This is just one man's opinion to the on-line discussion of the Elliott Wave theory by Mr. Stephen Todd. I hope to generate interest and comments from other seasoned market traders, whose experience and insight are probably more valuable than any one of the technical analysis methodologies that traders use.
My comments follow:
If one uses the Elliott Wave theory in conjunction with other technical analytical methods and does not blindly follow any one to the T, one could in fact arm oneself with the arsenal of knowledge and his/her analytical mind (actually, this is the fundamental requirement) to make money in the market. After all, many of the traders out there have made money, and they don't do that by rolling the dice. After all, why are big names like Bill Gates and Michael Dell (among so many) become so rich? They in fact have made more money in stock and options trading than from the companies they own.
The Elliott wave theory has relationship to the human psyche, and thus the more we understand psychology of the masses, the more the cyclical phenomenon becomes predictable.
Stephen Todd is right by saying that there is no absolute crystal ball reading of the exact timing. But then, at the point of exit, the timing really depends on the investor himself or herself. There is a decision to be made solely depending on the investor's need at that moment. As far as the entry point is concerned, yes, we should always trust probability, which is statistics. The general science of bioinformatics is essentially it. The biomedical world is so complicated (e.g., protein structural analysis, polymer conformational analysis, to name a few) and the exact structures (mind you, not just the sequence of amino acids that linked up to form them, but the structural probability of conformation and isomerism) of many high molecular weight proteins may not be 100% precisely known, with our current stage of scientific advancement. Hence, the significance of statistical analysis as to improve the probability of the exact structure and conformation known.
The objectivity here is the striving toward higher and higher accuracy in the human methods of analysis. As long as we do not start out with the expectation of a 100% predictive theory, and as long as we trade the market with discipline and stay objective, it does not matter we predict the timing wrong, so long there is already an exit or repair strategy. There isn't much difference from running a business or making choices in life in general. There is got to be a strategy, a plan and the tactical discipline to go with them.
We lose money in the market because we are overrun by our emotions: fear, greed, conceit, arrogance, just to name a few.
Kreisler has been a scientist in chemistry and materials for all his professional life. He wants to become more proficient in tha market by learning from all the seasoned and experienced traders and investors out there.
Source: www.a1articles.com
