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

PREFACE

The inspiration for the first edition of this book came about in 2005 and 2006. As you remember it was a bull market nobody anticipated and lots of people attempted to get short and you can’t really blame them. Many of them got their real initiation into financial markets after the Internet bubble popped. All they really knew was being a bear.

Many of the people who embraced methodologies like Elliott and Fibonacci were very bearish. It worked for a couple of years and then it stopped working. Many had no idea why. Truth be told, one of the reasons seasoned traders are able to capitalize on opportunities is because they’ve seen prior bull and bear markets and know how to react at specific times in history. A trader won’t be really seasoned until they’ve been through at least two complete bull and bear cycles. Traders tend to be influenced by what they’ve experienced. Many traders who were around in the middle of the last decade were influenced by the Internet bubble, where everyone made money but few kept it. Others were influenced by the bear and expected it to continue. Once it turned around in 2003, they were ill equipped to deal with a new bull market. The psychology of bear markets suggests traders, policy makers, and the mass crowd psychology overall will be scarred by the experience.

Compounding the problem were traders at the intermediate level who still used lagging indicators like stochastic and MACD. The problem was that the MACD divergences persisted for a long ...