Maybe we can share ideas and approaches and learn from each other? Always open to new techniques and analysis. tony
Yes! But it's such a screwey theory that I rarely use it anymore. It seemed to have worked *perfectly* in the 1984-1988 periods in the Dow. It worked well again in 1990-1992 and 1995-2000. In other years, the counts can get mangled in many different ways. That's not to say, it's completely useless but many times you're actually better off not even paying attention to it. Most 'practitioners' always disagree on just about every wave count, so what's the point of arguing about who is 'right' when/if it sometimes takes weeks or months to establish a proper count? I was a firm believer in the theory several years ago, but subsequently decided that it was useless to *make* money in the markets. Only good in hindsight. Try taking your hindsight or alternate counts to the bank! People who try to use EW have yet to figure out what trading is all about. It's not about 'predicting' with some theory and all the endless alternating counts. It's more about finding some edge and exploiting it to the 'nth degree.
Hi! I agree! In the 1980's to 1990's it worked perfectly in the Dow for me as well. You mentioned, by exclusion: 1988 - 1990, and 1993 - 1995 the counts got mangled? 1988 - 1990: as I recall the 1987 crash did not end the correction, it ended in December 1987. I imagine that threw many people off. 1993 - 1995: Definitely was tricky, as the impulse waves looked like threes instead of fives...agree? Yes, there seems to be a non-consensus as to how waves should be counted. I think there are two reasons: one; most have never done the historical reseach to prove or disprove the theory, and two; most try to bias the count to confirm their fundamental suspicions about the economy...these second ones fail to understand that all the fundamentals current/near future are already embedded in the waves. LOL, if hindsight could be deposited we'd all be rich. I feel EW is best used in intermediate and long term trends, not day trading. In a bull market, such as this, if one knows where we are in the cycle one knows what to expect ahead. Then, can manage risk accordingly. Do you agree? Exactly, EW will not make you a good trader, possibly quite the opposite. And thus, the reason for all the negative sentiment. What makes a good trader, is exactly what you stated: finding an edge (of your own) and applying it. I've never really traded the markets. Always bought near the end of corrective waves and sold near the end of impulse waves, (as best I could). For the past few years, the entire market place has been placed right at ones finger tips of their keyboard. Twenty four hour, international trading, right from your home computer, amazing! So there's plenty of liquidity! And thus, plenty of opportunity. May I ask for some advice? If I was to consider trading, where/what would you suggest I look into to first? I'd be most interested in trading the stock indices only.....tony
A person wanting to learn about how markets move can probably do worse than BEGIN by studying what's available under Elliott waves. Some useful concepts one can learn are, among other things: the existence of trends, fractals and trends, overlapping of trends, impulsive/corrective waves, looking at the markets using a holistic approach, volatility compressions leading to triangles, 3 legs as a basis of price movement. And I'm sure I'm failing to highlight some other good things. Among the books I've studied, two that come to mind that I thought were quite good at the time I was into Elliott waves are Balan's EWP Applied to Foreign Exchange Markets and Miner's Dynamic Trading. Both offer a "practice" point of view incorporating Fibonacci ratios along with wave counts, although if I were to classify their approaches they would go under the heading "Betting and Predicting." The ones that I thought were an utter waste of time and energy are the academic type of books tracing the history of Elliott waves and practitioners back to Elliott himself. There are several of these published by one company but I won't mention any titles. My present viewpoint for what it's worth is that doing wave counts gets in the way of making money. Discerning between fives and threes gets in the way of making money. Measuring out Fib retracements/extensions gets in the way of making money. What makes money is finding a personal sufficiency to decision making based upon how markets behave and executing flawlessly. I believe there are various and diverse ways to arrive at a personal sufficiency. One thing to avoid, however, is intellectual clutter, which definitely gets in the way of executing. To sum up: (1) As a methodology for building a personal sufficiency for decision making in trading, Elliott waves suck the big one. (2) As an introduction to gaining a general understanding of useful concepts about markets and price movement, studying Elliott waves could be useful. But stay clear of academic/historic treatments.
I didn't say those years got 'mangled'. Back in those years the Wall St Journal published the 'theoretical' daily highs and lows. When EW 'worked' in the years I mentioned, there was this almost *precision*, (to the tick, using the dow theoretical #'s). There were truly amazing relationships on a daily, weekly basis that mathematically seemed as if Elliott and Fibonacci were alive and commanding the Dow)! I spent 1000's of hours researching and came up with some amazing stuff. Things that are not published anywhere). Yes, there seems to be a non-consensus as to how waves should be counted. I think there are two reasons: one; most have never done the historical reseach to prove or disprove the theory, and two; most try to bias the count to confirm their fundamental suspicions about the economy...these second ones fail to understand that all the fundamentals current/near future are already embedded in the waves. LOL, if hindsight could be deposited we'd all be rich. I feel EW is best used in intermediate and long term trends, not day trading. In a bull market, such as this, if one knows where we are in the cycle one knows what to expect ahead. Then, can manage risk accordingly. Do you agree?[/QUOTE] No, I don't agree there. The reason you *think* it's best to trade it on an intermediate/long term basis is because you're essentially admitting that your ability on a short term basis is poor. And whatever *ability* you think you might have to interpret EW on an intermediate/long term basis is most likely a combination of luck and other factors influencing your direction of where the market will go. In fact, I don't think ANY GOOD EW student/practitioner can read the market with certainty at this time. Also, btw, the Dow 'theoretical' figures ceased to be published in the paper years ago. Only actual H/L now. Yes, I can calculate my own and have done so, but like I said, it really does not work as it used to. I don't know why. Exactly, EW will not make you a good trader, possibly quite the opposite. And thus, the reason for all the negative sentiment. What makes a good trader, is exactly what you stated: finding an edge (of your own) and applying it. I've never really traded the markets. Always bought near the end of corrective waves and sold near the end of impulse waves, (as best I could). For the past few years, the entire market place has been placed right at ones finger tips of their keyboard. Twenty four hour, international trading, right from your home computer, amazing! So there's plenty of liquidity! And thus, plenty of opportunity. May I ask for some advice? If I was to consider trading, where/what would you suggest I look into to first? I'd be most interested in trading the stock indices only.....tony [/QUOTE] My honest opinion is that the current mkt environment has to wash out many, many traders in order for a lot of stocks/indexes to be 'tradable' again. Personally, I don't trade any indexes. At least not on a regular basis. My view is that everything out there is designed to suck up YOUR money. Nowadays, in order to make a profit, one needs to think out of the box. I'll give you an idea...what if you could *design* your own index? What if you could have it perform, say 50% better than the market? What if you could design it without all the CHOP you get in most tradable garbage out there? Well, such indexes DO exist and it's where quite a lot of money is being made. But these things have to be ''engineered'' to work correctly and fine-tuned daily to work as designed. But that's 1 of the reasons some hedge funds out there continue to outperform. They hire PhD's and quants to design, test and trade such advanced 'systems'. And, no, Elliott Wave does NOT work in those indices!
Just a comment on the previous post. With regard to financial markets, if it moves and has liquidity, it can be traded. Period. My suggestion would be to also look for low transaction costs and the accurate and timely dissemination of data pertaining to the primary market variables. Markets exist to facilitate transactions between willing parties, some of whom participate for the purpose of gain. Although it may appear to be so for some participants, markets are not designed to suck up "YOUR" money. lol.
Hi EW, I am totally familar with, could most likely write a few intelligent books on the subject, but not in regard to day trading. Position trading for 4 - 8 weeks yes. "Some useful concepts one can learn are, among other things: the existence of trends, fractals and trends, overlapping of trends, impulsive/corrective waves, looking at the markets using a holistic approach, volatility compressions leading to triangles, 3 legs as a basis of price movement." Fractals, overlapping trends, an holistic approach and three leg price movement I am not familiar with. But, I will look into... thank you