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The rule works but is it usable in real time?
03-04-2010, 08:22 AM (This post was last modified: 03-04-2010 08:23 AM by theoryman.)
Post: #1
The rule works but is it usable in real time?
Consider two completely different situations.

The first is when a clear High turning point has already occured.

1 The last 5th is there, so the 4C can be placed.

2 The RTB will be easy to identify.

3 Decide on a place where the 3rd ends.

4 Put in the A.

5 Split the 3rd, making sure the 3rd is not shorter than the 1st and 5th. This is most easily achieved by introducing a short 1.

The rule works.

-------------------------------------------------------------------

Now try going the other way.

1 Waves 1,2 and 3 are there, wave 3 > wave 1, so it frees up the 5th.

2 Wave A appears.

3 The retrending occurs BUT is it just sub-wave a of the B; with c to follow OR is it the whole of B? (Is it a 3 or 5 or I can't tell?)

4 The move down appears. I can see it so it might be the C to go with the whole B OR it might be the sub-wave b. (Is it a 3 or 5? I can't tell!)

5 A lovely move up appears. Is it the 5th or the c subwave of the RTB. Only time will tell.......

-------------------------------------------------------------------

The key events needed are the confirmed end of the RTB and the end of the 5th that follows.

That 5th though contains its own 5th, so I can't have confirmation until that sub-wave is over but.......

In NEWR the final 5th has no limitations, so just when it looks like it is grinding to a halt, it can kick off again.

If you can count perfectly and the data allows it, then it's not a problem. In reality, real time data is open to misinterpretation and sometimes hides the detail which is vital.

I can only be sure the 5th is over when I can see it is but when I can see it is, I already know it's over. The longer I wait the clearer the picture becomes.

How long should I wait before I really know it's over?
How much space is there left in the retracement?
Is it worth the risk....?

cheers theory Huh
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03-04-2010, 09:32 AM
Post: #2
RE: The rule works but is it usable in real time?
(03-04-2010 08:22 AM)theoryman Wrote:  Consider two completely different situations.

The first is when a clear High turning point has already occured.

1 The last 5th is there, so the 4C can be placed.

2 The RTB will be easy to identify.

3 Decide on a place where the 3rd ends.

4 Put in the A.

5 Split the 3rd, making sure the 3rd is not shorter than the 1st and 5th. This is most easily achieved by introducing a short 1.

The rule works.

-------------------------------------------------------------------

Now try going the other way.

1 Waves 1,2 and 3 are there, wave 3 > wave 1, so it frees up the 5th.

2 Wave A appears.

3 The retrending occurs BUT is it just sub-wave a of the B; with c to follow OR is it the whole of B? (Is it a 3 or 5 or I can't tell?)

4 The move down appears. I can see it so it might be the C to go with the whole B OR it might be the sub-wave b. (Is it a 3 or 5? I can't tell!)

5 A lovely move up appears. Is it the 5th or the c subwave of the RTB. Only time will tell.......

-------------------------------------------------------------------

The key events needed are the confirmed end of the RTB and the end of the 5th that follows.

That 5th though contains its own 5th, so I can't have confirmation until that sub-wave is over but.......

In NEWR the final 5th has no limitations, so just when it looks like it is grinding to a halt, it can kick off again.

If you can count perfectly and the data allows it, then it's not a problem. In reality, real time data is open to misinterpretation and sometimes hides the detail which is vital.

I can only be sure the 5th is over when I can see it is but when I can see it is, I already know it's over. The longer I wait the clearer the picture becomes.

How long should I wait before I really know it's over?
How much space is there left in the retracement?
Is it worth the risk....?

cheers theory Huh

We should call that, "The Traders' Lament".

Do you happen to trade Forex? Because then you have to also get
some sleep and of course you know the odds on the pivot happening
while you are sleeping is about 99:1.

Do you ever wonder why you even bother? I sure do!

Smile

TS Hennessy
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03-04-2010, 10:21 AM (This post was last modified: 03-04-2010 10:26 AM by ruby.)
Post: #3
RE: The rule works but is it usable in real time?
Yes, if you trade forex, living in Europe is of great advantage :-)

For daytrading currencies, I think looking at Bollinger Bands is more effective than EW. It's also more fun to watch the teams trying to recapture the center line - it's like soccer.
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03-04-2010, 12:32 PM (This post was last modified: 03-04-2010 12:34 PM by theoryman.)
Post: #4
RE: The rule works but is it usable in real time?
Tom,

That last bit was typed very much "tongue in cheek" and was not intended as a lament or a whinge of any description.

Maybe I should have enclosed the last bit between bracket i bracket and bracket /i bracket, where i represents; to be read in an ironic manner rather than italic.

I can only be sure the 5th is over when I can see it is but when I can see it is, I already know it's over. The longer I wait the clearer the picture becomes.

How long should I wait before I really know it's over?
How much space is there left in the retracement?
Is it worth the risk....?


On a more serious note, I am sure we would all welcome you labelling an instrument of your choice; where you update the count before the start of the next trading day.

That way we could all see how you react, and if necesssary, adapt/alter the count as events reveal themselves over time.

cheers theory
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03-04-2010, 02:10 PM
Post: #5
RE: The rule works but is it usable in real time?
(03-04-2010 12:32 PM)theoryman Wrote:  Tom,

That last bit was typed very much "tongue in cheek" and was not intended as a lament or a whinge of any description.

Maybe I should have enclosed the last bit between bracket i bracket and bracket /i bracket, where i represents; to be read in an ironic manner rather than italic.

I can only be sure the 5th is over when I can see it is but when I can see it is, I already know it's over. The longer I wait the clearer the picture becomes.

How long should I wait before I really know it's over?
How much space is there left in the retracement?
Is it worth the risk....?


On a more serious note, I am sure we would all welcome you labelling an instrument of your choice; where you update the count before the start of the next trading day.

That way we could all see how you react, and if necesssary, adapt/alter the count as events reveal themselves over time.

cheers theory

No but these are good comments.

It matters not how you meant that to me because those are actual
results and legitimate feelings which I can identify with on their face.

They really are real, in other words. They come from attempting to do
something new and it is anything but easy.

I can understand that you want to see me post some charts but will
that help you to do this in real time? I actually know better from real
time experience.

I suggest that to do this in real time you make certain that you clearly
understand the NEWR and then use multiple timeframes to keep track of
things while you practice with tick charts for each internal.

If you are putting money on the line and you are still in practice mode
then keep it light, my friend.

The other day I was telling a friend about a recent move which I had
counted as being over soon. It was on the Eur/Jpy. I used a tick chart
once I got to the 5th of 5th etc etc.

I was looking for one more 5th on the tick but I had missed a small
detail. When it ran away I realized that it was over and I was a tad
late. That was on a tick chart though so it was not too late, just not
perfect.

It has been a while but I consider of myself that, "I've still got it". The
difference between art and science is perhaps in similar fashion the
difference between application and theory.

Having some idea in mind is not the same as having it in your fingers. My
theory is that there must be practical application with mistakes before
we ever truly have learned anything. It goes without saying that this
must be done alone and for oneself.

However we at least can relate and socialize and not be doing this by
ourselves. There are some signposts already here and they will be
updated at intervals but if anyone wants to post counts very frequently
that would be fine with me.

The forum is here for that reason. You would probably think this is funny
but I did not think about a forum until about 2 weeks before the book
was ready to be published. When it occured to me then I thought, "Well
of COURSE the traders will want to discuss this!". So I had to hurriedly
put both things together at the same time.

Smile

TS Hennessy
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03-05-2010, 01:37 AM (This post was last modified: 03-05-2010 01:54 AM by Steely Dan.)
Post: #6
RE: The rule works but is it usable in real time?
Theory,

As you know I'm going through the same growing pains as yourself. Perhaps it's worth summarizing my observations (thus far) in a single post.

1) , your observation as to how much easier it is to work backwards retrospectively. Well a cynic once remarked that Elliott was very clever in constructing a set of rules which were so loose that they could always be applied retrospectively. I could observe that Tom is also very clever as with the new rule always really is ALWAYS - I have seen enough to be convinced of this.

2) The inbuilt ambiguity of the count going forwards; Perhaps due to human limitations it is best to find a candidate RTB on at least a 15 minute timeframe because as you work your way down degrees you have more chance of getting a favourable risk/reward trade before human error or a bad tick trips you up.

3) It's an understandable temptation to find top or bottom pivots, but perhaps this is like looking for the holy grail - better to take set-ups with a split stake, one with a short target and the other on the off chance you get to hit it out of the ball park.

4) It is best to wait for confirmation instead of front running because I thus far have found no consistent pattern of distance between the C of 4 wave low as you go down degree levels - it would be nice if it did and could be a rule, but I saw the ASX pull up 1 point short of confirming a trade only to reverse 100 in the other direction.

5) Tom mentioned looking at multiple timeframes at the same time; Personally I would look at a similar market too because if there is a reasonable correlation what you may miss on one market may be more visible on another, also when you miss a trade entry on one market the other may give you a better entry at least in a narrow time window.

Edited to add another point.

6) Perhaps instead of looking for RTB 4th waves it may be easier to establish where a 4th wave is not an RTB and use this negative inference to trade with the prevailing trend.
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09-22-2010, 05:53 AM (This post was last modified: 09-22-2010 05:57 AM by peternz.)
Post: #7
RE: The rule works but is it usable in real time?
I know this is a late entry but having just come through this very issue I would like to make a reply.
The rule of certainty for trading is that when the result of a trade is certain it is ALWAYS too late to make the trade. so we can't trade certainty successfully at least directly. What we can certainly trade is probability.

trading probability has certain traits that don't apply to trading certainty, the major one being that the result of any particular trade is of little concern because losing trades are part of the picture and you are trading for a NET gain over a period of time.

For example if you had a method that gave you $1:50 when you tossed a coin and it came up heads and lost $1:00 for tails then why would you even care about a particular throw all you are interested in is throwing it as often as possible so as to make the NET profit more certain and bigger.

Lets take the runaway 5th you mentioned, You have a method that profits when it doesn't You know that it can but you may have established that most of the time it doesn't. Provided that your reward to risk is high enough you can simply take the loss when it does and the profit when it doesn't. Then study the losing trades to see if you can recognize them and filter them out without affecting your profitable ones.

The main focus is to trade exactly according to a method that you have got statistics for. I now give NAMES to every trade I make and have a set of rules to follow for entry and stop/limit management and bailout strategies. I can then enter these trades into a spreadsheet which can then look at the historical results ie win/loss and reward vs risk and calculate the max no. of contracts to place according to my account balance and risk strategy. I then subtract the current No. of active contracts and whats left is available for that trade.

Another one could be that you know the 3rd wave exceeds the 1st wave. So if you have a method that gives profit when that occurs, but if you get the wave count wrong you can lose, then provided that you get enough profit wrt to loss you don't NEED to get it right all the time. But if your method for counting gets it right most of the time and your profit is larger that your risk you can have a high level of CERTAINTY that you WILL make a NET profit over a period of time.

So don't wait for certainty just develop your method get statistics for it, follow it's rules and keep pressing the button (KEEPING WITHIN you money risk management like never risk more than 5% of you account at any point in time).

NB It's taken me over a year to reach this point, it requires more work but it's what makes the difference at least for me. For example with this NEWR the primary requirement is to be able to count the waves both historically and at the right hand edge and over multiple time frames. Then simply TRACK the waves as they unfold until your confidence grows then look for an edge develop a method and trade it. This rule although I thought it was over rated on the cover to start with actually has amazing implications one of which is that it becomes easier to establish a method with a high probability provided you can count the waves reasonably well, which also now becomes a lot easier.

Hope this helps
Peternz
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