Trading from Theory

I have been corresponding with a mathematically oriented gentleman who is quite brilliant in his approach to the markets but who is very close to going off the deep end. He wrote me the following email:

“I have given the 45 degree - phenomenon a lot of thought. I pretty much would like to know how you figure out the inner workings.

“What I think is:

“(a) The route of the 45 degree cuts the Elliot 3 pivot and the 4 reverse pivot in half. The retracing swing from 3 to 4 (starting off with what looks like a congestion) is the playing field of the insiders. It quickly develops into a squeeze to the downside before the final 5th wave shoots up.
“(b) Those who know what is happening, take full advantage of the less informed by jumping on their resting orders. The key is the knowledge that the 5th wave lies ahead. Then the load of contracts could be transferred to the public's ‘greed-panic.’”

While I would like to agree with what he has stated above, I’m not really sure of what he actually said: Are you? I submitted the following answer:

I know virtually nothing about how to count Elliott waves or the meaning of Elliott wave counts. I have no reason to believe in them and many reasons to believe that they are nothing more than a THEORY. Personally, I want to trade based on facts and the reality of what I’m seeing. My belief that Elliott Waves are virtually worthless comes from the results others have obtained from following them. I am very familiar with these results. I know that Elliott practitioners have been dead wrong about the stock market for over 12 years running. Elliott wavers missed the bull market of the 1990s. I know that they wrongly predicted the fall of the U.S. dollar this year. The U.S. dollar has risen since early this year. I know that people who follow Elliott Wave Theory were wrong about gold and silver for many year, predicting rises as those metals fell to multi-year lows. It is difficult for me to understand why anyone would want to trade based on a theory when they could trade based on what is plainly seen in the markets.

ah elliot waves
where do you start the count?
no one knows

very useful

I know of a prominent technical trader, who has just given up on Elliott after studying it for ten years. With the reason that he has never met two Elliottians who came up with the same two answers.