Elliot Wave Principle

[Welshman]

Hi,

 

Wondered if any other members here use EW principle for charting the markets and to determine trading decisions. I consider myself a novice even after using it for a year . However I am beginning to see some positive results and wondered if others might be interested in sharing/discussing wave counts/strategies here?

If anyone is interested let me know.

 

I'm happy to share my counts and have attached my current view on GOLD from the 4HR chart

 

[Guest JoshM]

Not a big user of Elliott Wave, but we are certainly seeing some nice counts and fibonacci's. That symmetrical triangle is finally breaking out to the upside.

 

Here are the waves as I see them. I would have seen the 4th count at your point (a). Interesting to see how well the Fibonacci retracements are being respected (61.8% on wave 2 and 38.2% on wave 4). Could see this 5th wave move into $1300 (1.61 x Wave 1). However, with next big resistance at the January 2015 high of $1307, I see that $1300-1307 zone as a likely zone we could move towards.

 

[Welshman]

Hi Josh,

 

Thanks for your reply, appreciated. I have an alternate count similar to you where 4 is where you have it and 5 is then a possible Ending Diagonal. That's why I've stopped to reflect at this moment. Either way , Triangle v ED, they're both ending indicators, Triangle being the penultimate move or ED being the final move. I'm waiting for either move to complete and then will enter short position, patience patience patience required:) ( I have this move as "A" of an ABC correction)

 

 

 

 

 

 

 

 

 

 

Good to hear from you and good luck

[Welshman]

 

Forgot to attach the chart

[Guest JoshM]

This is why I do not use Elliott Wave with my trading. Theres always another way to look at it when it doesnt work out. But if you are making money then you can't argue with that. Good luck

[Mercury]

Hello again Welshman,

 

From my previous post ont he FTSE100 you will know that I use EW extensively as part of my trading methodology.  I find it vital to assessing where the market is at in its cycle.  I start with the Weekly charts to get the long term position and then hone into the hourly to trade.  There is always at least two alternatives to contend with so it is a process of constant evolution and re analysing for new price action information.

 

Using your gold example I have the same count as you but also an alternative.  Everytime we start a new move it could be either a 1-5 motive wave OR an A-B-C counter trend rally and we won't know until Wc or W3 is complete and then the next move will tell the tale.  However it doesn't much matter until then as the opportunities are the same.  In gold I see either an Wave A/1 completed moving down to a W B/2 OR this is a Wave 3-4 move with a further Wave 5 to go to get up to a Weekly chart Wave A.

 

Note that there is a strong Negative Momentum Divergence and Stochastic is dropping, which is indicative of a significant retrace.  When these bottom out and if they coincide with a Fib resistance line then that will be a good place to go long.  On the hourly I foresee a lot of up and down noise in the short term with another pop up to $1290iish quite possible before the Wave B or 4 gets going.

 

At this stage what is important is that gold is set to drop and the Fib tool can help us pin point where it will turn back up.  Long term gold is going up in my view so I only want to add ot my long positions until I see a major turn.  I'm targeting the $1400 area for that major turn and looking at the Fib 50% or 62% to get in long having already got long and holding at $1080.

 

Here is the chart:



[Caseynotes]

Interesting educational series on Elliot Wave for those who may be interested. Part 1 here (with links to parts 2 and 3).

 

http://winnersedgetrading.com/elliott-wave-explained-easy/?utm_source=Hootsuite&utm_medium=Social%20Media&utm_campaign=Strike%203.0#sthash.s7oNt1es.dpbs

 

 

 

 

[Guest MAR]

On 22/03/2017 at 14:34, Caseynotes said:

Interesting educational series on Elliot Wave for those who may be interested. Part 1 here (with links to parts 2 and 3).

 

http://winnersedgetrading.com/elliott-wave-explained-easy/?utm_source=Hootsuite&utm_medium=Social%20Media&utm_campaign=Strike%203.0#sthash.s7oNt1es.dpbs

 

 

 

 

Just taken a little look at this and I feel its very easy to understand but I didn't see any reference to part 2 and 3.

Thanks for putting the link up 👍

[Caseynotes]

6 minutes ago, MAR said:

Just taken a little look at this and I feel its very easy to understand but I didn't see any reference to part 2 and 3.

Thanks for putting the link up 👍

can't see either (or remember) though I see the article was updated just a few months ago.

[Guest MAR]

20 minutes ago, Caseynotes said:

can't see either (or remember) though I see the article was updated just a few months ago.

Oh yes I didn't notice that.  Thanks again

[CharlotteIG]

DailyFX also have some guides if that would help but if you have some questions specifically I can see if our TV team can get a specialist in to discuss Elliot wave video.

https://www.dailyfx.com/free-trading-guides#beginnerGuides

 

[dmedin]

1 hour ago, CharlotteIG said:

DailyFX also have some guides if that would help but if you have some questions specifically I can see if our TV team can get a specialist in to discuss Elliot wave video.

https://www.dailyfx.com/free-trading-guides#beginnerGuides

 

 

There was a chap on not so long ago, I think he might also be on these forums.

[CharlotteIG]

2 hours ago, dmedin said:

 

There was a chap on not so long ago, I think he might also be on these forums.

We did a piece before about Elliot waves, I wasn’t aware he way part of the community as well. 

[CharlotteIG]

Jeremy Naylor was thinking of doing an Elliot/Fibonacci video if the community would be interested?

[dmedin]

Yes!  Jeremy is good  

[dmedin]

Are we going to get to hear Jezza discuss EWP then?

[dmedin]

On 09/03/2016 at 15:25, JoshM said:

 Theres always another way to look at it when it doesnt work out. 

 

This is so funny, what you've just described is TA in a nutshell - not just EWP.

[dmedin]

11 minutes ago, TrendFollower said:

The key question is establishing which assets demonstrate the use of EWT would have led to successful and profitable trades say over the past 10 years? 

 

 

No technical trader can (will?) demonstrate such a thing.  To the best of my knowledge, all technical traders start out working for big companies that can make good profit (in absolute terms) from very small price movements since their existing capital is so large.  If they ever make it on their own, it's because they're already made a lot of money from salaried work.  Even then, they only ever commit a small proportion of their own capital to trading and they always 'top up' their funds with other offerings (teaching trading, giving speeches etc).

The Fibonacci ratios are often useful and some of the EWP ideas can help give you an idea of where to go, but consistently?  Don't know about that.

Edited December 14, 2019 by dmedin

[dmedin]

17 hours ago, TrendFollower said:

There may well be evidence that certain assets adhere to EWT more than others on a historical basis

Gold apparently.  Anything with 'mass public participation', i.e. anything that a lot of other traders are applying EWP to.  I'd be very surprised to see anyone who has been using any kind of TA successfully for 10 years come on this board, after all 'why should they' lol when they can sell analysis for a living instead of giving it away for free.

[CharlotteIG]

@Jeremy IGTV has produced a piece with Lee Stanford from tradingcollege.co.uk about Trading the markets with Elliott Wave and Fibonacci.

Great if you're looking to get into using Elliott wave, here are some of the things Elliott waves can help you with:

• Wave analysis identifies the trend
• Wave analysis identifies countertrend moves within a trend
• Wave analysis confirmed the resumption of a trend 
• Wave analysis identifies the termination of a trend
• Wave analysis provides high probability setups. 

I hope you enjoy it

 

If you don't have time to leave your suggestions on community you can contact Jeremy on Twitter @JeremyNaylor_IG. 

[dmedin]

Will watch this when I get home, hope this guy covers the Fibonacci extension ratios as they are about the only thing in EWP that are actually useful for trading (as opposed to teaching/providing 'analysis')

[dmedin]

13 hours ago, CharlotteIG said:

@Jeremy IGTV has produced a piece with Lee Stanford from tradingcollege.co.uk about Trading the markets with Elliott Wave and Fibonacci.

Great if you're looking to get into using Elliott wave, here are some of the things Elliott waves can help you with:

• Wave analysis identifies the trend
• Wave analysis identifies countertrend moves within a trend
• Wave analysis confirmed the resumption of a trend 
• Wave analysis identifies the termination of a trend
• Wave analysis provides high probability setups. 

I hope you enjoy it

 

If you don't have time to leave your suggestions on community you can contact Jeremy on Twitter @JeremyNaylor_IG. 

@CharlotteIG this is a really good introduction, please can we see more examples of actual drawing of retracements and extensions if there is ever another video on EWP, because that is the part that is absolutely key and the bit that people need most practice with. 

[CharlotteIG]

9 hours ago, dmedin said:

@CharlotteIG this is a really good introduction, please can we see more examples of actual drawing of retracements and extensions if there is ever another video on EWP, because that is the part that is absolutely key and the bit that people need most practice with. 

@dmedin, I will speak with IGTV team about this. I've passed your feedback on. Really happy that we're getting suggestions because they do listen and it means you can get videos you're interested in  

[dmedin]

I've read this guy's book, it is okay - the nature of the subject means you have to read it several times before some of it sinks in.  He says you should also pay attention to the character of the wave and points out some of the famous gotchas like 'extended fifths of fifths' being followed by big corrections and also the mind-boggling subject of flats, zigzags and permutations thereof and how you can potentially spot them and measure them.

https://www.amazon.co.uk/Five-Waves-Financial-Freedom-Analysis-ebook/dp/B005JC5WWU/ref=sr_1_1?keywords=ramki+wave&qid=1576835294&sr=8-1

Edited December 20, 2019 by dmedin

[Kodiak]

Always look for wave 3🎅

[Mercury]

22 minutes ago, TrendFollower said:

don't think you can apply EWT to all assets.

EWT can be applied to any market and any asset, like many analytical tools include supply/demand, support, resistance etc.  It will show different patterns of behaviour from market to market but that behaviour (human behaviour) is prevalent on all markets.  In order to use EWT, or any form of technical analysis, a trader must become very familiar with the key drivers, macro influences and the ebb and flow of the price action, only then will the EWT become useful in the context of a particular market.  Note, my view is that EWT is best used to identify cycles and in particular where a market may be in that cycle and is best use in conjunction with other analytical techniques, including macro fundamentals.

[Mercury]

15 minutes ago, Kodiak said:

Always look for wave 3

Fully agree.  the Wave 3 identification (or wave C of a major counter trend phase) is a vital aspect of long term trading and indeed trend following.  At such a point I will switch from swing trading to trend following.  As an example we may be about to see such a moment on Arabica coffee.  If the current bearish phase completes as an A-B-C at key support and then turns up and makes a new higher high then a Wave 3 or Wave C will be on and trend following techniques can reasonable be applied.

[Mercury]

On 20/12/2019 at 11:57, TrendFollower said:

One of the questions I have to the IG Community in general is whether anyone has conducted any research into which assets have historically adhered to EWT principles more than others?

I do not agree with the premise of the question.  What I am saying is EWT works for all markets all the time.  The hard part is how to use it.  As usual it is easy to see it and map it in hindsight, and this is how it is best used, to see where we may be in long term cycles.  I do not use EWT in isolation, it works better for me as a corroboration to other techniques over and above the long term cycle aspect.  You can use EWT to map any market all the time if you are seeking to assess the long term position and therefore the likely long term direction. 

[Mercury]

On 21/12/2019 at 11:47, TrendFollower said:

ome of the issues I have with EWT (this may be due to my lack of understanding or technical skills required to adopt it successfully or profitably) are as follows:

 

On 21/12/2019 at 11:47, TrendFollower said:

How can a trader identify on a consistent basis the beginning of a wave or an end of a wave?

You don't use EWT for this, all you can say is that a wave is likely to be coming to an end and what wave you are in.

On 21/12/2019 at 11:47, TrendFollower said:

Wave Prediction seems to be an art which only the very few will have the skill set or ability to translate into their trading so that they are consistently applying it both successfully and profitably.

Not sure what you mean by wave prediction but everyone who uses EWT, and the are many professionals using it, seek to assess where in the cycle a market is and therefore where it is likely to be heading.  If this is what you mean by prediction it takes some experience and a knowledge of the"rules" but not that much skill.  It is not used to time and entry or exit.

On 21/12/2019 at 11:47, TrendFollower said:

A trader can only confirm a certain wave has materialised until after it has. How does this help with trading decisions in real time?

Again it is more about where we are in the cycle.  If then we see the market conform to the long term scenario road map we can project forward with confidence but again this is about putting your trading into context and not entry and exit.

 

On 21/12/2019 at 11:47, TrendFollower said:

It would be good to understand what if any 'edge' EWT can give a trader.

For that you would have to study and practice using EWT in analysis and see how best to incorporate into your trading method, same as with anything really.  For me, when I started out I was trying to trade shorter term but found I was often trading against the dominant trend. EWT was a way for me to assess which way the dominant trend was heading and when a market was in a counter trend rally.  At is most basic that is a good start for me.  After that you can hone your method and develop usage with experience but as with all technical analysis, including simple support/resistance pivots, it cannot be used as a simple set of rules that if followed produce success, no such thing exists.

 

[Mercury]

1 minute ago, TrendFollower said:

Thanks for your responses. Much appreciated. 

NP, if you decide to look into it Elliot Wave International is a good place to start.