Article How to trade Elliott Wave

T2W Bot

Staff member
1,454 55
Looking at all of the glossy ads promoting analysis software, educational courses, seminars, workshops, newsletters, past gurus, new gurus, astrologers etc. you could be forgiven for thinking that taking profits out of markets is simply about something called ?forecasting??
All you need to do, apparently, is pay your money and you too can forecast with such amazing accuracy that you?ll be able to trade on the hoof for just an hour a day as you travel from beach resort to, er?beach resort. Yes, it?s really you on the lounger by the pool in that promo!
Strangely enough, trading is not like that. Professional traders have nothing but disdain for the hype and misinformation peddled largely by those catering to the masses of private traders. ?Professional? doesn?t mean ?permanently making money?, by the way. It has a lot more to do with the crucial elements of trading often never even mentioned in the ads and promos. ?Professional? is more an alternative for ?controlling risk...
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Bluebelle

Member
70 2
Having read this article, I still can't see how EW theory can be applied other than retrospectively, and even then it often seems dubious. Having read a bit about it a while ago, I saw BIll Adlard's presentation at the MI seminar when he prefaced many of his slides with the words 'as you can clearly see' or similar. In subsequent discussion it emerged that I wasn't the only one that couldn't.

I simply don't see how it can be relied on as a predictive tool anymore than any form of conventional TA can. It reminds me of those aerial photos which the intelligence community say clearly show nuclear silos or whatever, when they seem to everyone else as if they could equally well show that the cameraman has photographed his own left boot.

Anyone, well most people, can be wise after the event. Post event wisdom seems to me to be the best EW theory offers.

Discuss !!!
 

stk1975

Newbie
1 0
My problem with EW is that if you ask two people to interpret the waves, they will definitely not agree on the form. Not only that, each individual will have doubts about his/her analysis.

Is there any easier way to do this? I have not giving up on theory yet, becuase the fundamental concept make more sense than any systems up there.
 

Bigbusiness

Experienced member
1,408 23
stk1975 said:
My problem with EW is that if you ask two people to interpret the waves, they will definitely not agree on the form. Not only that, each individual will have doubts about his/her analysis.

Is there any easier way to do this? I have not giving up on theory yet, because the fundamental concept make more sense than any systems up there.
Some people try to combine EW with Fibonacci/Gann time and price projections or Delta to improve the accuracy. I looked in to this but still found it highly subjective. There are better methods but people won't share something that works well. The best way is to work out your own methods.
 

SOCRATES

Veteren member
4,966 134
Bigbusiness said:
Some people try to combine EW with Fibonacci/Gann time and price projections or Delta to improve the accuracy. I looked in to this but still found it highly subjective. There are better methods but people won't share something that works well. The best way is to work out your own methods.
:LOL: Yes precisely.
 

lazydave

Newbie
6 0
EW Trading Breakdown

Trading using Elliott Waves boils down to:

Is the current market action impulsive or corrective? Usually easy to decide, do the waves overlap or not?

If it's corrective, what type of correction is it, zig-zag, flat, triangle, double or triple three etc, and based on that where will it likely end? Here it's useful to know that corrective waves are almost always at a shallower angle than the impulse wave they are correcting. So a 3 wave move opposite a prior impulse that is steeper than the impulse is probably only wave A (or W) of the correction. Fibonacci levels are also useful - a 62% or 78% retracement of an impulse is a good place to bet in the direction of the impulse with limited risk if you place a stop beyond the 100% retracement level. Also zig-zags often have a steep wave A and a shallower wave C, while flats are the opposite. Triangles are tricky because there's usually at least one complex wave, and what you think is wave C or D of an ABCDE is actually only wave A or B of C. Other more complex corrective waves are probably best avoided since it's easy to see a pattern that isn't there.

When a correction looks complete, the next move is an impulse in the opposite direction so it should work quickly in your favor if your analysis is correct. If it starts going your way a little but then quickly slows down this a good clue that things are not as they seem and you can bail out even before things get bad enough to hit your stop. If the correction keeps grinding on, stopping you out perhaps repeatedly, probably you are using too close a stop, and you should reduce your position size to allow a wider stop.

Of course this is all easy to say and hard to do :)
 

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