Elliot Wave... Identification

[melteye]

Ok. Let's give this a try... What am I doing wrong here?

http://www.melteye.com/elliot.png

[fabrizio]

Melt

Yes Soylent....that's the way I spell it (Smile). And your words are - again- very wise.
As well as the one from Gavishty.

If I am allowed , I would add one little thing.

The #1 reason of failure for traders in US ( quoting Nassim Taleb the 80% or more are out of business in the first 5 five years) is being undercapitalized. Beside the source, the common sense makes it clear.
The prerequisite reigns in any entrepreneurial activity.

So, please, watch out.

[gspiker]

Playing a bit of catch up in my reading of this board...

The #1 reason of failure for traders in US ( quoting Nassim Taleb the 80% or more are out of business in the first 5 five years) is being undercapitalized. Beside the source, the common sense makes it clear.

I would agree, this is one huge reason. I can't tell you the number of times that people with 10K or less have tried to get me to teach them to trade. I tell them this is just too little...but many of them ignore the advise and try to trade anyway. I'm sure there are some traders out there who have done it, and as a newbie worked a 5K ot 10K account into something. But from what I have seen - that is the very rare exception.

I have seen people take a second out on the house to start trading full time also. Imagine the pressure! No money heading in except what they make of the markets. Brand new to the whole thing - and now with deeply in debt. The pressure alone makes it almost impossible for them to survive.

And the other thing thats crazy. So many people think they can come into the game - without any real training - and start to place winning trades. The same people would never enter a football game with professionals and expect to score, or even in many cases escape without injury. Yet they think they can compete in the markets against people who have been doing this for 20-30 years, some of whom are second or third generation traders and who have access to vast amount of capital. And they think they can earn a living right off the bat. Its insane.

G

[soylent]

Hi Melteye --

Nice job on the charting.

I will add this:
You are puting a lot of effort into it. In that: I looked at your chart and was highly impressed with how you applied corrective patterns, etc... My suggestion: It's hard to make money on a corrective pattern -- so, I don't look for them.

The best way to ignore corrections: Change your timeframe view and get a recount on the oscillator. Some other timeframe is probably showing a good 1-5 wave sequence.

I am attaching the same chart of NQ (actually, QQQ) in a 30-min view. You can see a good buy opportunity where you had the ABC pattern.

The reason I suggest this:
The problem w/ ELLIOTT is: I can prove darn near anything in hindsight. I can show you how this corrected that and those really were these. I can even show you how we are currently in a wave 4 retrace on a 60-min that started in December!

But, playing it on a percentage basis, if you stick to buying wave 4/5's w/ a proper oscillator setup, you will do much better.

Your charting skills are excellent. But, find the high-percentage setups and go for those. Using the 60-min view you are looking at, I didn't see a setup I would have taken (on the 60-min chart) because the percentages were still too low.

But, I did take a TYPE 2 off QQQ (NQ) on the 30-min chart last Friday. And, added to it on the pullback Tuesday. I just wish I was smart enough to have dumped it all Thursday -- but, alas, the 'greed' factor kicked in.

Nice work!

[soylent]

On starting capital...

Garth / Fabrizio / et al --

Yes -- I can see how being undercapitalized would be a major hindrance...

I am 'capitalized' but I certainly feel pressure to perform. I do believe this causes losses where they would be gains because I'm trying too hard.

Like, in my QQQ example, I was in a nice 30min setup and should have taken profits but I switched to 60min becuase it was showing a strong wave 3 so I thought 'I'll just stay in'...

I don't know how someone could trade a $10K account. But, I do find it amusing when brokers call and ask me to open an account, "Just send us $10K and we'll open your futures account". Wow. Can you imagine what would happen to that money for the unintiated?

[fabrizio]

Melt

Good job: but I do not argue with you on the ABC since this is what always happen among Elliotists!!!

Garth, yes the insanity is even greater if you think that most of the people we are talking about are not alone: they drag in the nightmare an entire family .

Soylent, what you say isn't that bad , happens often : is part of the human nature, actually of the continuos discipline learning of a trader. The point is that - one way or another- you can afford it. And go to sleep serene; and play - if you have one- with your kid transfering to him your calm, strenght, solidity.

[melteye]

Re: On starting capital...

Originally posted by soylent
I don't know how someone could trade a $10K account. [/B]

Try $2000

[melteye]

Ok. Checking for wave forms on the NQ Daily chart. This one follows everything I've learned but was wondering if I found the beginning correctly. Just realized how well fibonacci measurements work on waves.

Also. The possible wave B just penetrated 0.618 retrace of wave A. I was wondering if there was a standard retrace for healthy corrections.

[fabrizio]

Melt

To make it very simple , follow this link to Marc
http://forum.esignalcentral.com/show...&threadid=6501 MARC EXPLAIN THE WAVE RATIOS VIA FIBO EXT.

It will be of great help. All the waves unfolds with an harmony and rithm , by law of nature. this is even more true on S&P and some other Indexes very Harmonic. Serach this harmony and things will be ....easier....

"ALL WAVES OF SIMILAR DEGREE WILL RELATE BY GEOMETRIC RATIO IN BOTH TIME AND PRICE" R.N. ELLIOT, THE WAVE PRINCIPLE.

ps ( howdy Amigu Marcus I hope you are in great shape resting a bit and ready for new great ventures!!!!)

[melteye]

Thanks, I will change the labeling of A. I just didn't want to take the time to change font sizes

I actually started analyzing earlier waves, but since I only started reading about Elliot Wave yesterday I wanted to make sure I had the basics down.

I just followed the links prior to your post and have learned to apply them.



But I also noticed that the correction might be a 5 wave move, so I looked back and realized we might be in a 4th wave correction.

Thanks for the basic concepts Linus, and thanks for the repeated help Fabrizio & Soylent. You've been a great help.

[melteye]

Ok. Longer term analysis with projected 4th and 5th wave. Crude, but I don't have AGET at my disposal.

[melteye]

I just tried switching to different bars and Renko makes it MUCH easier to identify waves, especially extensions.

Thought I'd share that pointless realization.

[soylent]

Melt --

I, too, went through several revelations on all this. At some point, you'll discover ADX, RSI, CCI, Stochastics, Moving averages, Candlesticks, patterns, the total interaction of the sun, earth, and moon...

If I can, let me make a suggestion:
Elliott waves (and, really none of the other stuff) will make you you money. Having a tradable system where you mapped your win/loss ratio will make you money.

Personally, I find the AGET system the 'the best' choice.

If you're going to go it alone and concentrate on e-waves and fibonacci, do this:
- study the whole wave sequence and look for a pattern that repeats that you can use. Use the 5/35 -- it will help you. It doesn't matter if it's an ABC, 1-2-3, 5th of a 5th, 1st of a corrective, etc...

- When you find that sequence test it over and over to come up with your targets and stop losses and see how much you 'net' on it.

The wave counts, while interesting, are difficult to make money on -- even if you are the best wave counter ever. But, certain patterns within the waves are highly tradable. I fought that for a long time but now just accept that it actually works...

Look for the predictable patterns.

[melteye]

I currently use RSI, CCI, Stochastics, 10/40 simple moving averages, candlesticks and have a pretty good understanding of continuation and breakout patterns.

Through all my studying so far elliot wave has had the biggest impact on how I watch the market. It lets me get a better picture of the market as a whole.

I'll take your advice about looking for tradeable patterns. At the moment I'm having some difficulty correctly counting intraday waves. In my past experience with NQ patterns that, through my reading, should be continuation patterns actually reverse... or they continue only to suddenly jump to the opposite side if the triangle.

I'll start using the $playback feature and see what works best. Although I really have no idea what timeframe to watch or trade on... I guess through time I'll figure it out.

Thanks for the advice.

[fabrizio]

Melt

My personal appreciation for your intelligent determination towards a complicated ad certainly " ambiguos " methodology like the oine we like and follw.

One little non requested advice?

Work on less volatile undrliyng and define firts your TF: is your world, actrually the world in which all the other partecipants to the auctuion on that TF watch the market in the same way as you do.

Go costantly back and forth from Weekly to 5 min , going through all relevant TF. Back and forth, back and forth. Try to keep your mind clean from any other thoughts: void. Non telephone calls , no how much you made , no how muchg you loose, no Tax problems. Just concentrate on what market is triyng to tell you.

If you find other thoughts in your mind, exit the position and stop the activity. Use a great help in order to organize your operations like Ninjatrader (www.ninjatrader.com) or other similar ( but since I know it thoroughfully can honestly advice it to you) give him a free ride ( if you have IB of course).

Buckle up , always . ( NT will do it for you) EW structures changes. A C that goes over a certain retracement level is no more a C but can transform into a W3 . So it was not a C.

And strive to have AGET on your PC: just XTL will give you the chance to make money from the very beginning in a safe and simple maqnner.
Do not risk your small but valuable capital: you are in a competitive arena, fighting against the big guys: they'll eat you up if you have not "firewalls". Is not a great satisfaction ex post say "I was right" but someone came in and made strange game s with the book and eat up my stops.........after 10 times you have noi more capital to trade and you are on your fixed cost obliged to stair at the screen ....

P.S.: forget about Renko. You stich to ONE AND ONE ONLY APPROACH AND NO ONE APPROACHED ELLIOT WITH RENKO OR PF. FOLLOW THE ORTHODOXY. Do not deviate at least for two years of real trading.

Good luck