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Elliot Wave Principle

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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

 

Spot Gold (DFB).png

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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.

 

Gold.png

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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

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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

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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:



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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 👍

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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.

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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

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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. 

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

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

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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.

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I think one of the things a trader can do is look at how often Elliott Wave Principles can be seen on a specific asset. So for example once this information can be established then one can begin to consider odds and probabilities. So for me the key would be to find an asset where it can be clearly evidenced that EWT could have been applied to any trading decision which would have led to profitable trades. The higher this percentage figure the better. 

So Natural Gas apparently (I do not know this for sure) has around a 72% historical EWT count. Now if this is true then the odds and probabilities would be in your favour over a period of time if you applied EWT. However, if you choose an asset where the percentage is say 20% then it would not be wise to trade this using EWT unless you could accurately know when EWT could be used and avoid when not to trade the asset using EWT. 

I am just going to share a few articles to offer a balanced view on Elliott Wave Principles. Please remember these are not my views and are the authors views. I am merely sharing on this thread as they are related to the thread title. 

https://steemit.com/backwards-thinking/@greer184/the-cult-of-the-elliott-waves

Elliott Wave Hype Is Poison for Traders

https://www.turtletrader.com/elliott/

Elliott Wave Junk Sucks in the Gullible

https://www.turtletrader.com/wavejunk/

I personally do not use EWT in my trading but that does not mean that there is not merit in using it. It can be extremely complex and understanding and talking about EWT is one thing but actually applying it on a consistent basis and profiting from it is another. 

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? 

If anyone knows the answers as to which assets these are and what the percentages are then this is the thread to share it. 

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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 by dmedin

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@dmedin,

I don't know the answer but there may be others on the IG Community that are more knowledgable than me or even use EWT both successfully and are hugely profitable applying it. They may be aware of certain assets where the probabilities of using EWT are in their favour due to confirmed historical evidence. There may well be evidence that certain assets adhere to EWT more than others on a historical basis. Of course that does not guarantee that the assets will do so in the future but it just increases the odds and the likelihood of it occurring again. 

Just because I don't have the knowledge or evidence does not mean such assets do not exist where the application of EWT would be greatly increase your chances of successful and profitable trades. I personally do not use or apply EWT to my trading and it has not hindered me.

I would be interested in knowing which assets adhere to EWT more than others and what the percentages are. For example are there any assets which adhere to EWT historically over 70%? Let us put Natural Gas to one side for the moment as I personally think due to the extreme volatility you would have to be a supreme EWT technician to be able to consistently make profitable trades on Natural Gas using EWT. If you put NG to one side then are there any other assets which say adhere to EWT historically from say 50% - 70% of the time?

I do not know the answer but if anyone does know then it would be very interesting and helpful to the IG Community, especially for those who are genuinely interested in EWT and applying it to their trading. 

Also for those assets which say do adhere to EWT over 50% of the time how does a trader know that it will so on the next trend, next move up or down, etc? How does one establish apart from a failed trade after the event on whether the asset is going to adhere to EWT?

Edited by TrendFollower

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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.

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@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. 

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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')

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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. 

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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 :) 

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I just saw the video and interesting. I liked the question about how does a trader know they are witnessing 'EWT' in an asset until afterwards? I also liked the sidestep answer! 😀

Does anyone on the IG Community or even the IG staff such as @CharlotteIG know which assets historically say in the past decade have adhered to EWT the most? This is something that will be evidenced by historical data and charts. Even if @CharlotteIG does not know the answer is she able to find out from the vastly experienced IG team?

I think once traders (those who are interested) know which assets adhere to EWT the most then they can use the demo account to practice trading using EWT on those assets. Of course there are no guarantees that those assets will continue to adhere to EWT in the future but using the demo account will eliminate the risk of making any mistakes or losses whilst this is established and confirmed. 

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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 by dmedin

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@dmedin,

I don't think you can apply EWT to all assets. I think there will be some assets out there which adhere to EWT far more than others. Once these assets can be identified (through evidence of historical charts and data) then it increases the odds and probability for traders to successfully implement EWT into their trading. 

I do not know which assets these are but those who follows EWT must do. They must have conducted this research to establish which assets EWT can be applied to more successfully than others.

I am guessing some assets like illiquid stocks or certain commodities will not be as suited to EWT than maybe specific commodities or FX. I do not know but I am assuming this is the case. 

I read somewhere that Natural Gas adheres to EWT around 70% of the time. I do not know if this is true but if anyone has the time, urge or passion in relation to EWT then maybe they could looking into this and confirm whether this is correct or not and if so then using which time period. 

So Gold is one asset which was used at the start of this thread. Does anyone know (keeping it simple) how often Gold has adhered to EWT historically say in the past 5, 10, 15 and 20 years? 

Is Gold one of the best commodities to trade using EWT? Or are there better commodities out there? I think this quantification would be very useful to those who are genuinely interested in applying EWT to their trading. 

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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.

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