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Discussion of article "The Implementation of Automatic Analysis of the Elliott Waves in MQL5" - page 2

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jamesw
6
jamesw  

This is a great article containing great descriptions and detailed explanations. A real and usable article. I think the author garnered even higher respect with his programming as well as his ability to structure and cluster data.

I think that elliot wave can be really useful. I would be looking further at this in the coming days as I have to install the who package first.
mandelbrot
4
mandelbrot  

Hi Roman, seems that there are bugs in the code especially regarding wave finalization - it tends to be always [A], (A), [a], (a) and so on) - very conservative.

Also for EUR / USD dayly with 365 days history from now notice incorrect (A) (B) (C) correction right after this May's highs  (order is reverse pricewise). Did you have a chance to upgrade with more Elliot rules such as Fibonacchi, wave extention, expanded flat etc. ?

Sergey Golubev
Moderator
100383
Sergey Golubev  
3 Methods to Identify Trend Resumption (based on dailyfx article)

  • Why Focus on Trend Continuation?
  • What Does A Common Correction Look Like?
  • How to Identify the End of a Correction & Resumption of Trend?

Traders often love to trade a good story. Who blame them? Few things are as exciting as a story that makes sense and price action that mathes the story as you collect the pips.

Why Focus on Trend Continuation

Trend continuation is where a majority of trend traders enter trades and make money. However trends correct or end. This even develops with trends that come with great stories.

However, trends come to an end. Even if the trend will eventually resume, which we hope it does, trends will at least temporarily correct as profits are taken. This is where the uncomfortable discipline of patience becomes a must as trend traders wait out the correction before the trend resumes.

What Do Common Corrections Look Like?

Corrections can take many forms. The most common correction is known as a 3-wave correction or zig-zag in Elliott Wave terms but there are more complex corrections as well. The more complex corrections are known as triangles.

Trend traders are right to fear complex corrections like a triangle. Correction often due trend traders little favor but to waste time and eat up capital as they hope to catch a breakout. Thankfully, there is a simple correction that is easy to spot and easy to wait for it to break that was earlier introduced as the zig-zag correction. If a correction is not easily recognize, it is often best and most profitable to leave it along until a clear breakout develops.

How to Identify the End of a Correction & Resumption of Trend?

There are 3 ways that can help you confirm the end of a correction. While none of these are guaranteed to bring about an incredible trend resumption, they will signal that the momentum is back with the trend. The three methods listed in order of least aggressive to most aggressive are; price breaks of a corrective highs in an uptrend or corrective lows in a downtrend, corrective price channel breaks, and an RSI-break back in the direction of the prior trend.

Closing Thoughts

For most traders, correction are better left alone. It’s important that you have patience to trade well and now you know multiple tools to help you identify trend continuation. Once the correction is over and the trend has resumed, make sure you manage your risk!

Sergey Golubev
Moderator
100383
Sergey Golubev  

Keys to Investor Success - Elliott Wave Theory (based on thetechnicaltraders article)

Elliott Wave Theory - Plenty of people will freely offer you advice on how to spend or invest your money. “Buy low and sell high,” they’ll tell you, “that’s really all there is to it!” And while there is a core truth to the statement, the real secret is in knowing how to spot the highs and lows, and thus, when to do your buying and selling. Sadly, that’s the part of the equation that most of the advice givers you’ll run across are content to leave you in the dark about.

The reality is that no matter how many times you are told differently, there is no ‘magic bullet.’ There is no plan, no series of steps you can follow that will, with absolute certainty, bring you wealth. If you happen across anyone who says otherwise, you can rely on the fact that he or she has an agenda, and that at least part of that agenda involves convincing you to open your wallet.

In the place of a surefire way to make profits, what is there? Where can you turn, and what kinds of things should you be looking for?

The answers to those questions aren’t as glamorous sounding as the promises made by those who just want to take your money, but they are much more effective. Things like careful, meticulous research. Market trend analysis. Paying close attention to extrinsic factors that could impact whatever industry you’re planning to invest in, and of course, Elliott wave theory. If you’ve never heard of the Elliott wave, you owe it to yourself to learn more about it.

Postulated by Ralph Nelson Elliott in the late 1930’s, it is essentially a psychological approach to investing that identifies specific stimuli that large groups tend to respond to in the same way. By identifying these stimuli, it then becomes possible to predict which direction the market will likely move, and as he outlined in his book “The Wave Principle,” market prices tend to unfold in specific patterns or ‘waves.’

The fact that many of the most successful Wall Street investors and portfolio managers use this type of trend analysis in their own decision making process should be compelling evidence that you should consider doing the same. No, it’s not perfect, and it is certainly not a guarantee, but it provides a strong framework of probability that, when combined with other research and analysis, can lead to consistently good decisions, and at the end of the day, that’s what investing is all about. Consistently good decision making.

We can use Elliott Wave Theory in real time by looking at the larger patterns of the SP 500 index for example. We can deploy Fibonacci math analysis to prior up and down legs in the markets to determine where we are in an Elliott Wave pattern. This will help us decide if to be aggressive when the markets correct, go short the market, or to do nothing for example. It also prevents from making panic type decisions, whether that be in chasing a hot stock too higher or selling something too low before a reversal. We also can use Elliott Wave Theory to determine when to be aggressive in selling or buying, on either side of a trade.


For many, its not practical to employ Elliott Wave analysis with individual stocks and trading, but it can be done with experience.

Knowing when to enter and exit a position whether your time frame is short, intermediate, or longer… can often be identified with good Elliott Wave Theory practices. Your results and your portfolio will appreciate it

Sergey Golubev
Moderator
100383
Sergey Golubev  

Forum on trading, automated trading systems and testing trading strategies

Something Interesting to Read March 2014

newdigital, 2014.03.13 09:30

The Wave Principle

by Ralph Nelson Elliott



The Elliott Wave Principle is a form of technical analysis that some traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors. Ralph Nelson Elliott, a professional accountant, discovered the underlying social principles and developed the analytical tools. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves. Elliott published his theory of market behavior in this book "The Wave Principle". Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable."


ThemBonez
37
ThemBonez  
I would love a version of this for MQ4
12
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