2012-05-05
FA vs Elliott Wave
03/25/2012 -
I strongly agree with you that the best and easist trades are on the wave-3. About the question how I "take the corrective wave counts", I start from the highest possible degree of timeframe (e.g., montly chart) to analyze and then scale down to the tradeable timeframe (e.g., daily chart). Therefore, sometime a corrective wave in a monthly chart still has some impulsive wave in the daily chart which we can make money from. :)
Quote from Wide Tailz:Wide Tailz - Thanks for commenting. Believe it or not, I don't give a shxt on any fundamental analysis. Ironically, I used to be doing and writting a lot of fundamental analysis, and I knew that it was just like writing some stories because people wanted to read stories.
For similar reasons, I have a lot against fundamental analysis. EW fits into my trend following system by filtering the buy signals by wave type. My be$t trades, by far, have been during a third wave (either the general market or the stock itself). Wave 3 is the first higher low and breaks the previous trend line, and typically follows noticeable divergence in MACD, RSI, money flow, Stochastics, ROC, and any other momentum indicator. A huge candle as the dam breaks is the final confirmation. OP: my comment for your analysis is that I'm amazed how far you take the corrective wave counts. I've never had much success trying to analyze them. I see the SP500 currently in a B wave completing the C wave of next lower degree, itself seeing wave 5 of next lower degree completing as I type..... :D
I strongly agree with you that the best and easist trades are on the wave-3. About the question how I "take the corrective wave counts", I start from the highest possible degree of timeframe (e.g., montly chart) to analyze and then scale down to the tradeable timeframe (e.g., daily chart). Therefore, sometime a corrective wave in a monthly chart still has some impulsive wave in the daily chart which we can make money from. :)
System Trading vs Elliott Wave
03/24/2012 -
bwolinsky - I have extensively played system long time ago, I wrote tons of systems with TradeStation, I did backtesting 24x7, and then I threw all my systems to trash can. What I want to tell you about backtest is ... been there and done that. If you are asking some trader who utilizes price action and/or pattern methodologies (e.g., Gann, Elliott Wave, Dow Theory etc.) about back testing, you ask a wrong question!
I post my wave analysis here not looking for followers. I am looking for people who speak the same langauage (are also playing EW) for discussion. I am looking for people who enjoy playing EW on trading like playing chess. If you don't believe in EW, you won't be interested in reading my posts.
Quote from bwolinsky:
What has your backtest showed and what have your results been? It's apparent some logic's went into the chart drawings, but none placed on any performance summaries or analysis of the data. Reminds me of Hershyites, must draw straight lines, without questioning whether they actually did go to where they ended when they were drawn or any regard to what actually happened later. This thread is missing that analysis, and it's required if you expect anyone to really analyze the charts that have been posted.
bwolinsky - I have extensively played system long time ago, I wrote tons of systems with TradeStation, I did backtesting 24x7, and then I threw all my systems to trash can. What I want to tell you about backtest is ... been there and done that. If you are asking some trader who utilizes price action and/or pattern methodologies (e.g., Gann, Elliott Wave, Dow Theory etc.) about back testing, you ask a wrong question!
I post my wave analysis here not looking for followers. I am looking for people who speak the same langauage (are also playing EW) for discussion. I am looking for people who enjoy playing EW on trading like playing chess. If you don't believe in EW, you won't be interested in reading my posts.
See the Big Picture (大局觀)
03/15/2012 -
No matter what approach one is using (TA, FA, ...), to become a successful trader, s/he needs to have the trading style like a military general (大將之風). Let's talk about what the 大將之風 is. IMO, 大將之風 is all about being calm (穩). Even if a mountain collapses in front of you, you got to stay calm (泰山崩於前而面不改色).
A person with 大將之風 has very stable mental state. S/he won't jump around because of some small market move. S/he won't go extremely happy, sad, mad because of the profit or loss of a trade. Everything is just the same old game, and everything is expected. That kind of mentality is 大將之風.
One with 大將之風 needs to be able to see the big picture (大局觀) and need to be 穩 - You won't be: extremely happy by the market's surge or sad because of a big down day - "一涨就是新高,一跌就是千里之外"
In other words, the big picture won't be changed by a small rally in the 5-minute chart.
Why does a real general/commander needs to have "大局觀"?
"大局觀" is to understand the whole big picture - which is the trend of the market.
"大局觀" is a clear market view (行情觀) about the trend.
Just ask a 3-year-old, s/he will tell you the market *is going* up or down. What I mean by *is going* is the trend. Don't trade against the trend!
No matter what approach one is using (TA, FA, ...), to become a successful trader, s/he needs to have the trading style like a military general (大將之風). Let's talk about what the 大將之風 is. IMO, 大將之風 is all about being calm (穩). Even if a mountain collapses in front of you, you got to stay calm (泰山崩於前而面不改色).
A person with 大將之風 has very stable mental state. S/he won't jump around because of some small market move. S/he won't go extremely happy, sad, mad because of the profit or loss of a trade. Everything is just the same old game, and everything is expected. That kind of mentality is 大將之風.
One with 大將之風 needs to be able to see the big picture (大局觀) and need to be 穩 - You won't be: extremely happy by the market's surge or sad because of a big down day - "一涨就是新高,一跌就是千里之外"
In other words, the big picture won't be changed by a small rally in the 5-minute chart.
Why does a real general/commander needs to have "大局觀"?
"大局觀" is to understand the whole big picture - which is the trend of the market.
"大局觀" is a clear market view (行情觀) about the trend.
Just ask a 3-year-old, s/he will tell you the market *is going* up or down. What I mean by *is going* is the trend. Don't trade against the trend!
Dice Works Better than Elliott Wave - A Conversation With a Friend
12/04/2011 -
iceman1 - Glad that you like the combination of purple and green. Elliot Wave analysis is very subjective so that different people could have different intepretations on a given chart, regardless the analysis needs to be based on some rules. Since it needs to be interpreted, the result of analysis cannot be guaranteed like a scientific analysis as 1+1=2. And since the analysis is by people while majority people lose on trading, there is no surprise that "dice works better than elliot wave analysis."
I guess that you have read lots of EW predictions from the famous RP's publications. If so, I did the same thing too, but I stopped reading them and threw them all to recycle bin about 16 years ago. That is a good question about the implementation of my analysis. If I tell you the truth, you won't believe it. All my wave counts are just my 6th sense guessing. First, one needs to study RN's EW principle and remember his every single word, and then one needs to study charts by applying the principle. An example of how to trade with EW, please read the following wiki link:
http://en.wikipedia.org/wiki/Elliott_Wave_Principle
Good point! Very few people can trade solely by using EW ... at least I haven't seen one yet. I would guess that the famous RP has never traded with his EW analysis; otherwise, he would have been wiped out long time ago. EW is one of the hardest (if not the hardest) TA approaches to master. EW is the major tool that I use on trading. I trade on my preferred count (purple line). If the market goes against my prediction, the grey line takes over and becomes the preferred count. If both go wrong, I take a break. If one wants to trade EW, market selection is very important. It got to have good liquidity, and it got be widely traded. These are the only 4 markets that I trade now (after trading almost every commodity and currency in the world): EUR, SP, GC, JPY.
Good point again! Timing is much more important than getting a good price. Entering the market too early, one gets killed. Entering the market too late, one misses out a big move and that incurs some bigger risk. Remember ... trading with EW needs to be very cautious. There is nothing 100%, so you always need to have a back-up plan, which is the alternative wave count. If someone tells me that s/he is "sure which way market will move" and if the direction is in synch with my predition, I will take a look to see where I might be wrong. On the other hand, if someone's prediction is in the opposite direction as mine, I will be more confident about my own.
iceman1 - It will be nice to "travel the world on a motorcycle" like JR. I wish I could do that and retire earlier. Over the last 24 years (since 1987), I have got wiped out numerous times ... I cannot even remember how many times. Good thing now is that I have entered a stable state, so ... I am working on it. Hopefully, one day, before I become too old, I can pick up a pretty one and say, "are you willing to travel the world on a motorcycle with me?"
Quote from iceman1:
"...like the pretty purple color with the green; I have found dice work better than elliot wave analysis. ..."
iceman1 - Glad that you like the combination of purple and green. Elliot Wave analysis is very subjective so that different people could have different intepretations on a given chart, regardless the analysis needs to be based on some rules. Since it needs to be interpreted, the result of analysis cannot be guaranteed like a scientific analysis as 1+1=2. And since the analysis is by people while majority people lose on trading, there is no surprise that "dice works better than elliot wave analysis."
Quote from iceman1:
"... I am always curious when over the past 25 years I read all kinds of predictions, most of which never occur. Therefore, what exactly are you doing to implement your analysis?! How are you playing it ..."
I guess that you have read lots of EW predictions from the famous RP's publications. If so, I did the same thing too, but I stopped reading them and threw them all to recycle bin about 16 years ago. That is a good question about the implementation of my analysis. If I tell you the truth, you won't believe it. All my wave counts are just my 6th sense guessing. First, one needs to study RN's EW principle and remember his every single word, and then one needs to study charts by applying the principle. An example of how to trade with EW, please read the following wiki link:
http://en.wikipedia.org/wiki/Elliott_Wave_Principle
Quote from iceman1:
"... is this some academic exercise with nothing really being risked. Anyone can make an educated guess on the market outlook, but few can trade it well.
..."
Good point! Very few people can trade solely by using EW ... at least I haven't seen one yet. I would guess that the famous RP has never traded with his EW analysis; otherwise, he would have been wiped out long time ago. EW is one of the hardest (if not the hardest) TA approaches to master. EW is the major tool that I use on trading. I trade on my preferred count (purple line). If the market goes against my prediction, the grey line takes over and becomes the preferred count. If both go wrong, I take a break. If one wants to trade EW, market selection is very important. It got to have good liquidity, and it got be widely traded. These are the only 4 markets that I trade now (after trading almost every commodity and currency in the world): EUR, SP, GC, JPY.
Quote from iceman1:
"... After all timing is important, last I checked! Frankly I don't have a fricking clue as to what happens. Anyone who tells me they are sure which way market will move, is a fool or deranged. This market has baffled much smarter people than me and many others. ..."
Good point again! Timing is much more important than getting a good price. Entering the market too early, one gets killed. Entering the market too late, one misses out a big move and that incurs some bigger risk. Remember ... trading with EW needs to be very cautious. There is nothing 100%, so you always need to have a back-up plan, which is the alternative wave count. If someone tells me that s/he is "sure which way market will move" and if the direction is in synch with my predition, I will take a look to see where I might be wrong. On the other hand, if someone's prediction is in the opposite direction as mine, I will be more confident about my own.
Quote from iceman1:
"... Further if you had backed up the truck at least 4-5 times over the past 6 months (maybe more) in some stocks, ETFs and indexes, and nailed it, you could pretty much take the next couple years off and travel the world on a motorcycle. So who cares about wave count?! As I recall from my studies, elliot wave is not a science but subject to very broad interpretation as to count.
Oui?
regards,"
iceman1 - It will be nice to "travel the world on a motorcycle" like JR. I wish I could do that and retire earlier. Over the last 24 years (since 1987), I have got wiped out numerous times ... I cannot even remember how many times. Good thing now is that I have entered a stable state, so ... I am working on it. Hopefully, one day, before I become too old, I can pick up a pretty one and say, "are you willing to travel the world on a motorcycle with me?"
2012-05-04
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