Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

RichardCox

Essential Elliott Wave Patterns Pt. 1

Recommended Posts

SunTrader my prior post wasn't directed at you, we agree, sorry I didn't make it clear.

 

To all, succinctly stated a major issue with EW theory is that proponents do not appear to accept the concept of failure.

 

edited quote from tradingwizzard:

Elliott works only from a top-down analysis point of view.......what this means is that you are counting monthly, weekly, daily charts, and then pick your entries and SL on 4h and 1h charts...invalidation means something is wrong and have to do it again.....

 

regarding your post, Elliott is a summ of scenarios, and by the time one is invalidated, the one that stands still is the winning one...

 

This recognizes that a potential pattern failed to form in a certain timeframe, but since pattern never materialized it is not pattern failure, something else went wrong, caused

its misinterpretation. And since we can find a valid pattern, potentially in a future larger timeframe into eternity, pattern concept is valid. According to this concept 20ma's or double bottoms, for example, are infallible. A counterproductive trading concept. Do I understand this right?

 

The emphasize placed on EW infallibility just leads people astray. A trader must recognize a "potential pattern" or whatever "view" of the market they choose to employ failing to materialized in expected scenario, as others have noted, which is recognized in quote above.

 

I think a lot of the fuzz about EW boils down to a matter of approach. EW proposes its validity based on the possibility of an event, presumably into infinity. Where others approach patterns, etc, as the probability of an event within defined confines.

Share this post


Link to post
Share on other sites
I don't expect EW to work perfectly 100% of the time any more than some other market theory.That would be unrealistic.

My basic point is that i have seen how expectation bias can really sidetrack a trader/follower of other people's analysis./theory

 

Let me give a recent example.I am no fan/expert of EW but i believe studying waves is worthwhile since that is the basic format in which the market moves.So,there is a blog i have been following for years now and it's useful in many ways.One way is to get a general consensus of what type of 'crowd think' is going on at times of market uncertainty-inflection points.

 

Now the example.Having reached 1710 on SPX the analyst was anticipating a correction of 10% down to 1539.Why 10% and why at this point? Simply to do with waves of a certain degree ending (signal a reversal) and 10% would be in keeping to historical corrections when dealing with this wave degree.

 

So he anticipated an ABC from 1710-1630-1680-1530.SPX went to 1627,so he was correct on 2 things so far.A-that a correction was due and B-the first target.This guy is pretty good so it was no suprise he was right so far.Now SPX had to reach 1680 and not much further before making a C wave to the lower target.At this point most,not all,of his followers were anticipating good profits on the short side convinced the market was heading down soon.

Now one thing i gather about EW is that overlapping choppy waves tend to be of a corrective nature rather than impulsive- to me that is expectation bias (as if there isn't enough going on here already)

From 1627 up to 1665 all the waves look corrective.Haven't hit 1680 yet so this all looks corrective and the scenario looks on target.

However,from then on things start looking a bit more impulsive up to 1690.At this point a lot of nervous shorts are asking a lot of questions regarding alternative counts,not to mention a few sceptic bulls shaking their heads at the herd behaviour.Unfortunately for the shorts this analyst gives the market a lot of leeway before he rules out a count- he's a long term swing trader and as you can imagine,a lot of his followers are daytraders.

The count AND all alternatives would only be invalidated should the market make new highs-which it just did.

 

You'll notice in EW rules you'll often see the words "must" and "cannot" those are not my favourite words in trading.Rather than "cannot" you'll often find it can...oh boy it can.And if you tend to think a wave "must" you'll often find the market didn't get the memo.

 

The target for B wave was 1680.When the market passed that point alarm bells should have rung.But no.There were a mind boggling number of alternative counts that could conceivably maintain the bearish scenario.(mainly proposed by long term members of the blog most of whom have their own blogs)

 

This is not exactly "judge the market by it's own actions" This is expectation bias self inflicted due to abdicating responsibility for analysis in favour of a percieved expert or theory.And a lot of time and energy seems to be spent in carefully reloading the gun to continue shooting oneself in the foot.:)

 

But i guess once a smoker (EW'er) quits......oh you know.

 

Now i know some of you want a link to this blog in order to have a good old laugh and use it as your fade the crowd tool.But,as i said i rate this analyst quite high,and believe me,if you don't know me that well here,that is high praise indeed.And as i haven't shown things in a particularly favourable light then i think it would be a little unfair to link it here.

 

My advice..treat the market like a lying,recividist criminal in custody."Now,let's go over that story one more time and compare it to the evidence i'm seeing here..."

 

hey mits,

 

negative interpretation of what Elliott really means......in this way I can paint a negative picture on any trading strategy is I were to outline only the drawdowns........try to balance it a bit and you will see it's not that bad actually

 

TW

Share this post


Link to post
Share on other sites
And what does Elliott wave "really mean"?

As for balancing it "a bit"

 

...I balanced it exactly as required since I related the story exactly as it unfolded.And the story,after several years watching that blog on a daily basis,is completely typical- groundhog day.

 

it depends who's posting

TW

Share this post


Link to post
Share on other sites
Wiz,the question was what does Elliott Wave "really mean" ?

Answer will "depend on who is posting"..but I was asking you since it was you that made the statement.

Care to take a stab at it? Scalpel or butcher's knife..your choice.

 

ok, ok....

 

Like mentioned many times I trade mainly based on Elliott waves counts I keep on all currency pairs as I am a currency trader. Don't ask me why only currencies, I guess I like volatility there and the fact that the market is active all the time......so probably me and market are alike from that point of view.

 

Saying mainly Elliott waves as sometimes I use correlations if for example I am bearish on eurusd and the eurgbp cross is consolidating (in a contracting triangle for example) then I will just go short gbpusd without even taking a look at a chart........a cross like the eurgbp here is the key in trading the majors.....and there is a cross for every majors out there so knowing two variables out of three gives you a competitive advantage ahead of the markets

 

Coming back to Elliott I read on the subject in time almost everything what has been published, including the guys biography and my conclusion is that Elliott is the perfect sum of human behavior........if markets are a sum of human behaviors than this theory relate to it the most......it is confusing (aren't we all?), complex (aren't we all?), having tricky patterns that may or may not work (aren't we the same in all that we do?)....but out of all this confusion there are some things I found of extreme value....some basic stuff that I use and that guide me and this is what I trade:

 

1. patterns - especially triangles, (contracting mostly)....I love triangles and since price is spending most of the time in consolidation patterns they are extremely common......Elliott described some fairly good rules regarding triangles so understanding those will give you an advantage ahead of any possible triangle.....after the b wave one can trade it pretty nicely and depending on the time frame, scalping or even swing it

 

2. extension - if an impulsive move needs one wave >161.8% then this is what I am looking for........having that, searching for corrections in between and projecting outcome

 

3. top down analysis - I always start from the monthly chart below....if there's a contracting triangle on the weekly chart, then I will look only for abc's on the daily and 4h and of a sub degree wave I will look for impulsive moves ,etc.

 

What I am trying to say is, like any thing you do, if you are not doing it properly then you might just quit....of course it is confusing and looks like 1000 possibilities all the time...but this comes only out of lack of knowledge.......many want to be traders without doing the work...well, this is not possible....study, work hard, and it will come

 

TW

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
    • Does any crypto exchanges get banned in your country? How's about other as Bybit, Kraken, MEXC, OKX?
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.