Most Elliott Wave practitioners admit that their system is only meant to be a “general guide” with many possible outcomes (i.e. additional randomness and variability is introduced). That is, there is an “ideal” wave pattern according to the theory, but in practice there can be deviations from this pattern. Nothing about this admission refutes the above arguments, nor does it strengthen the underlying predictive power of Elliott Waves.
Wave traders generally enter at breakouts, and in my opinion it's too late. By reading the price correct, you will have a much better risk reward ratio.
Noticed there are many good wave traders. This is just my opinion.
I see a bull flag more than a bear.... a major correction has just happend. this is not ready to fall yet.
tradewonk
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@lzardoya, It's an example not an idea.
RalphStPierre
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@tradewonk, interesting insight. worthy of further discussion. I like the idea of waves for direction and possible reversal areas and price action for entries. Being a wave trader and always aware there is an alternate count which is probably why many traders dont find much merit in the discipline. The biggest downfall to EW is waiting for confirmation and as you stated in some cases thats waiting for 300 pips. A large amount. In any event.Great post. And thank you for the fuel for deeper thought on EW and price action.
rovingmutt
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thanks wonk
rovingmutt
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Thanks for the example, do you have any books/ traders you would recommends for study, i think supply/demand is the best way to trade
tradewonk
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@rovingmutt, I can recommend "trading in the zone" it's not about S & D but about being profitable with the correct mindset.
Lowphat
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i know a bunch of wave traders and some would have made low DD longs at the corrective waves all the way up that channel. if you are making low DD entry's all the way up to the 5th wave(which usually ends in a strong S/D level) there is nothing wrong with that. I have watched a professional wave trader trade live for more than a week and it was impressive.
Also IMHO regardless if you are using a necked chart or 20 christmas tree indicators but your method allows you to trade for a living and your draw-down is manageable you have my respect.
green pips to all :)
elyte
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Thanks for your opinion. But I think picking tops like this also come with more fake signals than a minor breakout. Most who pick tops also extend the stop loss far above to take care of unwanted spikes. Selling at breakout with the stop loss at the top also give a good R/R. Entry strategies are varying and work well if the user understands how to use it well. Thanks for your good input
tradewonk
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@elyte, This is not just "top" this is a fresh supply zone that have not been tested before. Supply and demand zones, is often not "top and bottom" and it's areas where the sellers and buyers are strongest, therefor much less fake signals, then trading after wave tools to be break.
Primalsteam
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It's a fair point.
Honestly, the wave theory gives traders that bank on it an exit point. Is it perhaps more important that you HAVE an exit point than that it's the absolute perfect exit point in any one given trade?
I think you're right, using the wave can work and not using the wave can work. Good post.