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Mastering Modern Elliot Wave for Consitent Profits Journal FIO July 2017
Hello ! Thanks for your interest into this journal, where i'm going to share my journey for this month (maybe more you knows), of progressing in Mastering the modern elliot wave theory, to make consistent, clear and clever profits in the markets.
What are the particularitys of this journal, and what is is goal ?
We are going to see, and i'm going to share, how i use the modern elliot wave theory, to see any markets in any time frames (or any others charts), in a crystal clear way, and to be enable to take better trading decisions this way.
The goal of this journal, is for you, to try to share my vision of the modern elliot wave theory used in Day-Trading, my experience, and my mistakes that you could avoid if you know them (if you decid to try elliot wave, or in trading in general) ; and, for me, to make my journal public, and having some feedbacks, since i have a private journal for over a year, but there is no exterior feedback, and i don't share what i learn with a private journal.
What is the modern elliot wave theory ?
The modern elliot wave theory, i'm saying modern a lot, because, the old elliot wave theory is really popular, but not really good on the markets, to forecast and trade any markets. The old elliot wave theory, has been build upon observations of Ralph Elliot in the 1930, on stocks and the Dow jones index. Elliot, loved the Dow theory, that basically say that the markets move in big and fast move "trends", and consolidating and slow move "corrections or consolidation". Elliot, with his observations, upgrade a little bit all this, and say that when the market move in trend, they always move in a impulsive way, in a 5 ways structure, so there is 3 "big" wave that go in direction of the trend, the wave 1, 3 and 5, and 2 waves that go against the trend, wave 2 and 4, that are smaller than the impulsive wave, they are here to correct the trend, they are the corrective wave.
And that the markets also move in corrective phases, in 3 waves, 2 impulsives, "bigs" waves, and 1 corrective, "small" wave.
So, a cycle of the old elliot wave theory is : a trend of 5 wave, and a correction of 3 wave, we have an elliot wave cycle, and elliot tell us that the markets always move like this. Actually, this is not true.
That's where the modern elliot wave theory come in place.
I'm not going to go in the details of the difference between the modern theory, and the old one right now, but the modern is based on recent trading observations, its way more open minded that the old wave theory. But give you an edge, tell you when you are wrong. And you can also adjust the theory based on your owns observation, this is the progress, and that's why every elliot wave theorist is different.
Its not magic, and its not easy to master, even if the concept is pretty simple, we could say even easier to understand than the old theory.
And anyway, in today markets, we can't use the old elliot wave theory, without counting on "luck" to win. Its like if you were going to eat some 1930 bread, you may get lucky and it would have been frozen perfectly, and it would have tasted delicious, but if you eat a few breads of 1930, its really likely, that you eat one that didn't get frozen well in 90 years. And, if you do eat this bread; you are not going to be well, not at all. Same thing with your trading account !
How can this Theory help you increase your results in trading with every trading system ?
By following this journal, you will have the possibility, to understand the modern elliot wave theory, the different cycle, degrees and patterns. And being enable to forecast the markets on your own, like the biggest hedge funds in the world (I'm serious, a lot of big banks and hedge funds use the elliot wave theory, because, i can give really good results, its easy to review our trades, and most importantly, we can delete, or at least, reduce the influence of our emotional reaction on our trading, thats why the hedge funds looove this wave of trading).
By understanding, and seing real counts and analysis of waves used has a way of trading, that you are going to see in this journal, you will be enable to do your own counts on any instrument, and, you can either, use the elliot wave theory has a macro-system (and use a micro-system for the entry for example, and fibonnaci for exit), or even add the elliot wave theory to your tools of trading. There is a lot of persons that dont trade the elliot wave theory, but they used it, to know, what's the direction of the markets, and for example, a day-trader can forecast a daily chart to increase is odd of good trades by knowing what's the bigger direction of the market. Or also use it, on smallers charts, to know, in which pattern and cycle the market is, to have a clear idea of the direction of the market, in consolidation, trending, and corrective phase.
Is this theory the holy graal ?
No, the elliot wave theory is not magic, will not work 100% of the time, like everything, but with practice, you can create clear and probables scenarios of what's going to happen next in the markets. But, its not a magic tool, that a guy in a suit want to sell you, that can predict the futur of the markets.
That was the introduction of the Journal and now, here's a introduction of who i am :
First of all, i'm french, you may have noticed it earlier, so if you get trigerred by my english, don't hesitate to give any good or bad feedback
I'm Robinson Labourdette, i'm not going to hide that i'm not in the industry of Trading for 10 years, i started to get really interest by trading around 2 years ago, one of the first book i read is High Probability Trading Strategies which speak a lot of elliot wave theory, and how to use it with fibonnaci (i'm only quoting this, because its the only 2 thing that i still use today). Sadly, its only speaking about the old elliot wave theory, and after practicing for over 6 months in Day-Trading in a simulation account, (only 6 months, because the way i was working, was giving me the possibility to progress and learn really fast), i then tried a TopstepTrader Combine, in January of this year. I got really lucky, i had made half my objectif in 4 days, but then, right after a big news, i saw a trade, that i should not have taken, but i could not resist, because of a bad psychology. And, on a scalping way of working, the market was so fast, than when i press the button to enter, i'm filled at my target price, i don't want to lose this trade, so i keep pushing my stop lower, until the market move faster than me, and i got stopped out, with 70% of my daily loss limit in one trade. I find an excuse, that i understand my lesson in only 30 minutes, and that i can go back in the market, i take a trade, it don't go right away in my favor, i totally forgot about my daily loss limit, and i get flatten by the system. I was long, and i got flatten at the exact low !
I then practice back a little bit in simulation for a fews days (i still have my combine subscription, and i can reset the combine, let's not waste any time !), i reset the combine, and i don't get lucky this time (when i'm speaking about luck, is because the way i was trading, was really too big, 5 contract of CL, 50$ per tick, on a 50k combine with a 1000$ daily loss limit, even with my stops at the time of around 5-8 ticks, its way too much !). And i fail this combine again.
From that moment, where i failed a second time a combine, i have keep practicing in a simulation account, to master the elliot wave theory. But with the old elliot wave theory, i didnt have any clarity about my trading plan and system. And at a point, i discovered the modern elliot wave theory, it was so passionating, that i have worked enough for any employed to make a burn out, if they don't love their activities, but i do love trading, and progressing. And that's how i progress so fast, and that in under 2 years, i have passed from the total newbie in trading, to not necessarily, an expert with 30 years of experiences, but at minimum, somebody that handle, is plan, strategies, entry and exit, psychologie, and who is extremely profitable.
I dont have the pretension to say that i can predict low and highs, but i create probable scenarios, and they give the opportunity to make great and profitable decision in the long term.
What is my way, and style of Trading ?
You will see it by following this journal ! But, if i needed to give a name to my style of trading. I would say, day-trading long term, most of my trades last between 2 to 6 hours, but i can go above. This give the possibility to not get emotionally attached on a trade, not over-trading, not spending hours and hours in front of screens, not being subject to a lot of stress, and, catching the pieces of the big moves on the markets. Example : i'm not going for a trade that has les potentiel of 30-40 ticks (300-400$ per contract on the CL). And, i'm trying to keep it simple, and i'm not doing any projections with the elliot wave theory, by taking in consideration the cycle that ended, and to try to predict the next cycles. I'm just doing my "homeworks", to have a clear scenarios of what could be the next wave, and where she could stop, to be enable to trade the wave.
What are my plans ?
So my plan short-term, was to keep practicing, maybe until september, and if i "feel" ready around this time, i could considerate to start a new combine.
My plan long-term, is to practice, practice in day-trading, mastering the modern elliot wave trading and the way i trade, then keep day-trading, but starting to practice in swing-trading, to not having the need to spend a lot of time in day-trading to make money. So i see day-trading like an accelerator, that can help me go faster, in a financial view, and in a experience view.
Anyway, this post is already way too long to explain a journal, i hope you will love it, and learn a lot of things to improve your trading by following me into this journey !
Have a great and lucrative day !
I'm not going to talk about what is the modern elliot wave theory right now, but i'm going to do so, tomorrow, and the day after.
But i would like to share my week in trading.
(This is sim to practice, and, i'm actually in a stade where i try my way of trading, to see if its profitable on the long term (at minimum 20 trades)
Monday : Didn't trade, i was too busy
Tuesday : I take a trade, it was a profitable pattern and structure, a trade of a wave C. But the trade lasted longer than expected, and i have closed the trade at 22h (France time), at 5 ticks of losses, because with the TST rules, you need to close before 22h10. And then, in the next hour, the pattern happen, and move of 40 ticks and hit my targets, but that's okay, i know that i should not trade too late.
Wednesday : Didn't trade too, i didn't find any good opportunities. (i am only trading one market, i will explain this later on)
Thursday : So yesterday, i have taken one trade, a trade of a wave C (i'm going to share what patterns and moves i'm looking for), i already done the journaling for this, there is a lot of screenshots, and the text on the charts are not in english, but the next one will be. If you want to see the journal of the trade, check out the next post. The result, was an expanded correction, but i still managed to get 29 ticks off this trade, with one contract on the CL.
Friday : Today, one trade taken, also a wave C, the start of the wave was extended, so it has been pretty slow, and the pnl was jumping around from 0 to 30 ticks for a long time (i was looking to get between 50 to 60 ticks). The target got hit, really in a really tight manner, and the trailing stop was pretty big, and i got 36 ticks with one contract on the CL, and after that i left the trade, the move continue, and i could not profit from hit, since i'm trading 1 contract, and i can't use multiples targets. But well, i'm not hungry against the fact that with 2 contracts i could have made more. Its the game And the journal of today trade, will be posted tomorrow.
I'm doing my journal in Evernote, i have write it in english, its better to read it with the screenshots in the same time.
This journal has a lot of screenshot, and the text on the charts are not in english, but the next journal will be differents
(PS : since i didnt explain my strategy and the terms that i used, in the mean time, if anybody has a question, i will answer it)
(Sim) Pattern and structure : potential up ABC (or 123), with a wave A of 5 wave, and a zig-zag in 3 wave on the entry
Profitable and/or lucrative or not : Lucrative, and profitable
Explanations : I have taken a lot of screenshots for this trade, but that's okay and it was a pretty special trade. I didn't enter when the price come close of one tick of the 38,2%, because it was clearly a 5. If i want for a 5 to be corrective, it need to be either in a wave A or C, either the wave C of a flat, it could be a flat at the time, so i was waiting for a divergence in the cci for the wave 5. There as be none, and in reality, it was not a flat, but an abc (in reality its not an abc because the 5 wave of the a wave are not correct, but it can be seen as a 3, so the corrective structure was good). I follow my plan and put the symmetry, i have taken a trade on the break of the symmetry, but sadly the corrective wave was 2 cycle bigger than when i taken the trade. All the plan was followed, and since the pattern was, the structure was not invalidated, and the stop not hit. I didn't look often at the charts to reduce the stress (maybe once every 30 minutes, but i had alerts). When the corrective wave was finish and the price progress, my target with the ppa was smaller (i always base my target between the 85% and 100% ppa). When the target was hit, i started to trail my position, and i got stopped out for 29 ticks of gains. This trade was not "perfect", but it was a lucrative trade. Great !
That's a tricky question, but thanks for asking !
I don't think there is any good books on the modern elliot wave theory, (the modern theory, started to get discussed about 10 years ago, and the old one, 80 years ago !, so most of the books that you will find will speak about the old theory), but on more recent media, like the brand new and not know "internet". You can find content about the modern theory. I'm currently doing a list of a book, and some ressources, that helped me learn and used the modern theory.
But, keep in mind, that a lot of peoples, try to get the pattern right, to make prediction, because they are only forecasters. We, in the others hand, are traders, we do care about the direction (in yesterday trade, i didn't finish the journal, but i have taken a trade, i was not totally right on what was going to happen, because the markets and the traders are not perfect. But i got the direction right, so i managed to do 36 ticks). And since this theory is really subjective, and that's the reason why she hatted, its asking a lot of chart time to be used.
So, i'm finishing the list of ressource, but if you do want to learn the theory and how to use it, in my knowledge, there is no service or people that sell educationnal ressources on the theory, that are not forecaster, but we are not forecaster. So good thing, you can learn the theory for free, but, the rules and patterns are pretty simple, i'm going to post them later on (the time to adapt them to futures.io since they are just a piece of paper on my wall ^^), but its relativly easy to undestand, but not as easy to master.
My advice if you want to learn it, you can for example take some of the charts that i post, go on the date where they happened, and try to undestand why i did it, and how would you do it. Its better to know the pattern first of course, but the only way to get good with the theory, is a lot of practice.
By the way, if you think this could be helpfull, i could post charts that are unalysed and unlabeled, so you, or others can try to label them yourself, so after, you can have my opinion on the charts.
PS : The key to using the theory, is not adjusting your count on what you want, but on what the market is telling you, and to keep progressing, the theory and your count (if we didnt do this, we would still be stuck with the theory of 1930), i for example add a pattern to the theory, that i have seen often and often on the cl market in day-trading, i called it the Deviant.
I'm going to discuss in details about all this in future posts, don't worry
So, to learn the elliot wave theory, we dont forget that its asking a lot of practice, like if you were trying to ride an horse, but first of all, you need to know, how to get on his back, so here it is :
- As a book, i would recommand the book that i started with, High probability trading strategies from Robert C. Miner, sadly, robert miner still use the old elliot wave theory, and do not speak about the modern in his book, but its a great book, to learn how to use fibonnaci with elliot wave theory (the way we use fibo in the modern and old theory are similar).
- If you want to learn the patterns and structure in a professional manner, you can check out elliot wave forecast, like said in the name, they are forecaster, so its not perfect for a trader, but you can learn the patterns from them, and if for example you learn the patterns from them, you could be enabled to understand why i label those charts in a certain way, and then by looking at charts and labeling your own charts, you will get better and understand the logic.
Here's a basic explanations of the patterns : https://elliottwave-forecast.com/
And, if you read the pattern, you can watch this webinaire of them where they show in action the basics
Just, keep a mind-set of traders when you watch this webinaire. Because they tell you that the market MUST react like this, but, mostly in day-trading, the markets are not perfect, but if we keep a good, and logic to the market wave count, and decisions, on the long-term, we are going to be right way more than wrong, but not always. (i'm going to talk about this in future post).
And, if you want to see the elliot wave theory from the vision of a day-trader and investor, you can check-out 24elliotwave [yt]https://www.youtube.com/user/24Elliottwaves/videos[/yt]
Its honestly messy all the content that George is providing in this channel, but you will see a lot of example, and there is a lot of videos if you search them about day-trading the theory.
And most important, a live chart to do an analysis, but stay in the long term view of thing, if i dont work once, or for example, this happen 3 days ago, i have made an analysis on the market, but a wave 5 didn't had any divergence (that's one of the rule that i'm going to share), so i dont wanted to take the trade. And the market did exactly what i expected, but i was not in the trade. And that's okay, that's simply mean, that the non-minutieuse traders win this time, but on the long term, i know its better to be minutieuse, so i'm okay with missing a trade here and then, if it can avoid me to lose clarity and to lose a lot of trades.
(Sim) Pattern and structure : Potential wave C to the up side. We were in a corrective trend, probably a X wave, of a huge double zig-zag to the down-side on the CL. But anyway, i dont trade those types of moves, so i dont care. The A wave was a beautiful 5, and the corrective wave was YWX. (for those who wander, a an ab, is in 5-3; and a a YWX or the start of a flat is in 3-3, so the key to not trade the flat, and get stopped out, is to not trade the YW, because they can become some flat, and then stop us out). PS : half of the notes on the charts are not in english, the next charts will totally be in english)
Profitable and/or lucrative or not : Lucrative and profitable yes.
Explanations : The trade was early in the morning, i missed the first entry because i was doing some sport, but what i'm doing when i misse a trade. Is that, if the trade didn't hit the target point, didn't create a stop ajustement, and that the pattern is still good. I take the price at which i would have enter if i did not missed the trade, and i put an order. So if the market do me a favor, i will get filled, and be in the exact same condition that if i didn't missed the trade, and if the market don't do me a favor, i simply don't get filled, but i don't loose anything either. We can see better the structure on the 89 ticks chart (i use a 1597 ticks chart, and a 89 ticks to zoom into the price and also see the internal really well, but i use the 1597 to trail stop when i want to exit a position). So, i do get filled, and you can see it on the next charts, in more than 6 hours, the trade has gone nowhere, and the move could still be a flat correction, so i cant adjust my stop. The price then did a really big YWX (we do know that a c wave should finish in 5, but we also know that the markets and the wavers are not perfect, and that the YWX did hit the target (she stop 2 ticks away from the target, it was good enough for me, because fibs are not perfect either). I'm trying to not look at the charts when i'm in a trade (maybe once every hour), and i tried to create a strategy to automating my entry (by the way, if anybody know how to make work a strategy that will used atm order, contact me, any help will be great ). I'm doing this, because since i know i can have trade that last 6-8 hours sometime, i don't want to stay in front of the charts for that amount of time, and having my strategy, my stop and exit, automated after the entry, delete a lot of stress. But in this case, i had alert to tell me if we break the high, and get close to the target zone, and since i just started to use alert on nt8, i forgot to enable them lol, so i didn't have any alert activated, but i turn on a chart at the right moment, right after the hit of the target, and i have manually left my trade with an order, that's why there is a "entry" label instead of a exit. But, it was a short entry, so in reality, it canceled and take the profit for the long. We can see after the trade, that we had a big expanded 5 (so at the end, it was in did a c wave since i finish in 5, it was even a expanded c wave), i could have taken advantage of this move with 2 contracts or more, and multiples target, but that's the game, and i already made 36 ticks on this trade, that's more than great !
Hello !
I'm going to share my plans for this journal, you can also suggest things.
- Posting regularly blanks charts without counts, so you can easily open the chart, try to do your count, and the day after, i post the same chart, but with my count, and the result. To increase everybody count, and success in using the Elliot Wave. (i'm going to post the first chart like this today)
- Since i know, there is a lot of peoples that don't know what is the modern elliot wave theory, i'm going to explain what are the differences between the old elliot wave theory, and the modern theory. And why subjectivity is not a bad thing in the theory+ the pattern that i created, the deviant.
- I have already started to share the trades that i take, but i'm also going to share the trade that i don't take, because, in trading, the trade that you don't take are as mush important than the ones you take.
- I'm going to explain the patterns and how to count waves on a chart, so anybody can understand how to use the modern elliot wave theory, and start to practice, on live chart, or the chart that i'm going to post.
- The charts that i used, the indicator that i use, the fibs that i used, and why.
- The rules that i use and created for my trading. The elliot wave rules for Day-Trading. The psychological rules. And the guidelines for elliot wave for Day-Trading.
- What patterns i'm looking for to take, the macro-strategy.
- Why i trade the CL.
- My micro-strategy and my system, so how i enter the market, and how i exit the market.
- My routine of everyday, in my life and my trading. To increase results in both.
- And my customs indicators and scripts, that help me in my trading everyday, and that could help others.
- Lastly, my personal goals, that make me go forward, at an incredible speed, as a person and as a trader.
If you think this is interesting, useful or helpful, and that you want to express yourself, and support me during the Challenge, you can put a thanks, on the post for the challenge on this link :
Hello !
Here's a Journal about Modern Elliot Wave, where i'm going to share, trough my trades, how anybody, with any strategy and way of doing, or the elliot wave as a macro-strategy, can try tu undestand it, and used to get Consistent Profits …
Bienvenue aux concours des journaux! - Welcome to the real journal writing!
There is a big potential to your trading as your thoughts must be clear - your results too
Many questions can influence your future approach.
; and, for me, to make my journal public, and having some feedbacks, since i have a private journal for over a year, but there is no exterior feedback, and i don't share what i learn with a private journal.
). I'm doing this, because since i know i can have trade that last 6-8 hours sometime, i don't want to stay in front of the charts for that amount of time, and having my strategy, my stop and exit, automated after the entry, delete a lot of stress. But in this case, i had alert to tell me if we break the high, and get close to the target zone, and since i just started to use alert on nt8, i forgot to enable them lol, so i didn't have any alert activated, but i turn on a chart at the right moment, right after the hit of the target, and i have manually left my trade with an order, that's why there is a "entry" label instead of a exit. But, it was a short entry, so in reality, it canceled and take the profit for the long. We can see after the trade, that we had a big expanded 5 (so at the end, it was in did a c wave since i finish in 5, it was even a expanded c wave), i could have taken advantage of this move with 2 
