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William -
I have used Elliott Wave analysis for years. I am an analyst and not a
trader, but I have always made trade recommendations and have a good
record with them. Elliott can be used on its own, but because it is
largely subjective, it is a dangerous tool to use as your sole reason
for making a trade. Elliott works best if you can come up with one or
two reasonable counts and then refine them by looking at things like:
volume, support/resistance, trendlines, MACD (weekly) and market
sentiment. What I have found EXTREMELY useful, even for daytrading, is
that Elliott gives excellent buy and sell and stop levels. I have found
many intraday patterns retrace near 100% so you can set intelligent
levels for entry and stops. On a longer term basis, it is one of the few
tools that allow for reasonable projections.
One of the great things about Elliott, is you know when you are wrong,
often before you get taken out by market action. If you believe that a
2nd wave has completed, that means that wave-3, usually the most
impulsive wave, has started. If prices rise, but only grudgingly, you
are almost certainly not in wave-3, so get out, and with a profit. You
will see this b4 any indicator gets you out!
There are programs out there that do Elliott analysis too. And, Elliott
analysts disagree all the time, but so do classical technicians. TA is
subjective period. So is trading.
As for Bob Prechter, he has, and readily admits, had a real bad call on
stocks. That does not mean others have not had good calls. Bob is a nice
man, and knows more about EWave than almost anybody, but because he was
wrong, you should not condemn EWave analysis.
I have had some good calls and some atrocious ones. I do not follow
stocks day-to-day, but last October 27th, I wrote to buy Dow near open
when 7000 breaks as doubt it would sustain. I targeted 6980 (missed by 4
points). I also said new highs in 1st half of 1998. Of course my target
was 8500, but I realized it would be over 9000 long b4 we reached 8500.
(I also thought dow would stop years ago at 4950, but said if we got
past 5250 it would get to at least 7000, prob somewhat higher). In bonds
I called for new yield lows last year and picked July 2 for a top on
bonds back in December. Of course, I did think that we were gonna go to
7.50-8% back at the end of 1996, but figured that yields were going
lower by the time we got back below 7% from 7.26%. So, EWave allows you
to look forward and realize u r wrong long b4 many other disciplines.
Sorry for the long post.
Steve
William L. Mabee wrote:
>
> Have never tried to trade utilizing Elliot Waves. However, am left
> with
> impression is that they are not very useful. Last year read "At the
> Crest
> of the Tidal Wave" by Robert Prechter. His market prediction certainly
> has amounted to a miss by a mile. Anyone actually use these to
> trade ? Is this methodology better used to predict longer term
> trends ?
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