I do like EW, but right now it's useless, other than to say the markets at or near a top. It could go down or up from here, but other indicators suggest at least a 2 day down move. Personally I'll be looking for another pop up from mid-next week; then just have to see how high it goes by the 3rd week of August.
hungrybear........how often do you hear people say that EW is not working "at the moment" or that EW does'nt "really work" for equities or "my count must be wrong" ?
bonsai and others posting here are great fans of John Piper. Read what he says about EW, he is highly critical,, and yet even he makes constant reference to the various waves in his market analysis. I suppose that that once you've studied it you become infected ?
I'll bet that if elliot had come up with a formula that stipulated 8 waves up and 5 down then Prechter and Frost would have been able to "curve fit" the data just as well as they have with the existing formula.
Just a thought lads,
Wondering why none of you guys use the T2win chat forum? If you type /join #x in the chat window on the advanced T2w chat system it opens up a new channel that was intended for those that wish to trade the FT 100 or future, I,m on it now, but there only me there.....prehaps that tells me somthing?
I've admitted EW's pretty useless right now, but that's the nature of the corrective phase. There are several elements of EW which do work well, including the difference between impulsive and corrective waves and the psychology behind the different wave moves. Even a historical perspective is interesting as it gives an idea of where the markets are likely to be heading in the longer time frame.
However, it is addictive and it's addictive because it has plenty to recommend it and to help in making trading decisions. That said, every trader has to be comfortable with the techniques they use, so if you think EW is rubbish then you're clearly not going to use it to back any decisions you make. Then again, there are some techniques I don't use - but it doesn't mean they're rubbish.
My major problem is with any methodology that suggests predictive qualities. You cannnot predict the market full stop. All you can do is take low risk positions and be lethal about cutting "wrong" positions. I have no idea where markets are going but if a low risk position works out correct I run with it until the market tells me to cut (fails to take out resisitance etc)
EW is predictive by nature. Markets exist because there is uncertainty about the future. If the future was predictable markets would collapse,because we would immediately go to the level suggested. Thats the problem with EW. It doesn't mean that a very clear will be seen by lots of EW follows and I do not mind taking advantage of it, but no more than that.
"My major problem is with any methodology that suggests predictive qualities. You cannot predict the market full stop."
This is actually where EW is very strong. It does predict the market and provides clear and definitive stop points to get out of a trade. In other words, when you enter a position based on a wave count, there are definitive points which state that the wave count is wrong, which can then be used as exit points.
Any trading system is predictive, otherwise why use it, but no system is perfect so predictions can be wrong. If a system isn't predicting the likely direction of the market it's no better than flipping a coin.