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> > I'm finally rolling up my sleeves and learning the twists and turns of
> > Elliott Wave theory and application.
> >
> > Can anyone point me toward web sites where I can check my counts
> > Thanks,
> >
> > Steve
> >
After studying Elliott Wave for the last four years I would caution you
about being concerned with the 'twists and turns'. For forecasting, as
in a newsletter or as a broker, the complicated counts are useful.
However, as a trader looking for low risk entry opportunities, I think
the basics are all you need to know. If the count is complicated, you
want no part of the market. To initiate trades one must be looking for
easily identifiable counts that do not have a lot of alternates. I
would use close only charts to eliminate the ambiguity of certain
pullbacks. On a close only chart going up if the market closes lower, I
count that as a wave. No exceptions. Then I think you should look for
clean, clear, indisputable five wave moves which are the most defined
patterns Mr. Elliott discovered. These moves should either be faded or
joined on a pullback.
I would also advise you to resist the temptation to 'be a hero'. EW
offers one many instances when entry and exit can be very precise, and I
try to take advantage of this on every entry. However, once my position
is established, I want to become more trend following in nature and only
'heroic' in my exit on a beautiful five on a higher time frame. I do
not try to trade every small pullback and advance because costs are high
and by doing so I am forcing myself to be right in my analysis again and
again. I prefer to only be right on original entry and hopefully be in
at the beginning of a nice trend. If I don't see a great five to exit
and usually reverse my position on, I trail my position with a stop much
like a trend following system.
Elliott Wave deals in probabilities and possibilities. On must
understand the rough probability of success, how much one can make and
how much one is risking when entering a trade. If the profit expectancy
of this equation is positive, the trade should be taken. You have an
advantage. Many of these situations have a chance of success of 20% or
less. Nonetheless they should be taken because the potential profit vs.
the potential loss ratio is so favorable. ie 15% chance of winning
risking $200 (always include comm. and some slippage when figuring risk)
with a possible win of $5000. This is an extremely profitable situation
even though you will lose 85 out of 100 times.
Scot
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