Many thanks for sharing your experience with this strategy. I've had the same trades with ending diagnals. They almost never go my way. I've had better luck with clear wave 5 bottoms. Tops seem to be a little trickier for me (especially in the overnight globex session. wave 5's tend to extend and keep stopping me out after a couple of jabs at it. This is why I only trade an hour before open, 2 hours after open and the last hour of the trading day. I've found that the waves are clearer (if at this time they have presented themselves) and the price action has shown itself. This helps give me an upward-sideways-or downward bias
I've been struck by the quality responses so far from my thread. I had the hardest time finding any mentors or traders that use EW in thier strategy
Thanks for sharing-Keep in touch and happy wave hunting
BTW-Speaking of your quick trade you made I posted my current wave count to show that I was able to see a clear wave 3 downtrend and made a quick scalp on the abc wave IV bounce. I've found(which I'm sure you have) that wave 4's retrace 38.2 % of wave 3. This may only be wave a of a second abc move up to the 50 or 61.8 spot but I didn't want to risk it falling after the 38.2 fib target. This to me was lower risk and high probability
I don't usually participate in the ES because of the tick width versus the cash market - just too wide and the data becomes undefined to my eye at the smaller time frames.
Personally my eye sees that big strong corrective Bull milestone move over 2033 and the possible 2 small waves behind it. That's potentially the proportional center of the rally correction.
I would personally need to see balance with 2 more waves, possibly an ending diagonal because this is potentailly in a wave c position, to balance the whole price structure out. Those are the little blue ovals in the rally on my 3 min chart.
And my resistance calc is at 38.75 for where I would look for an oscillator divergence with price.
There was no balance at the first resistance at 36.00 and no oscillator divergence, and RSI only fell to 40 anyway subsequently, so I'd call the move from 36 down to 32 a B wave down.
Which means Balance for the wave 1 or A up should be seen.
Also, things should go nowhere near 43 as that's well above what I see as the wave 4 of smallest observable degree. If it does, then to me something else is going on, and it's likely not a wave 4 up.
Also, keep in mind that the current rally could still just be wave 4` of 3 up because the structure at the tail end of wave 3` down is likely an ending diagonal and I see no correction within 1/2 the time or 5 point price rally for the potential wave 2` up. So any bearish price movement could really have some legs down.
My charts aren't really this messy, just how I marked it up.
Time for sleep.
The following user says Thank You to cpuz for this post:
Although I use Elliott Wave I have no "faith" in it. It bums me out to watch Prechter et al. turn Elliott wave into a religion of sorts. It's a great tool for identifying price movement and anticipating future price action, it will leave you broke if it becomes a religion or crystal ball to the person using it.
The following 3 users say Thank You to Canon for this post:
Totally agree Canon. If I just use it alone without fibs, volume and dom movements it's not always good standing alone. I think it all depends on how often one trades as well. Jeff Kennedy is correct in saying that only one or two trades will present themselves in one day if your lucky and 3 or 4 a week. I tend to take small gains like my examples and I'm able to catch larger moves up or down sometimes which improves my expectancy and R multiples. I also trail stops instead of having targets. I still have a limit or stop order because I want to bracket in case my internet goes down but I leave lots of room and trail the stops. NOt sure if anyone else does this but it seems to work for me. This way I can sometimes, let me say one more time-sometimes let the big ones run
The only thing is that if you do it this way and don't follow your rules I will miss the big moves which make my month or year. I guess we'll see how 2016 pans out. Thanks for the posts my friend
All the best
Last edited by smb2222; April 13th, 2016 at 12:19 AM.
Reason: Forgot to mention
Great post Cpuz. I really wanted to see someone elses interpretation. It's amazing how these waves show themselves. The only thing I hate about the overnight session is that it stretches things. This is why I (try) to wait until 11-12 midnight if I'm still awake to catch a quick trade before bed because the volume tends to pick up and there's more price acition
Thanks for the response and chart-good stuff
Last edited by smb2222; April 13th, 2016 at 12:27 AM.
Reason: mis spell
I totally agree. I think EW has a use, but we would be naive to think this current market has free price discovery. It doesn’t thanks to the continued manipulation by the Fed in this current bear market rally.
EW technicians are having a very difficult time right now especially in this relentless rally. One in particular whom I have great respect for is losing some credibility and has had to admit partial defeat. I would ignore anything Prechter and Co. say period. He has been market bearish for YEARS and if anybody used their service to trade they would be homeless. The number of times he has called a top since 2010 is laughable but he keeps on calling it and moving his count to suit.
I do not doubt we are in a bear market. We may even get a new ATH before the crash and yes I see the S&P at 1,100 in the next 18 months but EW needs so much time to pass before a count can be labelled it only gives you the approximate location of the ball park. To get to the ball park and find your seat is all down to you.
- Trade what you see. Invest in what you believe -
The following user says Thank You to JonnyBoy for this post:
Looks like the alternate count played out. It was tricky reading the waves on this one, but I've found that being patient and waiting to see things clearer is the best strategy. I know it sounds like it's easy. It's not but as an example even though the dow and s&p went up today and broke the last lower high it told me that most likely the alternate count was in play-BUT- it was already a possible wave 3 that was already extended so I didn't trade at all today-now i'm just going to wait for a wave 2 pull back and then trade the ride to new highs. Ofcourse this may be wrong but I've found EW very helpful in looking for direction. Let me know if you feel the same way
Last edited by smb2222; April 13th, 2016 at 05:52 PM.
Reason: Forgot chart