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发表于 2004-11-13 23:05
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·Trading with the Elliott Wave Principle(转贴)
Below you will find a description of how the Elliott Wave Theory can be used to analyse and trade the markets, which could be useful for the beginner.
1. Analysing a market.
Start with a larger timeframe (e.g., a yearly bars chart) to get an estimate of the market conditions (the direction of the long term trend, is it impulsive or corrective, etc.), then move on to the daily and hourly charts. If the daily chart analysis appears to contradict the conclusion you arrived at analysing the yearly chart, use the weekly and monthly charts to judge which conclusion is more likely to be correct and can be your preferred count, but then keep in mind the alternative.
2. Planning your trades.
According to your preferred count you can set up your trades based on one of the trading strategies suggested by Elliott Wave Analysis.
The first strategy is to try to catch a bottom or a top using Elliott Wave Analysis as a forecasting tool. If you think that the bottom/top is in, you enter a trade and place a stop-loss order slightly below/above the price extreme. If your analysis is correct, you can enter a trade right after a reversal thus you can make the most of the move in the direction opposite to the direction of the prior trend. At the same time, the pitfall is that using this strategy you attempt to fight the trend, and what you think is a bottom/top can turn out to be a price extreme of one lesser degree within the larger term trend (e.g., part of an extended impulse that is incomplete yet). Therefore, you could be stopped out at a loss that exceeds your initial stop-loss level in the case of a gap in the direction of the prevailing trend. This strategy will probably work better if you trade a larger timeframe, and the number of your trades is relatively small, trading intraday with this strategy you could be stopped out too often. Figure 1 illustrates this strategy: Trade 1 is an attempt to profit from a correction to the preceding impulse move, Trade 2 is an attempt to catch the beginning of a possible impulse move in the direction of a larger term trend. Trade 1 is more risky since it fights the larger term trend. Trade 2 is in the direction of a larger term trend, still it fights the short term trend.
The second strategy is the trend following one. In this case you enter a trade only after a corrective move upon a break in the direction of the preceding impulse move. Figure 2 illustrates the second trading strategy: Trade 1 is an attempt to profit from a zig-zag correction to the preceding impulse move of one larger degree by trading the second move down (wave ^c^), Trade 2 is an attempt to trade wave 3 of a possible impulse move in the direction of the larger term trend. Both trades are in the direction of the short term trend, which is an advantage of this strategy. A disadvantage is that you miss the first move which sometimes can be quite big relative to the rest of the waves in the move that we are going to trade (given that even wave 3 is not always the longest wave (while never the shortest) within an impulse, not to mention that wave ^c^ (Trade 1 example) could also be too short and not worth initiating a trade). A further explanation of a possible market timing strategy based on the second strategy described above can be found here.
To sum up, the first strategy is the more risky one, the second one is probably less profitable. Still, both strategies can be utilized using a proper money management technique to manage risks. Which one to choose should depend on your risk tolerance, leverage, money management style and the degree of confidence that your current market analysis is correct.
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