What's Wrong With Elliott Wave & Forecasting ?

[ace]

i've used EW for years and one thing I know for sure is that the
PriceTime Movement of financial instruments is IRREGULAR

irregular means there are no repetitive cycles, no repetitive patterns
and no simple exact repeating EW formations

so it's interesting when The acknowledged Master of EW, Glenn Neely asks
" What is Wrong With Elliott Wave and Forecasting ?"

while Neely is promoting his 'Neely River Trading Technology' he nevertheless
has some pertinent comments about EW
excerpt:
"First, even if you are good at forecasting, you probably won't be right more than
about 50% of the time.
Second, even if you are right about the direction of the market, your entry price
may be too high or too low, preventing the trade or reducing future profit potential.
Even if your entry was great, your stop placement may be too close or your exit
too early.
If you give each step of this process a 50% rate of success (probably too high),
by the time you reach the end you will achieve (at best) a 12.5% success rate.
Is there any wonder trading is so difficult for most?"
http://tech.groups.yahoo.com/group/get_traders/message/3727

some individuals choose a signals service, others like tinkering with the tools
contained in a charting program, others love coding and invent (re-invent) all sorts
of new indicator/system 'mousetraps', still others follow 'gurus'
eventually it's realised there is no holy trading grail

ultimately, each individual trader invents their own trading system
and for lack of a better description, that system is based on their
realised or unrealised personality

 

[Spiderman]

hi ace,
This is a real good post. Though I am not Neely follower as I follow
standard elliott. the question of forcasting and trading is mind boggling. This
shows that how difficuilt it gets while trading and Neely too got his answer after years of efforts. Bob prechter too got his answer years ago when he
sat down with Dick Diamond to learn trading . very good post

spiderman

 

[CreditViolet]

If you give each step of this process a 50% rate of success (probably too high), by the time you reach the end you will achieve (at best) a 12.5% success rate. Is there any wonder trading is so difficult for most?"http://tech.groups.yahoo.com/group/get_traders/message/3727

Maybe thats why Neely promotes and doesnt trade, he doesnt understand basic probability theory.And trading is difficult for most people because they are focussed on the wrong things like forecasting.

some individuals choose a signals service, others like tinkering with the tools contained in a charting program, others love coding and invent (re-invent) all sorts of new indicator/system 'mousetraps', still others follow 'gurus' eventually it's realised there is no holy trading grail ultimately, each individual trader invents their own trading system and for lack of a better description, that system is based on their realised — or unrealised — personality

A mathematically profitable method is profitable regardless of anyone who uses it. Most people dont have a method because they dont have the inclination or seriousness to treat this as a business.

Please check out Eckhardt's equity curve below.He seems to have done well with his mousetrap it seems.Does any of the EWers have anything similar?

 

[CreditViolet]

the question of forcasting and trading is mind boggling. This shows that how difficuilt it gets while trading and Neely too got his answer after years of efforts. Bob prechter too got his answer years ago when he sat down with Dick Diamond to learn trading

What I find mind boggling is why should one spend years learning something that even the experts say has low probability? Good trading can be learned in under 6 months given todays access to information and data and perhaps under proper guidance.

 

[Spiderman]

yes it may take 6months and to some even 6days. The short cut are alwayws risky. Every infant cannot be lucky like abhimanyu to learn his battles
in the mother's womb. He has to come out and grow up slowly or else he will
lose in the end like abhimanyu.

 

[CreditViolet]

yes it may take 6months and to some even 6days. The short cut are alwayws risky. Every infant cannot be lucky like abhimanyu to learn his battles in the mother's womb. He has to come out and grow up slowly or else he will lose in the end like abhimanyu.

The question is not how much time it takes but the utility of what is learned.
Going by the low probability that experts attached to EW forecasting, it would be same as Abhimanyu entering the chakravhyu after learning calligraphy or folk dancing.

 

[hari09omkar]

The question is not how much time it takes but the utility of what is learned.
Going by the low probability that experts attached to EW forecasting, it would be same as Abhimanyu entering the chakravhyu after learning calligraphy or folk dancing.

Sir,you have learnt the art of making people laugh at the same time pinpointing at the subject of discussion and taking the point away from the opponent completely.......Please don't hit sixers in every lose delivery and give some dot balls to the bowlers also .........although those sixers are very much enjoyable and an occassion for learning too,than those dot balls of the chinese (or japanese,where cricket was banned earlier) bowlers .....keep us entertained and enriched with your thoughts as well......

 

[Spiderman]

you are right . Existing tools except ew are folkdance tools or primitive tools
and if you like them play with them. you are free to play with them.Who are the experts by the way?

 

[amitt29]

What I find mind boggling is why should one spend years learning something that even the experts say has low probability? Good trading can be learned in under 6 months given todays access to information and data and perhaps under proper guidance.

Of course good trading and EW can go hand in hand.But first one must grasp the concept.Which goes the same for trading also.
Whilst forescast is for "what if" scenarios.Trading discipline comes with practice and singularity.Which are also an integral part of anything.

What Neely etc said and did,was denial,and that is 2nd to human nature.And that they realized after many years.

 

[Spiderman]

Amit you are right. It is just a matter of choice. There are so many methods and styles. Its a personal choice which way you want to go and stick with your method for a long enogh time. Trading Dicipline is at the core of all this.
Because to go against the herding impulse is not an easy job. I have been trading markets for a decade now and I have never found any fault with Ewp.
It is when I go stubborn I lose the message of elliott wave. people who do not use ew are the first to criticise it.