Monday, July 03, 2006

Some thought on the 'Waves'

I believe there are profitable Elliot wave traders out there. No doubt. Though I have never met any of them yet. In fact, I have met a lot of wave analysts, not trader. I am not an wave trader and I definitely do not have bad feeling towards these wave analysts, I just have the feeling that they have complicated trading unintentionally. They are trying to view the market in a different, maybe, creative way. But, they create the confusion at the same time.
Trading should not be so difficult (after all, you are buying something with good potential upside and sell it when it is in high demand). And wave, to me, is sometimes over subjective and the element of prediction or you call it forecasting is too strong. Being always objective is difficult but it is necessary for trading. I have come back to the same point, straight trend line, support and resistance line are in fact enough for you to trade profitablely. I have never believe in market prediction in my whole trading life. To trade, I prefer to face the fact, what is happening in front of my eyes. Accept the fact, and act on it.
I have the same feeling towards Gann's stuffs as well. If you are confused, not sure about which wave you are in now, why bother to spend your time struggling on these waves?
Make trading simpler, and trade better.

4 comments:

TopTrader said...

E wave is a powerful concept and forecasting tool based on my experience! Can take it as a reference at least. But my basic trading approach is trend plus chart pattern, coupled with E wave sometimes.

Anonymous said...

Sometimes you right but we must remember if we dun understand something, we must strive to learn and understand it. True to what toptrader said, e-wave coupled with indicators and fibo could be quite a powerful tool. For me i use wave to forecast direction and determine my entry positions for bluechip stocks. One mistake i made is to share my studies with a pessismtic bunch...not very condusive for a learning environment and all round development i must say.

Gav said...

Exactly, if we don't understand something, we have to learn, no doubt about this point. E-wave works for some traders, no doubt also. However, this is not an essential part of technical analysis, I categorize this theory as an 'add-on' or value added for overall technical analysis studies. Good to know, but if it confused your over strategy, leave it alone.

btw, do you guys have any books to share it here? I will list out the title on the website later.

Anonymous said...

yeah, i followed ur advice and bought guppy's. But im more into story books instead of theoretical studies; Reminiscence of a stock operator, hedgehogging, Market Wizards.

Other books, Mcmillan on options(still so hard to understand), Trading to win, psychology of mastering the markets by ari kiev, Trend following by covel and bulkowski's, encyclopedia of chart patterns. Im currently reading fischer's the new fibonacci trader