The First write up in that thread
What is Elliott Wave Theory & how do I use it ?
Any investor or trader using Elliott Wave Theory or any software or trading platform for Elliott Wave ?
How does it work/perform compared to technical analysis and technical analysis indicators?
Would appreciate some feedback.
Thanks
Re: Elliott Wave Theory
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The reply to it
Elliott Wave Theory
Quote:
Elliott Wave is a technical indicator that purports to offer buy and sell signals.
It appeals to the silly notion held by many investors that repeating wave patterns exist and counting them will make you money.
Elliott Wave systems and software make statements like:
You can have mathematical models generate objective and precise wave counts.
You can compare current markets with historical patterns to generate Elliott Wave counts.
You can receive price projections showing the most likely price range that a wave will reach.
The Claim: You count the waves. Then once you have the waves counted you will be able to pick when to buy and sell stocks and futures.
The Truth: Basing your trading off subjective patterns has proven time and time again useless. You can find a pattern in anything if you stare at it long enough. Also, projecting a price into the future is baloney.
Elliott Wave might hold some academic interest, but in terms of a trading approach --
This was a super post by traderj-----
Market price movement is highly random with a trend component.
Unsuccessful and frustrated traders want to believe there is an order to the markets. They think prices move in systematic ways (Elliott Waves) that are highly disguised. They want to believe they can somehow acquire the "secret" to the price system that will give them an advantage. They think successful trading will result from highly effective methods of predicting future price direction. They have been falling for sureshot methods and systems since the beginning of civilization (or when markets started trading).
Those who try to anticipate changes in trend rather than follow establish trends are doomed to failure.
Frustrated traders are constantly looking for some secret that successful traders use to make money. The only secret is that there is no secret.
The truth is that the markets are not predictable except in the most general way. Luckily, successful trading does not require effective prediction mechanisms. Successful trading involves following trends in whatever time frame you choose. The trend is your edge. If you follow trends with proper money management methods and good market selection, you will make money in the long run. Good market selection refers to selecting good trending markets generally rather than selecting a particular situation likely to result in an immediate trend.
There are two related problems for most traders. The first is following a good method with enough consistency to have a statistical edge. The second is following the method long enough for the edge to manifest itself.
__________________
Best Wishes!
Traderji
And now see what arun writes
Exactly my sentiments Traderji!
When I started off in trading/investing I was convinced by a salesperson of a well known data service provider company to purchase Advances Get by giving me some BS on how the top traders and investors used this software.
I forked out 160K to purchase this software and tried UNSUCCESSFULLY to make any profits out of this for over 2 years. I lost money!!
I realized that the program changed its wave count every time a new price bar was added. Of course if anybody saw just that it looked very good but if you traded the system one would not know what to do. The only thing good about this software was is MOB levels.
After losing money heavily I followed my friends advise and subscribed to a trend trading newsletter from tradersedgeindia.com (about 6 months back). Subscribing to this newsletter has changed my life. I have now recovered my past losses and hopefully should be in the GREEN once again.
I use the trend trading newsletter and also the swing trading newsletter with great discipline. One thing good about this newsletter is that they give you proper money mangement rules that has helped improve my trading confidence.
I love their swing trading newsletter. Which gives short term trades. I devote 60% of my capital to Trend trading and 40% to swing trading.
I was a frustrated trader looking for some secret to make money in the markets, but now I know better...
And see the beautiful explanation by Rahi
Hello Friends,
I read articles from different traders on Elliott Wave and that forced me also to write something as I am a follower of Elliott Wave Principles and also Advanced Get.
To my surprise, how can one say that something is bad. Just because he or she failed? Someone who make these indicators are not fool and they proved it.
About Elliott Wave : Elliott wave principles are based on the same principle as technical analysis. As per Elliott Wave, market repeat itself again and again and in a same similar 8 wave patter. 1st wave - Up, 2nd wave down, 3rd wave again up, 4th wave down, 5th wave up and that ends of a rally. 6th wave or 1st bearish wave down, 7th wave up and last 8 wave down and that complete downward cycle also. In total these 8th waves complete the entire cycle of Bullish and Bearish Market.
The problem is with Elliott is counting of waves. I read the best Elliott Waves analyser's column also, he also did mistakes few times, so being a novice analyst, we are suppose to do the mistakes.
What Advanced Get can do: Advanced get is the best software available for analysing Waves. I saw the article, Mr. Arun invested heavily in Advanced Get and than also he lost. Poor Fellow It's not a fault of Advanced Get, it must be the mistake of Arun. Softwares are not Holy Grail. One have to learn Software before using it. In Advanced Get's help section, they have clearely mentioned 2 techniques to invest based on Advanced Get.
Secondly, as per Elliott wave principles, 3rd wave is the longest and very powerful wave. So, it's very simple rule, when advanced get will give any scrip 2nd wave, than start ready for 3rd wave, once 2nd wave is over, do your own analysis, study some of the other indicators like preferably MACD, Stochastics and/or Moving Average Cross Overs.
I give you one example, just open the weekly chart of BSE. And you will be surprise to see that how beautifully Elliott Wave Analysis are there. Wave 1,2,3 & 4 is very clear. Now market is coming up, which is a clear mark of 5th and the last wave. I analyse this situation before 2 months and since than market is keep coming up. Look for the other principles of Elliott Wave.
As per Elliott Wave, in the 5th wave, usually one will not find blue chip scrip moving fast. Instead of Blue chip scrips, other stocks will move fast. Blue chips scrips will move in random. Even though market will be coming up, there will be an atmosphere of uncertainty. Just check it out urself what is going on presently in our stock market.
At last, I would like to adviced to my trader friends, to concentrate on the Art of Technical Analysis. Technical Analysis certainly helps. It helped others and it will help you too, you just have to learn the art of technical analysis and should know in-depth a good technical analysis software. That's it
Thanks
Rahi.
Which makes Traderji write the following lines
Good write up rahi!
I guess every individual is different and what may work for one man could just not work for the other.
Why don't you post a chart of your analysis using a screen capture utility? I am sure all of us would appreciate it very much.
Also why don't you write a daily/weekly analysis of the markets here using the Elliott Wave Theory.
__________________
Best Wishes!
Traderji
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