Elliott Wave theory - why does it work?
- Thread starter bvpraveen
- Start date
This is what prevents me from being totally dismissive of EW -for its (supposedly) fractal nature. But this is also what makes me most circumspect of its usability. 'Coz if those wave sequences occur in all timeframes, one being part of a larger higher sequence, then it all becomes very confusing indeed. For the sequences may range from a 20yr to a 2min sequence all evolving simultaneously. It becomes very difficult (if not impossible) to deduce ones exact position in this wide ranging, overlapping (chaotic, to be precise) scheme of wave sequences. Even if we stick just to our own timeframe, the interpretations of a daily chart trader will be unlikely to be the same as that of a 5min chart trader.
Also it does not take into account std deviations. The std dev of a wave may be interpreted to be a new wave (and the view may be different in different timeframes). This makes it all the more difficult to ascertain when one wave has terminated & a new one begun. The correct wavecount can only be determined on hindsight (well, maybe not always) thereby destroying any anticipatory power.
A backtesting model will have to determine not only the validity of 20 yr and/or 2 min wave sequences in isolation, but also whether those 2min sequences seamlessly integrate with the larger 20yr sequence (& all intervening timeframes). Now the problem here will be akin to that of measuring a coastline with different scales - one using a 1 mm scale will get very different results from one using a 1m scale. So i think even conventional backtesting models will have limited applicability here. This is also a pointer to the fact that we do not have an appropriate model for interpreting EW even if it were to be true.
Regards,
Kalyan.
Also it does not take into account std deviations. The std dev of a wave may be interpreted to be a new wave (and the view may be different in different timeframes). This makes it all the more difficult to ascertain when one wave has terminated & a new one begun. The correct wavecount can only be determined on hindsight (well, maybe not always) thereby destroying any anticipatory power.
A backtesting model will have to determine not only the validity of 20 yr and/or 2 min wave sequences in isolation, but also whether those 2min sequences seamlessly integrate with the larger 20yr sequence (& all intervening timeframes). Now the problem here will be akin to that of measuring a coastline with different scales - one using a 1 mm scale will get very different results from one using a 1m scale. So i think even conventional backtesting models will have limited applicability here. This is also a pointer to the fact that we do not have an appropriate model for interpreting EW even if it were to be true.
Regards,
Kalyan.
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What about the wavists who have ended up in the pits? It is only the surviving ones who will write the books. Recently, I read a book which quoted the story of the drowned worshippers. A person had painted a few people who were praying to the gods for saving them from the floods. The question he asked was, "what happened to those who prayed and drowned?". Certainly they cannot write their experiences being deep under water.
If a cancer paitent was asked to choose between a therapy (the results of which are known) or a particular form of ritual (proposed by the religious head promising a great deal) to save his life, why should he prefer the latter? What would you do in this current case?
If a cancer paitent was asked to choose between a therapy (the results of which are known) or a particular form of ritual (proposed by the religious head promising a great deal) to save his life, why should he prefer the latter? What would you do in this current case?
ok elliott is useless and loses money, it has many pitfalls, waves do not exist there is no evidence so on and so forth......an useless tool.
Out of 100 traders only 10 or may be even less trade on the basis of elliott and may be they all lose money but why the rest of traders (>90%) or so called technical analysts lose money and lose it consistantly till they are wiped out?? why?
If elliott fails why does divergences fail why does patterns fail . why ?
All this is useless discussion. What matters is which method is profitable to you and makes money for you ? stick with that and trade themarkets.
spiderman
Out of 100 traders only 10 or may be even less trade on the basis of elliott and may be they all lose money but why the rest of traders (>90%) or so called technical analysts lose money and lose it consistantly till they are wiped out?? why?
If elliott fails why does divergences fail why does patterns fail . why ?
All this is useless discussion. What matters is which method is profitable to you and makes money for you ? stick with that and trade themarkets.
spiderman
I don't know if I am eligible to comment on this but I guess the answer to this is that trading has little (or nothing) to do with indicators or patterns or divergences.
Regarding discussions being useless, I shall not agree with you. I'm 19 years old and a prime source of education (excluding a few books) for me in this field has come from reading posts by some elite boarders. What I have learnt in the last 6months (if I have learnt) or so far exceeds what I have learnt in my entire life (if I have learnt) which certainly wouldn't have been possible otherwise (this is something that is reflected in my trading, if I may attribute it)
Regarding discussions being useless, I shall not agree with you. I'm 19 years old and a prime source of education (excluding a few books) for me in this field has come from reading posts by some elite boarders. What I have learnt in the last 6months (if I have learnt) or so far exceeds what I have learnt in my entire life (if I have learnt) which certainly wouldn't have been possible otherwise (this is something that is reflected in my trading, if I may attribute it)
U
We all are on
Stultifera Navis (The Ship of Fools)
This is where we all are similar to sebastian :
"They moved on in gloomy silence for a while and Sebastian
found himself thinking wistfully about his hometown, the place
he’d lived for all of his seventeen years. He closed his eyes
for a moment and saw the big bustling market in the town
square, where prosperous merchants in their embroidered cloaks
loudly advertised their wares as the townspeople moved past
them. Suddenly a whole series of familiar images, smells and
tastes assailed Sebastian’s senses. He saw the richly
decorated textiles and carpets that hung from wooden frames
around the many stalls. He smelled the rich odours of the
cattle pens, where people came to barter for buffalopes and
equines(TRADERS !!). He tasted the delicious tang of the hot sherbet they
served in the cafs, and smelled the rich aroma of elvish
coffee emanating from the many restaurants that lined the
square . . .
Then he had a vivid recollection of his mother’s face on
the day he’d finally left home – her red-rimmed eyes, her
brave, forlorn attempt at a smile. Sitting up on the seat of
the caravan, he’d called down to her that he’d be back just as
soon as he’d made his fortune, that all her troubles would be
over . . . but neither of them had really believed it....
Personally fully agree with CV's remark ,let us be in money making effort than being Right ,"Lets thank the Almighty for small mercies, it would have been difficult to make a buck otherwise."
Stultifera Navis (The Ship of Fools)
This is where we all are similar to sebastian :
"They moved on in gloomy silence for a while and Sebastian
found himself thinking wistfully about his hometown, the place
he’d lived for all of his seventeen years. He closed his eyes
for a moment and saw the big bustling market in the town
square, where prosperous merchants in their embroidered cloaks
loudly advertised their wares as the townspeople moved past
them. Suddenly a whole series of familiar images, smells and
tastes assailed Sebastian’s senses. He saw the richly
decorated textiles and carpets that hung from wooden frames
around the many stalls. He smelled the rich odours of the
cattle pens, where people came to barter for buffalopes and
equines(TRADERS !!). He tasted the delicious tang of the hot sherbet they
served in the cafs, and smelled the rich aroma of elvish
coffee emanating from the many restaurants that lined the
square . . .
Then he had a vivid recollection of his mother’s face on
the day he’d finally left home – her red-rimmed eyes, her
brave, forlorn attempt at a smile. Sitting up on the seat of
the caravan, he’d called down to her that he’d be back just as
soon as he’d made his fortune, that all her troubles would be
over . . . but neither of them had really believed it....
Personally fully agree with CV's remark ,let us be in money making effort than being Right ,"Lets thank the Almighty for small mercies, it would have been difficult to make a buck otherwise."
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