Elliott Wave theory - why does it work?

[colion]

When discussing Elliott Wave theory and use, do people on this board differentiate between EW in simple terms (i.e., impulse = 5 waves, correction = 3 waves, pattern characteristics, etc.), the various EW schools (e.g., NeoWave, Miner's approach, Prechter, etc.) and Fibonacci levels (e.g. 0.618 retracement, Fibonacci patterns, etc.)? EW (of any school) is presumably a function of group behavior (mass psychology) and a crack at describing this phenomenon was made by Plummer in "Forecasting Financial Markets." Fibonacci levels on the other hand are "Fibonacci" and according to some are reflective of natural phenomena. Elliott did not initially incorporate Fibonacci levels in his work and added them later when he tried to explain every "wiggle." The two can be (and are) used independently.

Personally, I find it useful to treat the two individually. EW provides a broad background of where the market is while Fibonacci levels, patterns, etc. give a "heads up" which when combined with other indicators, etc. are useful for specific trades. The confluence of EW, Fibonacci, Gann, and standard indicators is often a powerful combination. Rarely does anything work for very long in a "vacuum" without confirmation from other studies.

 

[bvpraveen]

When discussing Elliott Wave theory and use, do people on this board differentiate between EW in simple terms (i.e., impulse = 5 waves, correction = 3 waves, pattern characteristics, etc.), the various EW schools (e.g., NeoWave, Miner's approach, Prechter, etc.) and Fibonacci levels (e.g. 0.618 retracement, Fibonacci patterns, etc.)?
.....

Hi,

Actually there are not many Elliotticians here and hence not much discussion on EW. Rarely does a discussion on EW pops up.

Praveen.

 

[uasish]

Aloke is a practitioner & using EW for last few yrs in this forum ,earning money silently,mostly here are involved in nitty gritty's,tell me dont we all know simple mov. avg. is lagging ? so at some times can we use it's lagging ness in our benifit for Stop Loss,do we use it ? Like wise there are certain good thing in Dynamic hindsight based indicators,EW is one such.
When used with our signals from MS (for seggregation ) ,this is a potent tool.
Thatswhy though mockingly CV says ,we are not better than carpenters,there is an inner philosophy ,the carpenter is aware of the use of his tools,are we ? then arn't we inferior.

 

[uasish]

Eveready now (+) 2.47 % at 10.35

 

[uasish]

Eveready (-) 1.5 %

 

[islcare]

exactly man. you are 100 % correct. I strongly agree your term,
******
see ur technical analyst coming to television.like prakash gaba,ashwani gujral,etc.etc.
go and find what wealth they have created and u will get ashamed if anyone of you is following them.
******

 

[uasish]

Eveready (+) 1.18 % only (still far to cover,the lost ground)

 

[uasish]

Eveready Industries trying to make an upmove with descent vol.

 

[JAGGYONLINE]

Hi,

I Am A Budding Elliot Wave Fan Too. Infact Something Is Better Than Nothing . It Really Helps To Know The Market Direction (impulse Waves) And Corrective Waves Just Directionally And Tade Accordingly. But Targetwise Prediction I Feel (for Ex. How To Predict Wave 3 Target And Wave 5 Target If Wave 1 Absolute Value Is Known) Becomes Very Inaccurate. Amitt Can U Throw Some Light On How To Predict Targets For Wave 3 And Wave 5 From Wave 1 Absolute Vale.
Please Guide Us The New Elliot Wave Followers So That The Subjective Nature Of Elliot Wave Is Gone

 

[amitt29]

To Jaggyonline,

In an uptrend wave 3 can be ideally anywhere between
1)equal
2)1.618 times
3)twice wave 1.

Care to note it shud be measured from bottom of wave 2.Just like the ABC of a flat or zig zag.Third longer than 1st.

Under ideal circumstances wave 5 shud be a)equal to wave 1,b).618 of wave 1 and 3 excluding wave 2.
Ideally it ranges from 77 % to 62% of wave 3.
77 is arrived by root over 3/5(square of the inverse).

Care to note that the 2 most ignored rules of EW
1)a corrective wave shall never retrace in full the previous impulse.so once a swing low has been identified u can apply orthodox EW rules to just trade.
2)wave 4 shud never breach top of wave 1 of same degree(overlap)that is when wave 1 is correctly identified.