysis at wave pivots.

I never attempt to count complex corrective moves. I use other analysis for what's happening within a corrective move.
So in a nut shell.

KEEP it SIMPLE

If your a discretionary trader I strongly suggest you include it in your arsenal.
If your lazy like me then get MT predictor or Advanced GET (My choice) but make sure you are an EXPERT at the basics---be capable of marking up your own chart. (So you know when the algorithm in the software is struggling to find a clear concise count!)

 

[Boggo]

Robert Miner's teachings are much better from a trading perspective as he keeps it simple.

But what do you need to know.???

Personally my view is you need to know the BASICS of a count.
You need to know that a count is clear and concise---infact my rule is that if I cant see it instantly then I wont use Elliott in my analysis on THAT chart in THAT timeframe. (When its clear I've found it VERY Powerful)

Even when its clear I will use it in CONJUNCTION with other analysis.

KEEP it SIMPLE

If your a discretionary trader I strongly suggest you include it in your arsenal.

to all of the above.

A recent example.
Bought SEA on at breakout at $1.05 (identified in a Metastock scan) that also had potential from an EW perspective.

On the chart below note the red volume bar appearing (July 2nd) in an area where a potential EW target maximum also appeared (tech/a can expand on this particular volume process much more eloquently than I can).

Got taken out at my stop of $1.21. I may be completely wrong in what I have done but for me this process works but in quite different ways for different stocks. This is just one example where there are up to four elements involved in the entry and in the exit.
If this stock does come back into the W.4 area or breaks out from the recent high then it may be revisited but for now it is just a trade that made a profit.

Any one piece of software will only do what it is designed for, in the case of EW software it will find patterns and present them to you. It doesn't take into account all the other factors that you need to have at your disposal.

(SEA - click to expand)

 

[pixel]

A lot of people that don't understand how the theory works think the same. First of all it's "Elliott Wave" not "Elliot" which tells me straight away that you haven't studied it. It is no better or worse than any other technique i.m.o. However Prechter is a broken record who has been predicting the end is nigh for Donkey's years. It's a shame as he brought the theory back to the public eye pretty much by himself in the 70's - 80's.

The main problem with the Wave Theory for me is that you can "force" a count onto a chart if you have a bias to which direction you think price is going to head...just like Prechter has been doing for all these years. Mind you he has earned...and is still earning a fortune out of his scaremongering.

Robert Miner's teachings are much better from a trading perspective as he keeps it simple.

I admire your poise, Porper.

No matter how uneducated an objection, you keep your cool and explain your reason - pro and con - why you use Elliott Wave counts to estimate likely future market behaviour. I haven't studied EWs to the extent necessary to allow me an in-depth judgment. But I have been in contact with several expert traders that use them very successfully. One facet common to all of them: If an extrapolation (expected outcome) fails to materialise - something that happen with any analysis method, be it technically or fundamentally based - the true EW analyst will go back and adjust his wave count. IMHO, that defines the Professional: Recognition that one's analysis delivers a potential outcome, not a prediction. Some methods are delivering outcomes that have a high probability of success; others "get it right" less often. The trick lies in recognising which is which and then mustering the humility and courage to switch to Plan B.

PS: As to Prechter's earning ability, your comment reminds me of an old adage from a place and time far away. It translates as "He who can, does. He who can't, lectures."
(If one were sarcastically inclined, one might add, "He who can't either, criticises.")

 

[minwa]

PS: As to Prechter's earning ability, your comment reminds me of an old adage from a place and time far away. It translates as "He who can, does. He who can't, lectures."
(If one were sarcastically inclined, one might add, "He who can't either, criticises.")

That adage doesn't work in trading. For example Buffet and Soros have proven they can "do", but they also "lecture" (books, maybe "seminars" as well I duno). Prechter's newsletters may be bad performance but he WRITES what people WANT to hear - his primary reason for writing is to sell. Maybe he is a very capable individual turning lots of profits in his personal accounts which we don't see - maybe his own trading doesn't following his writing analysis. He is not going to write "probably slightly more upside, but too risky, not worth r:r, stay in cash" which he does in his own account. He will stay in cash in his account and write "bull market roaring ahead - here's the hottest picks" or "the top is almost here - get ready to load up on shorts" - these will sell more subscribers.

We know in Soros and Buffets case - "He can, and does. He can, and lectures. He can, and criticises."

 

[tech/a]

And then.

Ignorance is an expensive teacher.

Spot on Pixel
Your both on the same page!

 

[banco]

That adage doesn't work in trading. For example Buffet and Soros have proven they can "do", but they also "lecture" (books, maybe "seminars" as well I duno). Prechter's newsletters may be bad performance but he WRITES what people WANT to hear - his primary reason for writing is to sell. Maybe he is a very capable individual turning lots of profits in his personal accounts which we don't see - maybe his own trading doesn't following his writing analysis. He is not going to write "probably slightly more upside, but too risky, not worth r:r, stay in cash" which he does in his own account. He will stay in cash in his account and write "bull market roaring ahead - here's the hottest picks" or "the top is almost here - get ready to load up on shorts" - these will sell more subscribers.

We know in Soros and Buffets case - "He can, and does. He can, and lectures. He can, and criticises."

I don't think Soros is a good example. His methods are highly discretionary and he usually talks about economics more generally. Buffett's methods are obviously based on Ben Graham but lots of people have read Ben Graham and there's only Buffett. It's not like you have CTAs giving away the details of their systems.