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2012trader

Do You Use The Elliott Wave To Trade?

By 2012trader, in Technical Analysis

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SIUYA    11

SIUYA
Posted
Hi Siuya,

 

What do you mean by "value bet" in this context?

 

 

(one reason I dont really like poker jargon (analogies fine) in trading :2c:)

 

A value bet in trading for me is in the context of what the market is doing (people talk about the flow, the mood, the pattern etc) and then how best to react to it. The value is in knowing how to play it in the context of the pattern you recognise it as. (The word value has a few meanings as well - value of the context, value of the pattern, value of the pattern in the context, value of the strategy to apply given the context and the pattern)

 

We look at patterns for a reason - they are meant to work in a particular way. If they dont then what else will/can they do....and then you can play to where the value is in that pattern as it plays out.

There is more than one way to play something, and the flexibility to go either way, or the ability to play only to your strengths is important.

 

so what I mean in this example is that - if you think this is a possible 5 wave move in the EURUSD that has been slowly grinding up, there are a number of ways to play it - I stated a few. ie; if you think this pattern is genuine, and valid, then where is the value in the pattern.

- if you are bearish, then you go with the move down, but recognise that a tight stop has more value at this stage than a loose one....why, because markets do react, and so at this stage it might collapse but its more likely to react violently.

- if so you can choose to either try and pick the bottom - wave equality, first reaction, three line break, whatever.

- if not you can ride it.

 

However if your strengths are in going long, or your naturally bullish, or still bullish for what ever reasons, then you best bet (value) is in picking the bottom as a long.....as the pattern implies the end of a reactionary move in a grinding up trend.

 

So you can get lots of value out of it either way.....point is as often said here that things are strategy/system dependent and that various patterns have various ways of playing them and the value is how to do it.....regardless of which (long or short) is right and works out. Think of the best case scenario - short, buy it near the bottom, reverse and go long....now that's trading!

 

(I hope that makes sense)

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zdo    20

zdo
Posted (edited)

I’m awful (but I’m not as bad as they say I am), but I won’t disrespect you and call you an anal-yst ;)

I see and know what you’re saying and I won’t really try to convince you. The whole business of wave phenomena has a better explanation, imo, in Summation of Cycles anyways. But for other readers who may be exploring serious EW – if you’re really going to get into EW, build a construct grounded in the principle that if it’s not impulsing it is correcting … and in that context, price always DOES get the memo … and that EVERY corrective wave does have a logical count … comprehensive coverage (without "silly X's and Y's and who knows what else" ) is accomplished by adding a few more ‘patterns' to your repertoire ( ie make sure you fully understand Neely )

 

Example: To “ If a five wave EW pattern has a wave 4 that overlaps wave 1 slightly is it not a 5 wave EW pattern. The unbending rule followers say no it is not. “ I would respond – as true impulse is so rare, if a 3rd wave hasn’t cleared 1 enough to make any overlapping a very tiny possibility, an alternative corrective count is always indicated / advised anyway. With the overlap it likely still IS a correction, not a bull or bear impulse. The ‘time’ spent in clear impulse is minimal. ‘Time’ spent in ‘obvious’ 3 wave corrections is also minimal. Combined those ‘logical” / pretty / easy 5’s and 3’s, make up far, far less than 50% of the action. To master EW, the real work is knowing where you are in each (usually complex) correction (and that "it" is actually present 100% of the time …)

 

...

… Assume discontinuity... ie avoid settling and assuming continuity!

“The way of the Tao is reversal“ L. Tzu...

 

...again, my posts herein are for those who might be considering seriously studying EW - not for those who have been curious and have formed some impressions ... and not for those who occasionally see a wave ;) - not that there's anything wrong with occasionally 'seeing' a count...:rofl:

Edited by zdo

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karoshiman    10

karoshiman
Posted

 

...

 

... my posts herein are for those who might be considering seriously studying EW - not for those who have been curious and have formed some impressions ...

 

 

 

Sorry, zdo, I keep my mouth shut! :)

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gosu    10

gosu
Posted

I've studied EW for years and have a nice collection of books, software, newsletters, and a thick binder of personal notes. My conclusion up to this point: there is never a need to count past 3.

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zdo    20

zdo
Posted

Ever do any broceanography?

Counting waves to scarf the big rhinos? Avoid close outs? Predict an A-frame?

11ths and 17ths … sometimes… sometimes not

ie works for a few sets then doesn’t…

 

frankfx, I would make sure your friend's failure was attributable to EW itself...

there's a huge difference btwn knowing EW and being able to successfully trade EW...

one of the best utilizations of the theory is in measuring and setting risk... don't know his particulars, but it sounds like he didn't get that part

 

not that knowing isn't important though...

In fact, most standardized, simple EW is so incomplete it is dangerous... I've never seen an EW artist thrive who wasn't way up on top of bifurcation... an aspect of the process most 'knowledgable', practiced, time spent studying EW'ers have never considered or even heard about ... and won't read about in most books or articles on the subject either...

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zdo    20

zdo
Posted

Mit,

 

In replying to my posts, I hope you are just trying to save ppl from the elliotwave with these posts. No need to be very concerned though... TL is no place for budding Elliotticians… they wouldn’t bother…However, it is the very nadir-ishness of EW herein that interests me…

 

Here’s a little bit of perception management review on how I see EW.

Trading Chaos by Bill Williams - Page 2

"Then one day it hit me – there is not one Elliott Wave pattern (and how it unfolds for real instead of the way it’s ‘supposed’ to) that can not be fully comprehended via the Summation of Cycles principle…" zdo

 

I keep posting ‘about’ it now for weird reasons. It was an Elliotician who correctly gave me a studied opinion in Feb 99 that the most likely outcome was a long sideways correction in index prices, and that in dollar adjusted terms it would be a more serious correction, that it would entail increasing institutional (funds, hft, ‘professionals’ ) influence (with accompanying decreasing ‘public’ participation)... and less and less interest in EW's ?? Fortunately, I ‘resonated’ with his projection and that was a catalyst in much adaptation and development in my trading – not going deeper into EW btw, but diversifying into methods to exploit corrections and congestions .

 

“That which is unsustainable WILL collapse” period.

… same person also advised me that circa 2013 was likely another ‘sea change’ time in the big (not all elliott) waves in the sky…. for a time, more ‘crowds’ in more time frames would look elliotty again – for a time, impulse waves would be clearly impulse waves… So, it’s not really about ElliottWaves per se… an ElliottWaver was just the catalyst. I’m just preparing to make major adaptations again in my trading … hopefully, I’ll stay nimble enough…

 

EW is a social study – and notice I didn’t use the ‘social science’ term. If I were to use it, I would never drop below a day time frame and even that fast would probably be a mistake. (but ironically, for anyone who is interested, EW has less hook up with phi harmonics on the longer timeframes than it does (episodically) on the short time frames – go figure :) )

 

 

 

…

 

It still appears that the market did not care about the triangle and dropped when something it did care about happened.

Now he is saying he expects 5 waves down now that this pullback is underway and that we have only had 3.Not sure why he has that bias.Since the main trend is up i would have thought that 3 waves counter trend would be more likely

“Then one day it hit me – there is not one Elliott Wave pattern (and how it unfolds for real instead of the way it’s ‘supposed’ to) that can not be fully comprehended via the Summation of Cycles principle… “ zdo

...in several of my systems, if a setup occurs I’m getting in period – even if price is ANYTHING but confirming it

 

 

in general,EW's.always appear to be bearish in far greater numbers rather than neutral or bullish....or is that just me?
Must be you. ;)

.. in the big picture I described above we are in a long bear correction… don’t know for sure, but maybe even logically, there would be more neutral or bearish formations forming in such an environment… yet... perception is worse than reality most of the time and

perception is leaky in any case... so...

 

 

 

….

 

yep, it must be you. ;) …otherwise I would have to be surprised there’s no Beyond Elliott thread by Mitzu ever?

but sadly no widening the horizons here

just closure, shutting down… and digs

 

Since the main trend is up

??? wtf mit

Again, more shutting down, instead of going ‘beyond’. ;)

See http://www.traderslaboratory.com/forums/technical-analysis/12423-beyond-taylor-45.html#post161924

Please open us a Beyond Trend thread :rofl: ;) .

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zdo    20

zdo
Posted

The Real Crisis: "People Have Lost Trust In The Government And The Market" | ZeroHedge

I noted this because it reminded me of something my old EW teacher told me way back in the late nineties… while he was (very accurately, btw) projecting the decade + ‘correction’ that started ~ 2000 . He termed it something like “the stock markets will all be institutional by the end of it, the public will be out…”. I didn’t understand… (:haha:still don’t really :) ) … but

 

Good EW work = quality socionomics work.

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    • zdo
      ,,,just Sayin...

      By zdo · Posted

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