Elliott Wave theory - why does it work?

[bvpraveen]

.... EWT allows you to set objective stop losses, rather than subjective ones, which in my opinion is a great asset to have.

Hi,

I agree. Thats very true.

EW allows a trader to set a logical stoploss, unlike those used in conventional TA like a fixed %, n bars low, x% below High/Close, etc.

We can be confident of our SL. If it triggers, then we might be wrong in our interpretation about market position. May be it will just adjust our position or will make us to reevaluate our counts to some extend.

I'm not aware of any such SL mechanisms which is better than what EW offers.

Praveen.

 

[amarnath]

EW is just for academics and not to make money from pratical trading imo

 

[bvpraveen]

EW is just for academics and not to make money from pratical trading imo

hmm........

 

[amitt29]

Most of them are not even academics.

 

[marcus]

maybe its a case of "The Emperor's New Clothes"

 

[uasish]

Ridiculing without knowing is ignorance,even pleading ignorance do not spare us in court of law.

 

[oxusmorouz]

Just a small question,
To those who support EW, could you please back it up with some evidence as to its practical applicability?

 

[uasish]

Yes, i bought Bajaj Hindusthan (date & price in nifty 5000 thread) ,before Balarampur Chinni.Though both were oversold,but Balarampur chinni was at 5th Down Extension.Hence i entered Bajaj Hind @ 156 (sorry it was may be in HLL /Bharti thread of Sarfarazd ,dont remember) .Later when on 28th Feb (budget day) got the Wave confirmation of Balarampur Chinni & entered @ 50.65 (in buy balarampur chinni thread).
So both being oversold holding Balarampur is more comfortable,if we know the wave position.
Guj Alkali ,in (nifty 5000 thread) i entered at 109.00 ,& was not comfortable,
mentioned that also,because the 5th Down end count was not complete.
There are many such examples in my trading diary.Reason of entry may be Metastock signal generation,but without confirming Wave position no entry initiation,that is becoz wave will give a probable idea of Exit.
Nifty 5000,in that thread on those doomsday period only wave analysis could give us the confidence,see the posted chart dates.

Hope this satisfies your doubt,EW is a tool to be utilised,knowledge on that will fortify along with MACD or Sataistical or Gann.

 

[oxusmorouz]

Yes, i bought Bajaj Hindusthan (date & price in nifty 5000 thread) ,before Balarampur Chinni.Though both were oversold,but Balarampur chinni was at 5th Down Extension.Hence i entered Bajaj Hind @ 156 (sorry it was may be in HLL /Bharti thread of Sarfarazd ,dont remember) .Later when on 28th Feb (budget day) got the Wave confirmation of Balarampur Chinni & entered @ 50.65 (in buy balarampur chinni thread).
So both being oversold holding Balarampur is more comfortable,if we know the wave position.
Guj Alkali ,in (nifty 5000 thread) i entered at 109.00 ,& was not comfortable,
mentioned that also,because the 5th Down end count was not complete.
There are many such examples in my trading diary.Reason of entry may be Metastock signal generation,but without confirming Wave position no entry initiation,that is becoz wave will give a probable idea of Exit.
Nifty 5000,in that thread on those doomsday period only wave analysis could give us the confidence,see the chart dates.

Hope this satisfies your doubt,EW is a tool to be utilised,knowledge on that will fortify along with MACD or Sataistical or Gann.

You must not mistake me but these are historical results from your data base of trades and are vulnerable to hindsight bias "after the fact". No one likes to reveal a loss making trade with waves or with any indicator/pattern.
By backtest, I mean something unbiased which people can reply upon...

 

[uasish]

Agreed 100 % ,but here the question is Whether EW helps.Yes it helps ,given a choice of 2 stocks prior to entry if we know their wave position ,it helps for price expectations.
With back testing we can be relatively confident.But projecting price,means expectancy,which can not be backtested,where EW steps in.You are very right that we all have lots of drawdown (for those entries also EW was used),MACD / MA crossover / etc may have been used ,so what do we conclude EW /MACD all wrong or my understanding was wrong ? My drawdowns cant be infered for EW's failure.
How can you say "Hindsight bias" ,those entries are documented here in this forum with date & time stamps (to verify intraday chart's price at that time) of those posts & on those dates the wave count & formation may be noted plz.
Even my loss trades are also having date & time stamp.(Those win/loss i revealed)