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« Calm Before the Coming News Storm | Main | Last Chance is About Over »

Wednesday, November 04, 2009

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min

>>Elliott Wave is garbage, just as Greenspan and Roubini and Jeremy Siegel and Harry Dent and everyone else who claims to know where the economy is headed is GARBAGE. Do not be suckered into thinking anyone has the answers. It's all inside information, vigarish, and luck. Mostly luck!

Posted by: General Tom Thumb | Friday, November 06, 2009 at 04:43 PM<<

General, with due respect , SIR!, Ithink the TOOL E-Waves may not be garbage but that perhaps some of those that try to use it might be, SIR!


General,

min

"Elliott Wave is the language of the market. Some people write doggrel with it and some write Shakespeare. That's just how it is.


Posted by: DG | Friday, November 06, 2009 at 06:36 PM"

Yeah that's the ticket!

Or give your 4 year old a power saw and maybe he'll cut his arm off with it; where a skilled carpentar will build you a nice house?

min

AND THIS DOESN'T MEAN SUBSCRIBE TO PRECHTER AND DO WHAT HE DOES. IN FACT IT USUALLY MEANS DO THE OPPOSITE.

THE TOOL HAS VALUE. THE GURU? MAYBE NOT SO MUCH MOST OF THE TIME...

vipul garg

Michael,
you emphasize a lot on the trend and rightly so.

what is the trend identification and trend following system that you use or have found to be of value consistently ?

i am surprised that you would have subscribed to neely /other ewavers uptill now, given your experience of trading for last 29 years and outright dismissal of wave theory.

still looking for holy grail ?

DG

Always count on me to stay fundamentally neutral on people I have no first hand knowledge of.

Posted by: min | Friday, November 06, 2009 at 07:16 PM

---------------------------------------------------------

If only a few more posters on this blog had the same principle.

"My point was that the tool is not flawed but the wielder of the tool (Prechter in this case) was the problem." (min)

In finance, there's a distinction made between "risk" and "uncertainty". Risk can be managed and that's what e-wave does. Uncertainty is inherent in the markets and can't be managed. Wave theories flaws are the flaws of uncertainty, not risk. The reason I place it at the apex of technical analysis is that it manages risk better than any other technical system. There are some more speculative aspects of wave theory that MAY enable one to identify moments when uncertainty will rear its head. I'm thinking of Neely's call in 2001 that wave structure was setting up for something big to happen, just before 9-11. That's more speculative, of course, but it's there.

I posted an example of a trade set-up I used yesterday and how it enabled me to make entry and exit strategies based on a "to the penny" analysis of wave structure. If someone else wants to post how they can find set-ups that enable the same level of entry and risk control in comparison, I'd be interested to see it.

Also, I don't hide behind "proprietary" black boxes. Anyone who reads Neely's publicly published materials can get the entire theory in the same way I did.

min

Well said DG. I've found that to be the case also working from a different and disrelated direction as well so it must be some basic truth to it.

min

>>If only a few more posters on this blog had the same principle.

Posted by: DG | Saturday, November 07, 2009 07:23 AM<<

Except for the ocassional obnoxious poster, I think most of those posting "E-Waves is garbage" honestly believe it from either having failed to get the results personally or seeing some of its proponents get egg on their face one too many times.

Some of us who have been able to extract viable results know it isn't the easiest tool to use but it does have the virtues you listed and so is worth puting into one's trading tool box. It's ability to help one manage risk is of course unparalleled as you say. And it's ability to let you know you're wrong or right is the best I've found as well.

I'm sure at least some of Neely's rules are efforts to disabuse the practioner from what he hopes he sees in order to more clearly show him what the market might actually be saying (?).

I feel a weakness of this tool is it requires of the practitioner, some (as yet unknown) minimum benchmark level of logic discipline(?)and personal integrity(?) to make it do what it can do well.

E-Waves will probably never be something useful to most traders because if the practitioner strengths required to make it work aren't there they're not there period. But it doesn't mean E-Waves is unworkable far from it. It also doesn't matter since other tools can lead to good results as well.

Another weakness of E-Waves is timing and I know Neely has done a lot to correct that. I have spent most of my time getting that one under control as well through various TA tools used in concert (like Prechter says to do in his book, if only he would take his own advise!!)

Your observation that anyone taking a position has a bias is also correct but the degree of bias can vary wildly and this tool does best when the bias is kept to a minimum because you're right a true "no-bias" scenario is probably unacheivable.

Bias is probably one of the biggest stigmas this tool suffers from. Prechter's incorect perma-bear bias since 1987 is a good illustration of how easily bias can render a powerful tool practically useless.

IT'S NOT THE TOOL, IT'S THE PRACTITIONER!


DG

Except for the ocassional obnoxious poster, I think most of those posting "E-Waves is garbage" honestly believe it from either having failed to get the results personally or seeing some of its proponents get egg on their face one too many times.

What I would find interesting is whether or not those people eventually found something that worked for them. My guess would be that they were never cut out to be traders anyway.

I'm sure at least some of Neely's rules are efforts to disabuse the practioner from what he hopes he sees in order to more clearly show him what the market might actually be saying (?).

Yes, one of the side effects of using NeoWave is that it saves the trader from himself and his bias in many a situation.

Your observation that anyone taking a position has a bias is also correct but the degree of bias can vary wildly and this tool does best when the bias is kept to a minimum because you're right a true "no-bias" scenario is probably unacheivable.

Dr. Brett over at Trader Feed makes the analogy between trading and scientific hypothesis testing. Each trade idea derives from a set of variables lining up in the way that the trader believes will lead to a certain market outcome. Each trade idea should also be accompanied by a specific price point at which it becomes invalid and the trader should exit. That's exactly what wave theory does. A trader's "bias" is the same as a scientist's "bias", in the sense that the trader, like the scientist, really never knows what the outcome of the trade will be in advance, but he should know what will invalidate the reason for the trade/experiment in advance.

min

DG;

All the above is sound. Can't argue with basic truths and these truths are even more amazing when one has observed the results first hand I think.

Your logical perspective is obvious to me in your posts that I've read and I'm certain this quality plays a major part in making wave theory workable for you.

As you know the "trader" profession has an extremely high turn over rate, so yeah, a lot of the people that deride wave theory probably weren't cutout for this to begin with.

There are also those who have a different set of strong qualities like good intuition (gut feeling); sleuthing skills; better understanding/familiarity of other TA tools, etc. etc.; that allow them to succeed as traders just as well.

These guys are sold on their methods just as much as we are on ours and would probably defend their methods with similar ferocity.

That group's complaints about wave theory comes from a different source; maybe stemming from man's propensity to reject what he doesn't fully understand but as well from some of the boneheadedness of some of the major proponents of wave theory.

Unfortunately, Prechter is more closely associated to Elliott Waves than the inventor himself and Prechter has most of the time been a certified AAA Bonehead. There is no way to disguise it no matter what color lipstick is used.

I think the key is to separate the tool from the Guru/weilder of the tool as they aren't the same thing. FWIMBW.

Michael

New highs Gold.
New lows Dollar.
S&P surging and once again followers of Hochberg and Prechter are getting absolutely CRUSHED.

Wash, Rinse, repeat.
Wash, Rinse, repeat.

Sherman McCoy

DG you're a narcissist. You're wrong most of the time, but never in doubt. New 52 week highs on the DJIA, must be time for you to double your short.

Is this the final, final, final, final top? Or the second alternate count.

If you can't code a strategy, it has no value.

DG

What are you talking about Sherman? I said on Friday that the charts looked like we would head higher. It was an up-front call made in real-time, not some BS after-the-fact crap like you do.

And you, whose every post is "Hey, look at how awesome I am. I'm on the other side of every losing trade you've ever made!", calling me a 'narcissist' is beyond even the old "pot calling the kettle black" adage. Look in the mirror, dude.

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