I made some additions to the graphic from earlier today.
Basically what I'm saying is that once you see 5 waves down,
wait and short the oversold bounce back up, which would either be
wave 2 or wave B. That's the objective way to do it, vs
chasing it. This way you allow a top to be put in place vs
trying to pick a top like the armature's who try to
always catch tops. Also you short an oversold bounce so you
can have a tight stop and lower risk, versus chasing a breakdown
that is oversold
This does not work all the time. Can you please explain what
happened in Jun 09 and Jan. 2010 . We had clear 5 wave down ,but we
went back up and made new highs . I realy like to know , and you
guys do a great job teaching us new trades .Looking forward to your
reply.
Actually, you need to understand EW. Those trades worked
out, here's why
You have to understand EW and I talk about this in the write up:
When you have 5 waves down, that move down is either wave A or 1.
Wave A would be a bullish pullback, while wave 1 would be the
bearish case.
However regardless if it's wave 1 or wave A, you will still get
an oversold bounce in wave B or wave 2. Short the oversold
bounce. Now under the bullish case the next pullback would be
wave C, which would still be winning trade, but obviously not start
a major downtrend.
In July 2009 for example, you had an ABC pullback, under my
scenario you would have shorted the wave B bounce, you then got
another decline in wave C. How did that not produce a winning
trade?
See my attached picture
LOL nothing works all the time. Just like buying a
breakout stock doesn't work all the time, buying a bull flag
doesn't work all the time, nothing does.
You miss the point of my write up: The point is, that's
objective and lower risk then shorting after a sell off that takes
out support and now the market is oversold, thus your risk is
higher. When you short an oversold bounce, the market is no
longer oversold and thus your risk is lower and you can have a much
tighter stop. I never said anything about working all the
time.
Read my baseball analogy below, here's a link. Successful
trading is not about winning on every trader, it's about playing
the odds and taking trades with good risk/reward ratio.
Elliot Wave, shorting oversold bounce
Posted by matt on 10th of Feb 2011 at 12:13 am
I made some additions to the graphic from earlier today. Basically what I'm saying is that once you see 5 waves down, wait and short the oversold bounce back up, which would either be wave 2 or wave B. That's the objective way to do it, vs chasing it. This way you allow a top to be put in place vs trying to pick a top like the armature's who try to always catch tops. Also you short an oversold bounce so you can have a tight stop and lower risk, versus chasing a breakdown that is oversold
DAX followed the text book
Posted by iwedat on 10th of Feb 2011 at 05:57 am
DAX followed the text book 5 down & is now heading for 7320ish in C bounce - intraday.
turned slightly - not on
Posted by iwedat on 10th of Feb 2011 at 06:18 am
turned slightly - not on this chart though
Elliot Wave , shorting
Posted by moh007ed on 10th of Feb 2011 at 03:19 am
This does not work all the time. Can you please explain what happened in Jun 09 and Jan. 2010 . We had clear 5 wave down ,but we went back up and made new highs . I realy like to know , and you guys do a great job teaching us new trades .Looking forward to your reply.
Thank you
Actually, you need to understand
Posted by matt on 10th of Feb 2011 at 04:25 am
Actually, you need to understand EW. Those trades worked out, here's why
You have to understand EW and I talk about this in the write up: When you have 5 waves down, that move down is either wave A or 1. Wave A would be a bullish pullback, while wave 1 would be the bearish case.
However regardless if it's wave 1 or wave A, you will still get an oversold bounce in wave B or wave 2. Short the oversold bounce. Now under the bullish case the next pullback would be wave C, which would still be winning trade, but obviously not start a major downtrend.
In July 2009 for example, you had an ABC pullback, under my scenario you would have shorted the wave B bounce, you then got another decline in wave C. How did that not produce a winning trade? See my attached picture
Title: click to expand LOL nothing
Posted by matt on 10th of Feb 2011 at 04:15 am
LOL nothing works all the time. Just like buying a breakout stock doesn't work all the time, buying a bull flag doesn't work all the time, nothing does.
You miss the point of my write up: The point is, that's objective and lower risk then shorting after a sell off that takes out support and now the market is oversold, thus your risk is higher. When you short an oversold bounce, the market is no longer oversold and thus your risk is lower and you can have a much tighter stop. I never said anything about working all the time.
Read my baseball analogy below, here's a link. Successful trading is not about winning on every trader, it's about playing the odds and taking trades with good risk/reward ratio.
Elliot Wave , shorting
Posted by moh007ed on 10th of Feb 2011 at 05:31 am