You will only know after the fact. But knowing that those are the two possibilites already gives you a plan where you can implement that strategic vision regardless of how it plays out by tactically allocating funds. The key is not that you nescessarily know something you didn't know before - think about your statement above of uncertaintity, it boils down to the statement that the market is either going up or going down - but that you have objective targets that make one side or the other more likely as that statement of dual probable events unwinds in the market itself into a reality. That is HUGE for someone that knows how to trade. Then when one side or the other shows their hand, you can peel off the position that is less likely to occur. Note well that I say you peel of positions that are less likely to occur, implying two positions in the market at the same time, each that cater to both events. You will also have to decide if this is the tactical implementation of the strategic vision. That is my preference, but others may implement it differently - that gives us each our style. [As you achieve mastery and "unlimited" funds, style disappeears and then you attain a universal style, but that is way off topic.] The waves should be looked at in a similar way to the way that the wave function is seen in quantum mechanics - they are a hybrid of a physical reality, and as in quantum mechanics, they are also probability waves. What I am telling you is nowhere near classical EW, but it is the way I view markets in relation to EW. nitro
Thank you for your words of wisdom Nitro. Everything you said makes sense. With the way the market has been acting(Example: Divergences), with Nasdaq breaking key support, with the probability of EW, with that wall street saying "Sell in May and go away", with the this year being the presidential cycle, high flying stocks breaking down from what looks to me as fifth EW's, eh, I can keep going... Everything is just pointing to a correction. All that is needed is for the S&P to break the very trendline its sitting on right at this very moment, and the probability for a correction sky rockets even more. Since we're short-term oversold, it may not break it for another day or two. Then again, for some freakish reason it can reverse and give another rally (That's where money/risk management comes in if you're short.) I'm loving this game, I'm learning so much monitoring and paper trading this market. I can't wait to see what happens. I may not be handling with the true emotions of having your own money on the line, but this is all still very interesting, especially since I just discovered EWs... Anyways, I'm rambling. Thank you again Nitro!
I became a millionaire using elliott wave analysis. Of course I started with 2 million. There is some credence to elliott wave analysis, and I still use it to determine where the overall market is headed but there are just too many variances allowed to make it a viable trading platform. For example May 10th ended the 5th wave of the dow. We had a strong ABC correction that ended on June 14th. (easy to see and I did make good money on THAT c downward trend) Now we could have gotten a wave 1 move up, or we could have gotten another abc upward correction(which is what happened) but there was no way to KNOW THAT until after it happened. Now we should have a 5 wave downward movement but we could actually have another ABC correction from this short term bottom which would produce an entirely different result. There is money to be made with elliott when you locate the wave 3 trend, but to be perfectly honest I could spot that trend before I knew how to use elliott.
Very true. The BIG problem with EW is that it is incredibly subjective and even an extremely experienced Elliottician often winds-up confronted with a number of alternative wave counts. May 10th did in fact end a 5th wave in the SPX. Unfortunately, this wave was truncated and never even got close to fulfilling the Wave 5 = Wave 1 tenet of Equality. Besides, there was so little that was impulsive in nature to these rallies ( that frequently showed considerable wave "overlap" ) that one's use of Elliott at this juncture was of little to no value.
every "objective" count on this entire thread has been wrong wrong wrong wrong wrong..... then the posts just eventually stopped.....lol you go Prechter!
yeah, was wonderin' earlier what happened to the guy...he's still updatin' his website but his last post was 2months ago.