Breakthrough Strategies for Predicting Any Market: Charting Elliott Wave, Lucas, Fibonacci, Gann, and Time for Profit, 2nd Edition

CHAPTER 2

Elliott Waves

Now that we’ve covered the basic Elliott Wave structure, it’s time to take this methodology to a whole new level. What this chapter is designed to do is show you how to work with wave counts based on the time dimension. We know that Elliott is very subjective. The best part of working with these time relationships is they are easier to recognize than counting the waves. Wave counts are difficult pattern-recognition systems because wave counts continue to evolve over a period of time. When we keep track of the time element, we follow repeatable tendencies that are simple to recognize if you know what to look for. In this chapter I’ll teach you how to confirm a wave count using the time bars.

Put up a count of the Dow from 2002 to 2006 and you are liable to get as many different variations as there are Elliotticians in the room. As we know, the count has been so complex we may not even be able to get a good count. The academic community may enjoy this exercise, but how can you make money with that sort of information?

The simple answer is, you can’t. What’s more important, it really doesn’t matter. As discussed in the prior chapter, we know there are certain rules we must follow for the structure of markets. We aren’t following those rules so we can get an A on a college final exam. We follow the rules so we have an idea what a market can do from any point in time. If we don’t have a strong foundation of discipline, there is very little chance we are ever ...