Here are the rules for Elliott Wave. Very simple and very neat. In order to get a valid Elliott Wave you need to follow three main rules:
(Before the rules though: There are impulsive waves (with the trend) and corrective waves (against the trend)
So what have we?
3 Impulsive waves and 2 corrective waves (5 waves)
So if we start with wave 1 (impulse) after that comes wave 2 (here comes the first rule)
1. Wave 2 is not allowed to retrace below the bottom of wave 1 in order to be valid.
after wave 2 we get wave 3
2. Wave 3 is not allowed to be the shortest of the impulses (wave 1,3 and 5). Remember the shortest it's not saying that it should be the longest.
and then we get wave 4 and the last rule
3. Wave 4 is not allowed to go below the top of wave 1.
Here's a picture:
After that we have the rules for the correction patterns, but that's another story!
Here's a link in case someone wants to go deep(er)!
Now, a few words of caution. First about the indicators that's out there and those goes for the ones that apply to NT.
The oscillator that gio's describing is more of a confirmation tool, and it's not plotting waves or anything at all. In case you don't know how to count waves manually it's completely worthless.
There's a wave counting tool made for Ninja and can be found on the (NT)forum. It's a bad one as well. I've had it on my charts and gave it some space. After my short observations, it seems to me, that is not respecting the rules. So avoid that one too.
The last word of caution, it takes some time to become an "expert" on EWT, and not because of the simple rules, but because of the rules for the corrections and all those IF'S. So please be nice to yourselves and don't use it in real trading until you master it. And even when you master it, it's still subjective somehow. The best way to use is in order to identify the trend.
Last words on this. Please do not confuse Fibonacci with EW. It has nothing to do with Fibonacci or harmonic patterns. It's the other way around. EW is using Fibonacci aid. That's it!
Trade safe!
/George
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The oscillator that gio's describing is more of a confirmation tool, and it's not plotting waves or anything at all. In case you don't know how to count waves manually it's completely worthless.
/George
with all due respect, i hate to differ with you - using a simple tool like this will alert you as to what wave you are in - which is very important to the novice waver (macd will do the same with the same settings)
why use it;
to anticipate the entry of wave 3 - to anticipate the entry of wave 5
to stand aside in wave 2 - to stand aside in wave 4
with mtp there is also a strength meter to gauge the strength of the waves - but this can also be accomplished with the ma on the script from ninja
the confirming tool for any selfrespecting waver is the use of the plain jane stochastic with default settings
Thank you KJAVED. Would you be able to recomend any Elliot tools?
Thanks
-Keep
Back when I traded options I had some success with ProfitSource from Hubb Financial which plots elliott wave counts and has nice price projection tools, which I used for options trading for picking strike prices and expiration months. Here's some trades I had with this. VRSNGOLD It even has a scanning tool that lists instruments that are wave 5 buys or wave 5 sells.
The problem I've had with EWs is where do you start the wave count? It all seems so obvious in hindsight, but not so much in real time.
Please guys, I would apreciate it very much if you could stick to Fibonacci patterns in this thread. By involving Elliott in this one, it's going to confuse people. Maybe gio or somebody else would like to start a EW thread. I'll be more then happy to contribute in that one, but let us not get confused in this one.
Thank you!
/George
The following user says Thank You to George for this post:
Please guys, I would apreciate it very much if you could stick to Fibonacci patterns in this thread. By involving Elliott in this one, it's going to confuse people. Maybe gio or somebody else would like to start a EW thread. I'll be more then happy to contribute in that one, but let us not get confused in this one.
Thank you!
/George
you used the word confuse twice
maybe you should go back and re-read page #222 (im sure you know what book im talking about)
M and W patterns are corrective moves and happen mostly likely in wave 2 and 4
Let me remind you of this forums line. "Traders Helping Traders". We're here to help out one another, not to show off. If you have something that you'd like to contribute with and help this thread in a constructive way! Please be my guest!
Thank you!
/George
PS: And what I mean by being constructive is, explain your stuff as if you were explaining it to a two year old kid. You have to wear in mind that there are two kind of people out there (in this case). The ones that doesn't know anything about it at all, and the "experts". Everyone should be able to benifit from eachother. And I hardly think that one can benifit from your posts if they're not developed properly. If someone asks you to guide them to an Elliott indicator, I hardly think you can guide them right by showing them that indicator. And by the way that picture of yours can be anything regarding to EW.
Now, in case I would have wanted to be constructive, then I would have given the details and helped people on the track!
With all due respect, be explicit, don't be lazy, you're the one benifing from it at last.
Last edited by George; October 4th, 2009 at 06:58 AM.
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maybe you should go back and re-read page #222 (im sure you know what book im talking about)
M and W patterns are corrective moves and happen mostly likely in wave 2 and 4
............and by the way take a look at your wave 3, and tell me in which way that's a valid wave three.....your wave 3 (3) is the shortest. And how does your 4 (4) fit into a Flat. And your 1 looks definitely like a 1 picked out of a book!
/George
The following user says Thank You to George for this post:
Let me remind you of this forums line. "Traders Helping Traders". We're here to help out one another, not to show off. If you have something that you'd like to contribute with and help this thread in a constructive way! Please be my guest!
PS: And what I mean by being constructive is, explain your stuff as if you were explaining it to a two year old kid.
i think you've insulted the intelligence of the people here but nonetheless,
i wrote this in 2 year old language (with pictures and colors)
on sept 23 (autumnal equinox) there was an expectant reversal - corrective move
color coded in red - price proceeded to decline, as expected, and found support at aprox 1036.25 then proceeded to retrace to aprox 1065.75
color coded in blue - price then proceeded to decline to inverse target projections of 1025.25 and 1019.75 ((i.e. measured move) (inverse of .707 is 1.413 and inverse of .786 is 1.272))
color coded in green - gann vibration was also expected at apex 10-02-2009
you may not know this but the majority of my post and charts have been well anontated - big mike himself has thanked me for that and has thanked me for sharing different insights
i think you should apologize for your disrepectful comments
The following 2 users say Thank You to gio5959 for this post:
i think you've insulted the intelligence of the people here but nonetheless,
i wrote this in 2 year old language (with pictures and colors)
on sept 23 (autumnal equinox) there was an expectant reversal - corrective move
color coded in red - price proceeded to decline, as expected, and found support at aprox 1036.25 then proceeded to retrace to aprox 1065.75
color coded in blue - price then proceeded to decline to inverse target projections of 1025.25 and 1019.75 ((i.e. measured move) (inverse of .707 is 1.413 and inverse of .786 is 1.272))
color coded in green - gann vibration was also expected at apex 10-02-2009
you may not know this but the majority of my post and charts have been well anontated - big mike himself has thanked me for that and has thanked me for sharing different insights
i think you should apologize for your disrepectful comments
Gio, I have no problem apologizing. So please accept my apologies. But I do have a problem with your intentions in this thread! Would you mind telling me about them?!
Thank you in advance!
/George
PS: And by the way, I think you might have confused your picture with some other thread because I'm not able to find any trail of it in this thread!
do any of you wave-counting/pattern finding guys use Dynamic Trader or Elliott Trader or MTPredictor or Advanced GET? curious as i have toyed around with some of this stuff but have a hard time finding the patterns on my chart without the aid of something like a program marking certain points.
"Let us be thankful for the fools. But for them the rest of us could not succeed." - Mark Twain
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