Elliot Wave

Discussion in 'Technical Analysis' started by trade4me, Jul 29, 2002.

  1. trade4me


    Does anyone trade using elliot wave theory? I've read some material on it, and know the basics, but fall way short on using it to trade successfully. I would appreciate some input on it.


  2. It will make you go nuts
  3. :D
  4. tntneo

    tntneo Moderator

    yes it will.. make you go nuts.
    Very few traders make money. but even fewer are using EW for that !
    The most common complaint about it : it's subjective, 2 traders will see 2 different things looking at the same chart.

    It makes it almost impossible to trade from it. I do know a succesful EW trader though. So it's possible.

    There is BIG value in EW though. It is often overlooked because we tend to look for a trading plan and EW will never be that.
    EW gives you a pretty good idea of what can't be (as opposed to what will be). Knowing something can't be what you think is often as important than knowing what will be.

    For instance, in a clear downtrend, it's very easy to spot the continuation patterns.. and continuation means the trend is not over.
    That's why I never thought we found a bottom when lundy was calling one.
    You can do the same with the trend component of dow theory. However EW goes further and can help you detect fake uptrend starting (and you actually short them).

    This is very valuable and makes EW an important contribution to technical analysis. As long as you don't look at it as a trading plan. My best picture for it is weather forecast :
    it tells you not to expect snow or to expect clouds. it's not 100% sure (far from it). So you can adapt your plan (bring an umbrella).

    Don't believe those who say EW is useless or does not work. It's not true. But you must use it for what it is worth and what it can do, not the hype, not the dream of it.
    Maybe the way to really understand it's positive effect on your account :
    I can't say I made money with it.
    But EW saved me a lot of money, avoiding losses. And that is the important part of trading. Getting some gains is not that hard, keeping them and not bleeding to death is the hard part.


    PS : still, if you are looking for the core component of your trading, you need something else.
    also, the shorter the timeframe, the more difficult EW is to use (because there is too much noise). And that's also a reason why it is dismissed by daytraders. Remember also it is a trend following system. And trend following is only one way to trade, and my personal opinion, it's not the best way to trade. but if one makes money that way, all the better, I am only saying there are many other and maybe easier ways.
  5. trade4me,

    Have you tried posting the same message in any one of those Yahoo eGroups devoted to Elliott Wave?


    Also, have you joined any of those Advanced GET Yahoo eGroups that talks about Elliott Wave?

    Here's one such forum at


    Thus, you won't find many current users of Elliott Wave here at EliteTrader. If their here and just lurking...hopefully someone will private message you.

    Good luck.

  6. trade4me


    I do believe in EW and I think its a good compliment to any other T/A system, but not as a stand alone. I've seen a daytrader in action who uses it but never really followed up on it. He's actually really profitable but his trading style is so contrarian that it kind of turned me off. If he believes a stock is in a 5th wave up, he'll keep shorting it and shorting it until it finally breaks. Not my style. I wonder why he doesn't he just ride the wave up as soon as he seen the 5th wave starting. Nevertheless I feel its a good to know to save from buying extended waves or getting out too early.

    I will check out those links,


  7. I have been learning more about elliot wave and fibonacci lately, and the one thing that I do see a lot of are the "abc down" patterns. A stock makes a large drop, then a shorter up move, then another large down move that is in proportion to the first down move. elliot wave and fibonacci are the only theories that I know that really describe this behavior.
  8. Hubert


    there are a couple of guys in the room that use dynamic trader they love it and have been doing well
  9. The secret to understanding Elliot's wave theory is in the following riddle.

    ps. this is extremely easy to solve unlike some of my other ones.

    slopes are for dopes
    waves are for surfers
    so ride waves not slopes
    be surfers not dopes

    the key to the riddle
    is the Elliot Wave
    not the Elliot Slope
    makes you an Elliot Wave artist
    or an Idiot Slope fartist

    if you solve the riddle
    the bear will have a new face
    this is what he'll look like
    just in case. :D
  10. lmao 2x... what's with you and riddles? i'm not aware of anyone figuring out ANY of your previous riddles! i'd like to ask you if you trade off this great strategy personally....and does it work? or is this just a concept???
    #10     Sep 9, 2002