I've updated the initial entry posting, on Jan. 27, with results (losses), a fresh chart and an updated count, including a thought on the nature of Elliott wave analysis, which I'll reproduce here:
The chart is a textbook example of why Elliott wave analysis should be considered to be a frame, an artificial method of trying to understand a chart, rather than unquestioned truth. The ambiguities on the chart at this relatively small degree are legion.That's a roundabout way of saying that although I find Elliott to be an immensely useful and supple tool, I've found it to be a fickle companion on many occasions. That's why I've begun keeping such tight stop/losses and attempt to hedge my directional plays whenever possible.
- Wednesday's Outcomes: FC, SPY, NGG (posted April 23)
- The Market: Has the apocalypse arrived yet? (posted Jan. 27 and updated April 23)
My shorter-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.
Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading.
Several web sites summarize Elliott wave theory, among them, Investopedia, StockCharts and Wikipedia.
See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.