{"id":48413,"date":"2014-03-12T10:27:15","date_gmt":"2014-03-12T14:27:15","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=48413"},"modified":"2014-03-12T10:27:15","modified_gmt":"2014-03-12T14:27:15","slug":"keys-investor-success-elliott-wave-theory","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/03\/12\/keys-investor-success-elliott-wave-theory\/","title":{"rendered":"Keys to Investor Success – Elliott Wave Theory"},"content":{"rendered":"

By Chris Vermeulen, Technical Traders<\/a><\/strong><\/p>\n

Elliott Wave Theory<\/strong> – Plenty of people will freely offer you advice on how to spend or invest your money. \u201cBuy low and sell high,\u201d they\u2019ll tell you, \u201cthat\u2019s really all there is to it!\u201d And while there is a core truth to the statement, the real secret is in knowing how to spot the highs and lows, and thus, when to do your buying and selling. Sadly, that\u2019s the part of the equation that most of the advice givers you\u2019ll run across are content to leave you in the dark about.<\/p>\n

The reality is that no matter how many times you are told differently, there is no \u2018magic bullet.\u2019 There is no plan, no series of steps you can follow that will, with absolute certainty, bring you wealth. If you happen across anyone who says otherwise, you can rely on the fact that he or she has an agenda, and that at least part of that agenda involves convincing you to open your wallet.<\/p>\n

In the place of a surefire way to make profits, what is there? Where can you turn, and what kinds of things should you be looking for?<\/p>\n

The answers to those questions aren\u2019t as glamorous sounding as the promises made by those who just want to take your money, but they are much more effective. Things like careful, meticulous research. Market trend analysis. Paying close attention to extrinsic factors that could impact whatever industry you\u2019re planning to invest in, and of course, Elliott wave theory. If you\u2019ve never heard of the Elliott wave, you owe it to yourself to learn more about it.<\/p>\n

Postulated by Ralph Nelson Elliott in the late 1930\u2019s, it is essentially a psychological approach to investing that identifies specific stimuli that large groups tend to respond to in the same way. By identifying these stimuli, it then becomes possible to predict which direction the market will likely move, and as he outlined in his book \u201cThe Wave Principle,\u201d market prices tend to unfold in specific patterns or \u2018waves.\u2019
\nThe fact that many of the most successful Wall Street investors and portfolio managers use this type of trend analysis in their own decision making process should be compelling evidence that you should consider doing the same. No, it\u2019s not perfect, and it is certainly not a guarantee, but it provides a strong framework of probability that, when combined with other research and analysis, can lead to consistently good decisions, and at the end of the day, that\u2019s what investing is all about. Consistently good decision making.<\/p>\n

We use Elliott Wave Theory<\/strong> in real time by looking at the larger patterns of the SP 500 index for example. We deploy Fibonacci math analysis to prior up and down legs in the markets to determine where we are in an Elliott Wave pattern<\/strong>.\u00a0 This helps us decide if to be aggressive when the markets correct, go short the market, or to do nothing for example.\u00a0 It also prevents us from making panic type decisions, whether that be in chasing a hot stock too higher or selling something too low before a reversal.\u00a0 We also can use Elliott Wave Theory to help us determine when to be aggressive in selling or buying, on either side of a trade.<\/p>\n

For many, its not practical to employ Elliott Wave analysis<\/strong> with individual stocks and trading, but it can be done with experience.\u00a0 We instead use a combination of big picture views like weekly charts, Wave patterns within those weekly views, and then zoom in to shorter term technical to determine ultimate timing for entry and exit.\u00a0 This type of big picture view coupled with micro analysis of the charts gives us more clarity and better results.<\/p>\n

One of our favorite patterns for example is the \u201cABC\u201d pattern.\u00a0 Partially taken from Elliott Wave Theory<\/strong>, we mix in a few of our own ingredients to help with timing entries and exits.\u00a0 This is where you have an initial massive rally or the \u201cA\u201d wave pattern. Say a stock like TSLA goes from $30 to $180 per share, which it did. \u00a0The B wave is what you wait for and using Fibonacci analysis and Elliott Wave Theory we can calculate a good entry point on the B wave correction.\u00a0 TSLA dropped from $180 to about $ 120, retracing roughly 38% (Fibonacci retracement) of the rally $30 to $180.\u00a0 The B wave bottomed out as everyone was negative on the stock and sentiment was bearish. That is when you get long for the \u201cC\u201d wave.\u00a0 The C wave is when the stock regains momentum, good news starts to unfold, and sentiment turns bullish.\u00a0 We can often calculate the B wave as it relates often to the A wave amplitude.\u00a0 Example is the TSLA \u201cA\u201d wave was 150 points, so the C wave will be about the same or more.<\/p>\n

When TSLA recently ran up to about $270 per share, we were in uber bullish \u201cC\u201d wave mode, and we had run up $150 (Same as the A wave) from $120 to $270.\u00a0 That is when you know it\u2019s a good time to start peeling off shares. Often though, the C wave will be 150-161% of the\u00a0 A wave, so TSLA may not have completed it\u2019s run just yet.<\/p>\n

\"Elliott<\/a><\/p>\n

Knowing when to enter and exit a position whether your time frame is short, intermediate, or longer\u2026 can often be identified with good Elliott Wave Theory practices.\u00a0 Your results and your portfolio will appreciate it, just look at our ATP track record from April 1 2013 to March 3rd<\/sup> 2014 inclusive of all closed out swing positions.\u00a0 We incorporated Elliott Wave Theory into our stock picking starting last April and you can see the results:<\/p>\n

\"ATP<\/a><\/p>\n

Join Us Today And Start Making Real Money Trading – Click Here<\/a><\/h3>\n

Sincerely,<\/p>\n

Chris Vermeulen
\nFounder of Technical Traders Ltd<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Chris Vermeulen, Technical Traders Elliott Wave Theory – Plenty of people will freely offer you advice on how to spend or invest your money. \u201cBuy low and sell high,\u201d they\u2019ll tell you, \u201cthat\u2019s really all there is to it!\u201d And while there is a core truth to the statement, the real secret is in … <\/p>\n

Continue reading “Keys to Investor Success – Elliott Wave Theory”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-48413","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/48413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=48413"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/48413\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=48413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=48413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=48413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}