Elliot waves don't work eh ?

Elliot waves have got the worst reputation among all the TA methodologies. The truth is all TA methodologies are probabilistic and they have their hits and misses. But e-waves get all the bad rap. Why is that ?

1) Ellitiocians do a lot of hindsight labelling - Fair enough.

2) Ellioticians use alternate count (even worse multiple alternates), which is bogus - Fair enough

3) Ellioticians try "N" number of times before they get the turns right - Fair enough

4) Every ellitocian has a different count - In any game there's only one winner. So all of them cannot get it right by definition

5) Ellioticians keep changing their count and labeling and are not consistent - Well, if a count is promoted from a lower degree to higher degree in the direction of the prevailing move, then it's perfectly fine, as it does not alter the trend nor does it affect one's trading profitability. If one changes the label after-the-fact i.e after a move has proven one's call or count wrong, then the elliotician should admit the count as wrong and explain the structural reasons for making the correction.


Well, i have practiced e-wave for about 8 years and believe e-wave as a methodology that works. I have found no other TA technique that gives a better perspective of the market than e-waves. It's takes no sweat or genius to criticize, that something does not work. But it does take a lot intellectual effort to prove or show something works. I have posted few hundreds of trades on this board to show that ST momentum trading works. I will take a break from posting trades and contribute some TA going forward. I will try to post the e-wave count for SPX going forward.

1) Without hindsight labelling
2) No alternate counts
3) Will try to nail the turns with about 70% accuracy (will be using momentum techniques in conjunction with e-waves to nail the turns.)
4) My count will be unique based on my own read of the waves, right or wrong (no stealing counts from the web )
5) Will admit when i am wrong, instead of changing the labels silently in the background, pretending as though i was right all along


Here's my count. All the labeling done so far can be considered as 20/20 hindsight. What matters is the counting going forward.

http://nav-ta.blogsp...ec-28-2010.html

Edited by NAV, 28 December 2010 - 08:23 AM.

Agree with everything you said Nav. Though we label a bit different we are on the same page. btw I am calling a top this morning 1256.50-1261 and I think I got a 95% probability it is so why not. I was also thinking about the "worry" in the market right now and it is that most are worried they will miss the next rally leg not that it will go down.

EW works as well as other TA. Your 70% figure is a good ballpark estimate that is comparable to other TA. Many different methods produce comparable results and consequently we each settle on an approach that is comfortable. The real differences are not between the results of different TA but between traders.

Some very good points and I am looking forward to watching the progress of your count, as so many ellioticians have fallen by the wayside in the face of QE and other interventions. I believe that EW now has little predictive value, however it is a good 'language' to describe what you think will happen next, based on other technicals. BTW my Primary count rhymes with yours:

Nav: Looks interesting. Here's my suggestion though: Why don't you enter a paper trade (with stop) here on the board based on your EWave count? This will make your exercise a little more realistic. It's one thing to label some waves, it's another to actually make a trade based on your labeling. Personally I don't know if "it" works or not. A better way to phrase it though may be that no one seems to be able to trade successfully with "it". IMHO. If you actually make a paper trade based on your Wave count I think your experiement will end up being unsuccessful. Remember, Fib tried to do this once too. Anyway, evidently based on your count we are in a wave 5. Based on that, are you waiting to make a trade, or what? Good luck with your experiment by the way. IT

Agree with everything you said Nav. Though we label a bit different we are on the same page.


btw I am calling a top this morning 1256.50-1261 and I think I got a 95% probability it is so why not.

I was also thinking about the "worry" in the market right now and it is that most are worried they will miss the next rally leg not that it will go down.

In fairness, this isn't the first top you've called either. And you evidently don't trade based on what you call. I have no problem with that, but a top called today needs to reflect the top you called before, right? And any call needs to reflect some type of method to recognize when it goes wrong in order to be realistic.

IT

Thank you again for sharing your STUFF with us. I am already on board with the new EW/MOM/NAV study.

people love to say they trade on it, it's part of the BS game but in fact most will trade succesfully on pattern recognition and not EW and most big wins will not come from EW, but either price patterns/indicators just some bs from me ;-)

Nav:

Looks interesting. Here's my suggestion though: Why don't you enter a paper trade (with stop) here on the board based on your EWave count? This will make your exercise a little more realistic. It's one thing to label some waves, it's another to actually make a trade based on your labeling.

Personally I don't know if "it" works or not. A better way to phrase it though may be that no one seems to be able to trade successfully with "it". IMHO. If you actually make a paper trade based on your Wave count I think your experiement will end up being unsuccessful. Remember, Fib tried to do this once too.

Anyway, evidently based on your count we are in a wave 5. Based on that, are you waiting to make a trade, or what?

Good luck with your experiment by the way.

IT

Indextrader,

I don't trade based on e-wave anymore and don't ride these waves all the way up (or down as the case maybe) in one trade, even when i catch the turn perfectly. I used to trade solely on e-wave prior to 2003. I gave it up, cuz i trade based on hourly charts and counting waves on a hourly chart level is too tedious and time consuming. I now have more simpler methods to trade. Why do i trade on hourly charts ? Cuz i can trade with a small stop that i am psychologically comfortable with.

The counts i will be posting will be on daily charts and weekly charts. Once i post a confirmed turn, the daily close can be used as the entry price (or the next day's open if one trades the next day open), and use the prior swing high/low as STOP. That is if you want to track the trade.

As for taking a trade here, based on e-wave, you need to wait for a confirmation that wave 5 is completed and a turn has indeed occurred. I will post a confirmation when that happens.

Edited by NAV, 28 December 2010 - 09:59 AM.

EW can work if an individual is patient and admit when you are wrong with a count. EW lets you know when you are wrong. I am sure most here have more experience using than I do. I have studied it and used it for the last couple of years and have had success. The way I really learned EW was to sit in front of a one minute chart of the SPX and predict moves. I could see soon if I was learning EW or just kidding myself. One has to wait for set ups when trading and there are times when you just can't decipher a count. That probably means that a current wave is not complete. Pattern trading using EW is also reliable. Look for triangles. You know you have a "b" or ""iv", then go from there. Using EW the BKX should not go above 52.70 right now. If it does I am wrong. BKX has the chance of getting into the 20's. Using EW AAPL has the chance of going to $200. Using EW I can make a count the SPX is going to 97. If this is going to happen the BKX cannot get above 52.70. Good luck. I love using EW. It has helped me catch most of the move from 2009. For now though I am trying to be bearish. I am not predicting the SPX going to 97 but I can make a count that it can.