Elliott Wave Trading Discussion - Page 1318 - DailyFX Forex Forum

justy10125 · #**19756** (**permalink**) 10-15-2009, 08:47 AM

Quote:

Originally Posted by ravno

Hey, justy, i was already about to close down my computer and went away to the city but then i saw your chart. Please, don't do that again

Here are some ideas to be considered, which i decided to share on the fly..

By the way, nice to see you again!
Though, it could be that i simply missed your presence here, as i lately don't show up so often as before ...

My apologies... Next time I'll try to consult with your schedule before trading... Ha Ha!

Good to see your posts again as well.

-Justin

Sean Hyman · #**19757** (**permalink**) 10-15-2009, 08:48 AM

Update on the GBP/JPY chart. Minimum target met & exceeded.

justy10125 · #**19758** (**permalink**) 10-15-2009, 08:54 AM

Quote:

Originally Posted by Sean Hyman

Update on the GBP/JPY chart. Minimum target met & exceeded.

Hi Sean,

Nice work on your analysis!

It looks as though the JPY crosses are all finally on the move. The chart below is old, but I think it shows what the long-term picture is for the JPY. I think this current trend (JPY cross buying) will probably last for several weeks at least, possibly a few months before the next major round of selling gets underway.

What's your opinion?

Sean Hyman · #**19759** (**permalink**) 10-15-2009, 09:35 AM

Quote:

Originally Posted by justy10125

Hi Sean,

Nice work on your analysis!

It looks as though the JPY crosses are all finally on the move. The chart below is old, but I think it shows what the long-term picture is for the JPY. I think this current trend (JPY cross buying) will probably last for several weeks at least, possibly a few months before the next major round of selling gets underway.

What's your opinion?

Justy, thanks. It wasn't quite as "pretty & text book" as I like...but it did end up coming to pass and meeting its target (and then some).

I love chart patterns.

Ilovepippin · #**19760** (**permalink**) 10-15-2009, 09:36 AM

Quote:

Originally Posted by justy10125

That isn't even close to being a correct statement on a few different levels.

First off, the majority of market participants are usually wrong (something like 90%). That means individual traders and investors, guys on the exchange floors, big trading desks, hedge/mutual funds, etc. And included in that list are the people who participate in these online forums. We are no better or worse than any other group of traders. So when you see a group of people come to a consensus, statistically there is a good chance that the consensus is wrong. So logically, when there is an overwhelming consensus, there is a higher probability of success through fading that group than going with it. In addition to that, observing the forums for mood changes isn't completely about looking to fade the consensus. It's also about taking a look at the individual psychology and the shared crowd psychology as markets ebb and flow. If you pay attention and read between the lines you can observe the confidences, frustrations, confusions, and many other things about what people are going through at different stages of their trading. This information is invaluable not only for trading decisions but just as a learning tool to better my own trading & analysis and market knowledge.

Second, Elliott Wave isn't a contrarian approach to market analysis. EW is simply a description of how financial markets work. By identifying the fives and threes we are able to determine when the market participants in the aggregate are buying and selling financial products. From that information we can formulate opinions on whether or not conditions are right for taking a trade or to help determine in which direction the market may be headed. By definition, contrarian means to take an opposing view. So say for instance, that you identify a market as being in a third wave rally. A third wave is impulsive and tells us that the majority of participants are getting involved in that move. So if you were to take a trade in the direction of that third wave you are clearly trading with the crowd, which obviously isn't contrarian.

I am talking about market extremes, in wave 3's everybody is on the bandwagon. In wave 5's EW will call for a turn where mainstream is betting the house on an everlasting bullmarket.

Sean Hyman · #**19761** (**permalink**) 10-15-2009, 09:45 AM

Quote:

Originally Posted by Ilovepippin

I am talking about market extremes, in wave 3's everybody is on the bandwagon. In wave 5's EW will call for a turn where mainstream is betting the house on an everlasting bullmarket.

Yet a 5 is still in an uptrend and that can still extend. Might be better to wait for a B, or waves 2 or 4 in the new trend. All of those position you with the money flow/order flow and not against it.

Just something to consider. Seems that everyone's infatuated with catching the 5 top.

I'd think it better to use wave counts with the trend's direction/momentum and increase your odds. At least that way you're not swimming upstream against the river's current.

justy10125 · #**19762** (**permalink**) 10-15-2009, 09:59 AM

Quote:

Originally Posted by Ilovepippin

I am talking about market extremes, in wave 3's everybody is on the bandwagon. In wave 5's EW will call for a turn where mainstream is betting the house on an everlasting bullmarket.

The traders who participate in online forums are also a part of the mainstream. Just because we use the EW Theory as the basis for our trades doesn't mean that we are some sort of higher caliber traders. All of us here are just as susceptible to the emotional and other psychological factors that are also affecting the rest of the mainstream. So by analyzing the forum as a whole you are in a way analyzing the mainstream and can therefore gain valuable information as to what's going on.

As far as DailyFX forums go, the EW specific forum is by far the best place to observe those mood swings. If you read through the other strategy and currency-specific rooms you can see that they are bogged down with all the talk of fundamental type things that can sometimes cloud the true feelings of the traders. In the EW pages though, it's all about the charts and people's raw opinions on the markets. This is an ideal place to observe how trader emotion can dictate trader actions. We are all susceptible of it. By paying attention to what people are saying and doing you can clearly see how trader emotion can override rationality.

And so what is the point of all of this? Nobody is immune from emotions based trading, but the next best thing is to be aware of it and how it affects people so that in your own trading/analysis you can develop methods to fight against it. And for me, one of the best ways to do so is by observing these forums.

Ilovepippin · #**19763** (**permalink**) 10-15-2009, 10:07 AM

Quote:

Originally Posted by Sean Hyman

Yet a 5 is still in an uptrend and that can still extend. Might be better to wait for a B, or waves 2 or 4 in the new trend. All of those position you with the money flow/order flow and not against it.

Just something to consider. Seems that everyone's infatuated with catching the 5 top.

I'd think it better to use wave counts with the trend's direction/momentum and increase your odds. At least that way you're not swimming upstream against the river's current.

I am talking in general, not the current market situation.
As I said earlier, trying to catch the top is a bad strategy.

Sean Hyman · #**19764** (**permalink**) 10-15-2009, 10:11 AM

Quote:

Originally Posted by justy10125

The traders who participate in online forums are also a part of the mainstream. Just because we use the EW Theory as the basis for our trades doesn't mean that we are some sort of higher caliber traders. All of us here are just as susceptible to the emotional and other psychological factors that are also affecting the rest of the mainstream. So by analyzing the forum as a whole you are in a way analyzing the mainstream and can therefore gain valuable information as to what's going on.

As far as DailyFX forums go, the EW specific forum is by far the best place to observe those mood swings. If you read through the other strategy and currency-specific rooms you can see that they are bogged down with all the talk of fundamental type things that can sometimes cloud the true feelings of the traders. In the EW pages though, it's all about the charts and people's raw opinions on the markets. This is an ideal place to observe how trader emotion can dictate trader actions. We are all susceptible of it. By paying attention to what people are saying and doing you can clearly see how trader emotion can override rationality.

And so what is the point of all of this? Nobody is immune from emotions based trading, but the next best thing is to be aware of it and how it affects people so that in your own trading/analysis you can develop methods to fight against it. And for me, one of the best ways to do so is by observing these forums.

Justy, great points. Here's something else to consider too. If you can look for "5 waves up" on any pair...why not look for them on the ones with the strongest underlying fundamentals such as the AUD.

Australia was among the first to add jobs, hike rates, benefit from the rise in gold prices, etc. Seems to me to be a great candidate to look for a 5 waves up than a pair that doesn't have as much going for it fundamentally.

justy10125 · #**19765** (**permalink**) 10-15-2009, 10:12 AM

Quote:

Originally Posted by Sean Hyman

Yet a 5 is still in an uptrend and that can still extend. Might be better to wait for a B, or waves 2 or 4 in the new trend. All of those position you with the money flow/order flow and not against it.

Just something to consider. Seems that everyone's infatuated with catching the 5 top.

I'd think it better to use wave counts with the trend's direction/momentum and increase your odds. At least that way you're not swimming upstream against the river's current.

Not only does trading waves (3), (5), and (C) keep you in the direction of the one larger trend, but those waves also offer the best stop placement options.

justy10125 · #**19766** (**permalink**) 10-15-2009, 10:17 AM

Quote:

Originally Posted by Sean Hyman

Justy, great points. Here's something else to consider too. If you can look for "5 waves up" on any pair...why not look for them on the ones with the strongest underlying fundamentals such as the AUD.

Australia was among the first to add jobs, hike rates, benefit from the rise in gold prices, etc. Seems to me to be a great candidate to look for a 5 waves up than a pair that doesn't have as much going for it fundamentally.

Yeah, I agree. As a trader you want the stars to align as much as possible, so if you have five waves and good fundamentals then you will have all sorts of traders trading in your direction helping to push prices where you want them. Plus, during five-wave moves the oscillators are generating the best and clearest signals, so you have a lot of technical type traders helping out as well. So all in all, from a purely market mechanics viewpoint the odds would sit directly in your favor in a situation like that.

Bignatx · #**19767** (**permalink**) 10-15-2009, 10:21 AM

Thx Qsx and Brad. Great call.

Edward16 · #**19768** (**permalink**) 10-15-2009, 10:37 AM

Quote:

Originally Posted by Ilovepippin

I am talking about market extremes, in wave 3's everybody is on the bandwagon. In wave 5's EW will call for a turn where mainstream is betting the house on an everlasting bullmarket.

Hello I lovpipin,
I was not talking about the wave 3's or 5's.
I was referring simply to crowd psychology and that's what EW is all about.
We here at the forum are part of the crowd.
You know the rest!
I think everybody is expecting a turn around at the current levels (ie,EurUsd)
and so traders keep shorting and trying to catch the top. But every time a trader enter a short position market reacts the other way around.

Cheers,
Ed,

Bignatx · #**19769** (**permalink**) 10-15-2009, 10:54 AM

Quote:

Originally Posted by Bignatx

Thx Qsx and Brad. Great call.

O an Sean You to.

Ilovepippin · #**19770** (**permalink**) 10-15-2009, 10:56 AM

Quote:

Originally Posted by justy10125

Not only does trading waves (3), (5), and (C) keep you in the direction of the one larger trend, but those waves also offer the best stop placement options.

Okay, but there are some caveats to consider:

- People on EW forums sometimes post just to get an opinion on their counts. The count they post might not be the count that they are trading on.
- Wave 5's can truncate, they can also extend, so it is hard to set a target.
- In market extremes, ellioticians are mostly contrarians, (like now for instance EWI is contrary to mainstream) if you are contrarian to contrarians in these market extremes, you are with mainstream. (mainstream is calling for the end of the dollar, ellioticians are calling for a near term bottom). Now, this is not personally projected towards you, because you follow EW, so you would see that as well.

- 90% of the people lose money while trading forex, that is different than 90% of the people being wrong about the market. One can be 100% right about the market and still lose money on a trade, and vice versa.

- On a forum it is hard to identify who is who, real names are rarely given. You cannot determine if what people are writing is really what they think, maybe they are just trying to stir something. For me, but that is personal, if I want a mainstream view I turn on Jim Kramer or Bloomberg and see what they have to say.

Anyway, that is just my opinion.