Prechter and Elliott Wave

Discussion in 'Technical Analysis' started by FranklySpeaking, Jul 7, 2007.

  1. If Elliott wave doesn't work, how was Prechter able to with the 1984 Robbins trading championship with a record percentage? Was it just that he got lucky or that he was just a natural trader?
  2. Elliott Wave *used* to work on the Dow. Nowadays it rarely works. 15-20 years ago it worked in very precise, readable ways. It's not the case anymore.
  3. Prechter used to have an institutional following, charging upwards of $400 a month for an individual market. Now he charges less than $60 for essentially the same product. Elasticity of demand.
  4. World Cup Championship of Futures Trading® Top Overall Performance - All Divisions
    1984: Ralph Casazzone 264% ---

    "Prechter made an impressive showing in a 4-month trading championship in 1984 . . . "
    ". . . I saw Frost and Prechter being interviewed, and what amazed me was that these
    two guys who literally wrote the book on Elliott Wave Theory could not agree on the
    current wave structure, also known as the "count"."

    the original Frost/Prechter book published in 1979 was correct regarding the 87 forecast
    and Prechter gave a sell early in the decline, as did Marty Zweig on Rukeyser's tv show
    but even in the early 80s Prechter's calls were incorrect more often than not -- S&P
    Frost retired to Victoria, Canada and was buying gold mining stock prior to gold bottoming
    in the 90s -- EW analysis ? -- then in his 80s, Frost died a few years later
    A J Frost a Canadian started his career as a legal accountant. He served as Chairman of
    the National Capital Commission (Canada) for two years and has sat on the bench for
    Tax Appeal Board, Tax Review Board and Anti-Inflation Appeal Tribunal. In 1960 he
    became partner of the late Hamilton Bolton - Elliott's 'succesor' and owner of the
    'Bank Credit Analyst' Montreal, Canada, who introduced him to Elliott Wave Principle.
    Prechter's letters and phone-in service at their peak were of course pre-computers and
    the WWW, now 'everyone and their uncle' knows EW so the letters have less value

    both Tom Joseph - Advanced GET/DynamicTrends and Rober Miner - Dynamic Trader
    speak in terms of only being able to obtain a correct EW interpretation 50 % of the time
    I'd agree with that, but those 50 % times can result in very large profits, so
    when in doubt stay out

    EW does work so far as a theory of Price Movement goes but it's not a trading system
    there are several people on various forums posting realtime EW trades and some of them
    are very good, so I'd say EW does still work but it's user dependent

    I think Prechter's success has more to do with coming across Elliott's work and at first
    teaming with Frost who'd been using EW for years, then Prechter recognizing he's lousy
    at EW analysis employs others to do that work then realizing he'd be more successful
    as an author and marketing EW, 'letters', courses and books

    Prechter's been calling for the imminent collapse of society as we know it for decades

    several people state Glen Neely's EW analysis is better - more accurate than Prechter's
    for some comparisons see:
    but even Neely's tiring of his 'makes my head hurt' methods and moving to 'River Trading'
    which means:
    NO NEED for Wave Theory,
    NO NEED for sentiment figures
    NO NEED for oscillators or wave charts -- !!! -- amazing -- pay-to-learn fee is only $5900

    attached: Advanced GET's DJIA EW analysis
    • djia.png
      File size:
      15.9 KB
  5. Lucrum


    That's my guess. Although some people who win those contests are good, many do go "all in" and just get lucky.

    Someone on another board some years ago (who used EW himself) mentioned that he was under the impression Prechter did not trade. He made EW predictions and charged for subscriptions. And before any of his supporters start throwing tomatoes at me. I'm just quoting them, I don't know this for a fact.
  6. charttv


    Perhaps Prechter had several accounts that blew up and the one that hit the home run is the one that's remembered?

  7. if R. N. Elliott published “Nature's Law - The Secret of the Universe” for the first time this year would you really take that with even the slightest bit of seriousness from the title?
    Elliott wave just seems like a good way to confuse people and sell newsletters.
  8. maxpi


    I bought a Prechter book in 1996 that predicted "the great crash of all time" for 1995!! He was still selling the book, no problem with taking the public's money!! I was a newbie and it was a good lesson for me, losing $60 on a book like that........ Thanks Prechter, you taught me all I need to know about most investment advice :D
  9. FXO


    This is a big delusion. The Elliott Wave Principle worked in the past, works in the nowadays and will work in the future, and besides in any financial markets. I can easily prove it in practice.
    Besides is necessary to be able to use correctly wave principles in practice and very few traders are able to do it.
  10. Let's say we give the benefit of the doubt the the concept of Elliot Waves....

    1. Elliott made his observations when the market was dominated by many small account, individual investors managing their own money.... who wanted to make a profit, of course, but were also concerned about preserving capital.

    2. Today, the market is dominated by a relatively small number of big intuitional players... whose primary concern is to keep up with their peers.

    3. Today, the markets are "heavily fooled around with" by BS Bernanke and his ilk... not so in Elliott's time.

    Bottom line.... if Elliott's observations correlated with market behavior in his time, it's HIGHLY likely his work is completely invalid today.
    #10     Jul 11, 2007