Those (few) of us who use it have given up trying to explain it to others. And besides, the most famous and outspoken Elliot Wave Evangelists tend to be wrong as often as they are right, despite their staid confidence. There are as many ways to count out a friggen chart as there are analysts. EW is very subjective. That said, I use it on practically every trade. It also ties directly into trend lines, momentum divergence, Dow theory, sentiment analysis, and market breadth. :eek: To learn more I suggest picking up _The Wave Principle_ by Prechter and Frost
+1 Recently somebody else talked about indicators that "stood the test of time.". I had to laugh. Whether something in TA "stands the test of time" has nothing to do with merit.
What's not really there? Price waves/oscillations/undulations? Price ebbs and flows. That much is visible.
"The Elliott Wave Principle, as popularly practiced, is not a legitimate theory, but a story, and a compelling one that is eloquently told by Robert Prechter. The account is especially persuasive because EWP has the seemingly remarkable ability to fit any segment of market history down to its most minute fluctuations. I contend this is made possible by the method's loosely defined rules and the ability to postulate a large number of nested waves of varying magnitude. This gives the Elliott analyst the same freedom and flexibility that allowed pre-Copernican astronomers to explain all observed planet movements even though their underlying theory of an Earth-centered universe was wrong." --- David Aronson, Evidence-Based Technical Analysis, page 61
An excellent quote from Prechter in the post above. I have found the best way to handle an enthusiastic Elliottician is to ask them to stop showing the fully developed and almost always textbook perfect waves transposed onto past price action and how they would have traded it and instead show you a wave 1 developing right now in real time and how they're trading it or going to trade it.
Absolutely. And that's what you trade, just what you say you see and what everyone else sees too. There are no hidden cycles, waves or magic numbers. You can fit Elliott Waves to as many price formations as you can any other artificial technical construct, model or abstraction. The problem is, those price formations you can't fit them to outnumber those you can by many orders of magnitude. You need to be stripping away everything that isn't the bare price action, just as you suggest.
That was the hardest thing to work out - how to trade a wave count. Some waves are very low risk and otherz are almost suicidal