Ralph Nelson Elliott (1871 - 1948)
"... Even though many things and would seem to us extremely extraordinary and ridiculous, they nonetheless have been introduced and adopted by other great nations."
Rene Descartes, Tractate "Considerations on the method, in 1637.
In its work, "Elliott Wave Principle key to market behavior" Robert Prechter sees an interesting detail: "Elliott has never explained why the shape of the market are five waves in the development and three waves in the braking. He just presented it as an existing fact" .*
Foreign ease wave postulates attracts many beginners to learn the behavior of the market, but they were primarily studying what lies on the surface: the form of waves and their characteristics. Or, more generally, are beginning to examine the first graphic shapes, then the form of waves, and then go to study fractals Bill Williams and Professor. Mandelbrotta. And lose sight of the fact that the wave principle is the use of basic concepts of technical analysis (the momentum and a correction) that may characterize the graphs psychological condition of market participants.
Markets, which can be used for the analysis of the wave theory, can be quite different, but should have a fairly large volume of transactions, a large number of participants and a long history. Forex market from this point of view is, if I may say so, the ideal market.
The complexity of the use of wave postulates is in their flexibility and subjectivity in evaluation of extreme situations on the market, and the "unpredictable" nature of the market. The vast majority of projections based on the graphic forms of identification are not wealthy. For practical trading is not acceptable.
Another point: it is impossible to master this method immediately. In the wave theory of RN Elliott, there are two aspects that do not fit into the classical, which are beginning to explore the principles of the wave, a "step-up 5 - 3 steps down." It is "bad" fifth wave and "wrong" correction (in the second or fourth wave). As shown, the elimination of trade in the fifth wave is justified **. And the use of trade situation, "incorrect" correction is certainly necessary and profitable.
Subjectivism and a lot of variability in the interpretation of the wave of market structures are negative factor for the single investment decision, it is not surprising. The external simplicity and beauty is proportional to wave signs, represented in the graphs, after everything has already happened, that is "post factum", is only the tip of the iceberg, only one of many variations in the interpretation of image patterns. Nevertheless, it should be noted that, as the ability to swim or the ability to ride a bicycle, once osvoennoe the ability to read the market situation in the schedules of ekstremumam (without intermediaries in the form of technical indicators!) Remains for life.
So how about, how to start, how to approach the technical understanding of the market? Or, the trader must leave the interpretation of the market "white noise" to share the financial and media professionals?
You can practice "look" at the market, using "Elwave", with a highlight "of the time" to "the tree of waves (Wave Tree)". Computer programs rely almost everything possible wave signs and possible targets for each option. But ...
Choosing one of many options as a worker, then there is trade, investment decision is to share the user program, which is an investor. We can say only one thing. The choice between different options is desirable to do the wave signs in favor of the option, in which there are harmonious proportional relationship between the pulses and correction at various levels (timeframe) time together. And it is quite difficult, because it is necessary to take into account the entire range of market trends.
Not recommended for beginners to learn the principles of the wave, using their own analytical wave solutions for making investment decisions.
We need some time to:
A) Vosprinyat algorithms wave analysis.
B) No special effort to see on the graphs the difference between the pulses and correct.
B) do so at different levels (timeframe) time.
D) and able to freely use the wave labeling to compare different interpretations of the same schedule and do so at different levels of time.
D) deal on the emerging new extremes schedules at the appropriate levels of time.
Each new extreme supplements and changes the picture on the schedule for the entire previous period and the amount of options, which analysts at Forekse wave of real-time "digest" for the intuitive, subconscious level, sometimes it seems incredible.
You can use a purely technical approach, and through mathematical formulas (indicators) to monitor the wave patterns. Of these formulas of mechanical trading system (MTS), and thus close the question of subektivizme, many variantnosti and responsibility for making investment decisions. Psychologically it is a justifiable approach. But ...
Technical tools for research in this situation are well represented in a computer program of Thomas Joseph "Advanced Gann-Elliott-Trade" *. The program is implemented attempt to duplicate the technical indicators of the development of wave patterns, and in my opinion, as far as possible in principle "to believe algebra harmony", it was done very well in terms of technical analysis.
From the perspective of an investor, this program is a set of technical tools to address the issue: whether to hold the position further in the development of the situation and the trend is over and the market should be close or even deploy. In other words, in my view, the issue: whether the "fifth wave", giving a new extremes in the development of current trends?.
However, whether or not to spend time on the study of any mechanical, correct, "removing" a problem many variantnosti, methods of wave analysis? In my opinion, this impasse, in this case, "along with the water spills child. The main tool of analysis is that your way of thinking and that he should be trained for many variantnosti wave interpretations.
And if you did use the technical indicators for the overlapping of wave oscillations? For many traders, this approach seems to solve the problem. The technical indicator is the mathematical formula for modifying the visual presentation of exchange rate fluctuations on the charts, that is, in essence it should be for exchange rate fluctuations, and repeats them in a modified form. This makes it possible to build, analyze and make use of new dependencies and patterns relating to technical, computerized analysis using different software. And to create mechanical trading system (MTS), allowing the trader unambiguous trading signals. It is not the wave analysis.
This approach is lost objectivity of the analysis of the market and the willingness of the trader to the alternative development of the situation. In doing so, to adjust the MTS still needs to examine the levels of time and constantly optimize the parameters of technical indicators in the market at the level of "major" waves. Methods of calculating targets also need to examine the use of wave terminology. The desire to simplify the wave analysis (through duplication of wave oscillations of technical indicators) greatly complicates the analytical process and resulting kruzhnoy road to wave analysis again.
I think you need to remember the principle of "simple to the complex."
Quote: "Elliott has never explained why the shape of the market are five waves in the development and three waves in the braking. He just presented it as an existing fact." Indeed, this is simply a fact - in that way and has a momentum of correction. In my opinion, you should use a simple approach to assess the situation on the market (or pulse, or remedial), a simple universal trading algorithm simple Fibonacci ratios. And a simple hierarchy (the Russian dolls) image structures, telling about the behavior of the market at different levels (timeframe) time.
Recommended for beginners to learn the market: at the initial stage, to use someone else's analysis or analytical services, comparing their "opinion" on the market between them and constantly monitor "their" level of time **.
And it is necessary that the wave analysis, the analysis of market opportunities, but not its liabilities. Therefore, the criterion of objective analysis (in the selection of analytical services) can serve as analysts use alternative wave signs on the same schedule.
In my opinion, only the market can provide answers to any questions and need to learn their language. History is made up of markets for their extreme values, which are perceived to be remembered and accounted for all the parties, be it journalists, bankers, private investors or the Head of State. The market tells its stories in the language of the dramatic surge ups and downs or catastrophic correction of long-term consolidation.
The momentum and the correction is "ABC", which takes the market to communicate with his players. The momentum correction and the zigzag is the primary language of the elements of the market. A trend, this is the first word, which hears the market participant of the market is just alternating unidirectional impulses and corrections.
Foreign ease wave postulates attracts many beginners to learn the behavior of the market, but they were primarily studying what lies on the surface: the form of waves and their characteristics. Or, more generally, are beginning to examine the first graphic shapes, then the form of waves, and then go to study fractals Bill Williams and Professor. Mandelbrotta. And lose sight of the fact that the wave principle is the use of basic concepts of technical analysis (the momentum and a correction) that may characterize the graphs psychological condition of market participants.
Markets, which can be used for the analysis of the wave theory, can be quite different, but should have a fairly large volume of transactions, a large number of participants and a long history. Forex market from this point of view is, if I may say so, the ideal market.
The complexity of the use of wave postulates is in their flexibility and subjectivity in evaluation of extreme situations on the market, and the "unpredictable" nature of the market. The vast majority of projections based on the graphic forms of identification are not wealthy. For practical trading is not acceptable.
Another point: it is impossible to master this method immediately. In the wave theory of RN Elliott, there are two aspects that do not fit into the classical, which are beginning to explore the principles of the wave, a "step-up 5 - 3 steps down." It is "bad" fifth wave and "wrong" correction (in the second or fourth wave). As shown, the elimination of trade in the fifth wave is justified **. And the use of trade situation, "incorrect" correction is certainly necessary and profitable.
Subjectivism and a lot of variability in the interpretation of the wave of market structures are negative factor for the single investment decision, it is not surprising. The external simplicity and beauty is proportional to wave signs, represented in the graphs, after everything has already happened, that is "post factum", is only the tip of the iceberg, only one of many variations in the interpretation of image patterns. Nevertheless, it should be noted that, as the ability to swim or the ability to ride a bicycle, once osvoennoe the ability to read the market situation in the schedules of ekstremumam (without intermediaries in the form of technical indicators!) Remains for life.
So how about, how to start, how to approach the technical understanding of the market? Or, the trader must leave the interpretation of the market "white noise" to share the financial and media professionals?
You can practice "look" at the market, using "Elwave", with a highlight "of the time" to "the tree of waves (Wave Tree)". Computer programs rely almost everything possible wave signs and possible targets for each option. But ...
Choosing one of many options as a worker, then there is trade, investment decision is to share the user program, which is an investor. We can say only one thing. The choice between different options is desirable to do the wave signs in favor of the option, in which there are harmonious proportional relationship between the pulses and correction at various levels (timeframe) time together. And it is quite difficult, because it is necessary to take into account the entire range of market trends.
Not recommended for beginners to learn the principles of the wave, using their own analytical wave solutions for making investment decisions.
We need some time to:
A) Vosprinyat algorithms wave analysis.
B) No special effort to see on the graphs the difference between the pulses and correct.
B) do so at different levels (timeframe) time.
D) and able to freely use the wave labeling to compare different interpretations of the same schedule and do so at different levels of time.
D) deal on the emerging new extremes schedules at the appropriate levels of time.
Each new extreme supplements and changes the picture on the schedule for the entire previous period and the amount of options, which analysts at Forekse wave of real-time "digest" for the intuitive, subconscious level, sometimes it seems incredible.
You can use a purely technical approach, and through mathematical formulas (indicators) to monitor the wave patterns. Of these formulas of mechanical trading system (MTS), and thus close the question of subektivizme, many variantnosti and responsibility for making investment decisions. Psychologically it is a justifiable approach. But ...
Technical tools for research in this situation are well represented in a computer program of Thomas Joseph "Advanced Gann-Elliott-Trade" *. The program is implemented attempt to duplicate the technical indicators of the development of wave patterns, and in my opinion, as far as possible in principle "to believe algebra harmony", it was done very well in terms of technical analysis.
From the perspective of an investor, this program is a set of technical tools to address the issue: whether to hold the position further in the development of the situation and the trend is over and the market should be close or even deploy. In other words, in my view, the issue: whether the "fifth wave", giving a new extremes in the development of current trends?.
However, whether or not to spend time on the study of any mechanical, correct, "removing" a problem many variantnosti, methods of wave analysis? In my opinion, this impasse, in this case, "along with the water spills child. The main tool of analysis is that your way of thinking and that he should be trained for many variantnosti wave interpretations.
And if you did use the technical indicators for the overlapping of wave oscillations? For many traders, this approach seems to solve the problem. The technical indicator is the mathematical formula for modifying the visual presentation of exchange rate fluctuations on the charts, that is, in essence it should be for exchange rate fluctuations, and repeats them in a modified form. This makes it possible to build, analyze and make use of new dependencies and patterns relating to technical, computerized analysis using different software. And to create mechanical trading system (MTS), allowing the trader unambiguous trading signals. It is not the wave analysis.
This approach is lost objectivity of the analysis of the market and the willingness of the trader to the alternative development of the situation. In doing so, to adjust the MTS still needs to examine the levels of time and constantly optimize the parameters of technical indicators in the market at the level of "major" waves. Methods of calculating targets also need to examine the use of wave terminology. The desire to simplify the wave analysis (through duplication of wave oscillations of technical indicators) greatly complicates the analytical process and resulting kruzhnoy road to wave analysis again.
I think you need to remember the principle of "simple to the complex."
Quote: "Elliott has never explained why the shape of the market are five waves in the development and three waves in the braking. He just presented it as an existing fact." Indeed, this is simply a fact - in that way and has a momentum of correction. In my opinion, you should use a simple approach to assess the situation on the market (or pulse, or remedial), a simple universal trading algorithm simple Fibonacci ratios. And a simple hierarchy (the Russian dolls) image structures, telling about the behavior of the market at different levels (timeframe) time.
Recommended for beginners to learn the market: at the initial stage, to use someone else's analysis or analytical services, comparing their "opinion" on the market between them and constantly monitor "their" level of time **.
And it is necessary that the wave analysis, the analysis of market opportunities, but not its liabilities. Therefore, the criterion of objective analysis (in the selection of analytical services) can serve as analysts use alternative wave signs on the same schedule.
In my opinion, only the market can provide answers to any questions and need to learn their language. History is made up of markets for their extreme values, which are perceived to be remembered and accounted for all the parties, be it journalists, bankers, private investors or the Head of State. The market tells its stories in the language of the dramatic surge ups and downs or catastrophic correction of long-term consolidation.
The momentum and the correction is "ABC", which takes the market to communicate with his players. The momentum correction and the zigzag is the primary language of the elements of the market. A trend, this is the first word, which hears the market participant of the market is just alternating unidirectional impulses and corrections.
_____________
* Elliott Wave Principle Key to Market Behavior ". Robert Rougelot Prechter, Jr and Alfred John Frost. Published by New Classics Library. 20 Anniversary Edition: May 1998.
** How to sell on the waves of Elliott or time to make money. Igor Malinovsky. Activ E-Book. 2004.
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