I made a lot in 98 with EW. lost it all during the bounce that followed, following pretcehrs advice. Still have it if anyone wants to see it. That was the first time I lost all my money.... since then, learned that using the wave makes you biased, so I no longer use the wave and have become successful in a weak market. Just my experience with the wave..........
I know this is suicide to get in here with so many opinionated experts. However I do not trade at all without checking the EW. I also do not daytrade or very short term unless the move is massive or immediate. There are only about eight times on the waves up and down when the odds of being right jump up well over 50/50. At these time the odds get up to 75-80% if you put on 4 trades in the same place on the wave then 3 should work and 1 will not. There are several other indicators that are needed to confirm the EW view and they all need to line up. I don't think you could daytrade EW it would drive you nuts but for trends it is hard to beat. About the previous comment on 9/11, run a EW from July through August of 2001 and my EW shows the bottom of the wave 5 coming in on 9/22 on the DOW with the FIB level pretty well right on for the bottom. Looking at this kind of spooked me but it certainly reaffirmed my faith in the EW predicting for 2 months the time and level of the bottom
good distillation from Jonathan Matte www.defendercapital.com on how to use EW if you are determined to get something out of it: ========================== Stub page; I'm going to need to sit down and create some charts to explain this. Oh, okay, here it is in a few sentences. Buy the Elliott Wave book by Prechter and Frost. Throw away 90% of it, leaving in place the part that says, "Markets go in the primary trend direction in five waves (e.g. "up-down-up-down-up"), and retrace against the trend in threes (e.g. "down-up-down"). Then, find a market with a noticeable top or bottom in the timeframe you want to trade. Figure out the primary direction. Count waves by hand. Look for a promising retrace prior to primary wave 3 or 5, and trade it. Like I said, I need some charts and time to explain myself. Try again here late September... of 2003, probably... ==========================
Why do'nt all you guys who have faith in EW treat us to an analysis of where we are in terms of the various waves and where we can expect to go next ? Otherwise I'm going back to Madame Rose and her trusty crystal ball..............last week she said the markets going up but beware the full moon!
Using the DOW wave 5 of the current 5 waves down is probably in. The ending FIB time extension is to be in by 10/22. The low predicted was DOW 6900-7100 and intraday it came very close. We are now in an A wave off that bottom, this should top sometime soon and then retrace to about 7750. If 7750 holds and we start to climb again we are then in a high probability strong uptrend. You would be foolish to try to predict the next move on any given day with EW as it is a trend indicator and needs other studies to confirm the strength of the trend.
Unfortunately, with the "probably" and the "very close" and the "should" and the "about" and so forth, this has very little utility for a trader. Regardless of the direction of the trend, you set your stop in whatever is the most advantageous place for you. When you're stopped out, you then decide whether you're going to reverse or make a continuation entry, then set your stop again. That's pretty much all there is to it. --Db
Exactly. What I am trying to say that at this point the EW is very ambiguous and isn't indicationg any trading trend. So it is somewhat useless at this point other than to say don't trend trade which to me has some value. However when the A wave in in and the B holds at 7750 and we start back up then we will have a trading trend with 75%+ probability. With EW you have to wait for it to set up not try to force it to forcast when it isn't wanting to.
I'm afraid I still don't see the point. Why depend on the EW at all? Either you're making higher highs and higher lows, or you're making lower lows and lower highs. You're only trendless if neither of these conditions exist. The only reason I can think of for getting into EW would be if you were going to invest a great deal of money and go to sleep for ten years. Otherwise, you're just adding another level of complexity which also happens to be completely unnecessary. --Db
Thanks for straightening me out. That is one of the reasons I was reluctant to post and you settled it in my mind never again. I'll now drop what has been working in the commodities for me for 20 years and switch to whatever you recommend.