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.....wave interpretation is more art than science. Give four
Elliotticians a chart and you'll have four to eight interpretations.....
Charles Marchand
Herein, I think, lies my problem.
What I had thought was that those who have studied and understand EW would be
able to say, in reasonable unison, what had past. They would be
able to look at a chart and say what the position was, with reasonable
agreement all round. The next thing would be to consider
where the market was likely to go, based on the past action - and at that
point, it would be equally reasonable for there to be divergent views (if
there wasn't they would all be rich!)
Where I thought EW would have the upper hand for
the experienced exponent would be in knowing where the market had reached,
with some degree of certainty or, shall we say, enough to produce a money
management scheme to trade the future. I had assumed that, say,
waves 1,2 and 3 had been identified, then it could be established at least
that the market was in wave 4 and that, eventually, we would have wave
5.
Consequently, if that were possible, then a
trading plan, with reasonable chance of success could be implemented - subject
to a r/r/r and target, etc, etc. And by the time you were in wave 5 you
would be sailing a long with a trailing stop, towards the bank...
Clearly too many people do EW for it not to be of
considerable assistance (and maybe even produce a tradable system for
some). The problem for me is that it appears to be a system which
is usually, if not best, applied to the longer time frames - which obviously
call for much wider and larger stops to trade competently, if not
confidently. Would anyone suggest that it is a day trader's tool, I
wonder?
The irritating thing about wave counts, so far as
I can see, is that they are always right after the event. It is
quite true that the market moves in waves and these wave can be seen, often
perfectly, after they have happened. How can one harness this
phenomenon and make a workable trading plan, for the longer term, in the same
way as on can read the small, intraday swings, in the short term?
As has been suggested, perhaps it is much more of
an art form than the science necessary to make a proper trading
plan; that counting waves can only really be used as a
guide. I don't know. But if we are back to my count on the
bonds as being invalid because of the wave 4 being less than wave 1, I am at
square one and am simply hopeful that someone will be able to say where, in
what count, we are - but I won't dare to hold my breath...
Anyway, I am sure that today's First Friday move
will give a clue and if that was (is!) a double top on the contract high, then
the bonds should head down and the stock market up... we will
see... in fact, in a couple of hours or so we will know!
May today's numbers favour your
analysis...
Bill Eykyn
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