Less is more...If you don't know me, I have been a trader a very long time. Nearly 25 years to be exact.
Over the years, I have spent a lot of time studying a wide array of techniques, tools, patterns and market sentiment. Lucky enough, the markets have also been very kind to me.
I've been fortunate enough to have two trading books published by large traditional publishing companies. So it's safe to say, I live and breathe trading.
I am going to do a series of posts here covering a couple of key educational topics - starting with Elliott Wave theory.
When it comes to Elliott Wave theory, there seems to be a love hate relationship for many people. Some get it, some see it as not relevant. To be honest, both are correct.
Now before you jump on the high horse "it doesn't work for crypto" - let me start by saying, this is not a lesson on how to use Elliott Theory. I covered that in these posts below;
And step two;
In terms of using Elliott, it's not as simple as trying to figure out each and every move. (this is often why, it does not work.) Instead the benefit of Elliott, is to accept it as a bias tool that aids in understanding the current market sentiment.
We often see posts online about things like the Wall Street cheat sheet. I also covered this in another post here on @TradingView
Where the theory has any real value, is simply to obtain a bias. The market is always searching for liquidity. In order to obtain liquidity, the market needs to attract players for the game.
Now, you have probably entered a trade and felt almost immediately that the market has pushed against you, it's out to get you and the brokers are playing 1 vs 1 against you.
This is where sentiment really comes in.
As a retail trader you have likely been exposed to tools such as RSI, MACD or even dabbled with Elliott and Wyckoff. But the reason the market does, what the market does, is not to get you as an individual, instead it's there to collect liquidity from a crowd.
Elliott wave theory isn't a technical tool, it's a sentiment tool.
So instead of trying to guess every internal and nested swing, you can make an awful lot of money by simply giving a directional bias.
I wrote an article in 2021 here -
About the emotions, I used the Simpsons to get the point across. The general idea is to understand where liquidity is likely to be and use that to make informed trading decisions.
If you have any specific questions, even topics you would like covered, leave a comment below. I'll add to this in another post as part of this series.
Stay safe and wish you all the best.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
