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Emini S&P Trading Using Elliott Wave Principle


Hi all.

I am new to the forum and have started this thread to discuss trading the E-mini using the Elliott Wave Principle. I desire a high quality discussion.

I have attached the daily chart containing my operative count as a starting point of the discussion. I believe that the decline from 1216.5 was a Leading Diagonal rather than a 5 wave decline. We are currrently working minor wave 2 up in a zig-zag.

I'm looking forward to everyone's comments.
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ES1-057 Daliy Chart
Ok, thanks...so this is the dilemma....the long term one contract trader is flat so if we trade tomorrow to 1127 or 1139 then the one contract trader has missed out...

Now I am not saying that having targets and context is useless by any means. I just want to know how to trade it.

So just for the record Mike, you would be flat and have no position as of todays close. If we rally tomorrow and we go to 1127 then that will be interesting and fun to see but we haven't used EW to make any money yet...

And in the interest of full disclosure Mike would it be fair to say that you have a blog with the intention of eventually charging money for your EW analysis or education ? I noticed you are also posting the same stuff on Elitetrader website...so I can only assume. Hopefully you will stick around here so we can see a few trades for our one contract trader. I'd really like to see it applied to even an actual paper trade...anything....

I want to reiterate that I'd also like to see our one contract trader take a position using longer term MP analysis. Just in case you folks think I'm being too harsh on EW...
One simple rule for all readers?

I initially thought you were a novice in search of community. You seem to have some knowledge of it. I now think you're semi dangerous to others. I can't find one reason from either of your charts posted to consider you knowledgeable enough to interpret EW for me. I certainly would not let you dictate a set of trading rules to me.

1st chart- Number "2" label at top (1216.5) is impossible by EW rules.

2nd chart- Alternative count with no label at high (1216.5). Then waves 3,4,1,2 in descending order followed by a 1 at the low (1106). Unacceptable order within the basic rules of EW.

I also take exception with the bulls/bears talk. Not needed for EW. It is what it is.

Last, I'd ask as Prechter does, are you ready to accept great wealth? There is the advantage of EW. Not everyone is. Think about it.

If I'm wrong, feel free to vote me down. I would encourage anyone with pure intentions to keep this topic alive. I'm no expert, but know enough to operate with EW. I just find it hard to believe this thread as it developed. I hoped the charts were a novice posters error. I've done it myself. I usually don't debate wave theory.

I think the others were genuinely interested. You have not done anything positive here imo. I'd love to have you prove me wrong.

Sorry if I digressed from the high quality discusssion.
Bruce,

Yes I have no position. I also have no intention on watching the market rally to my stated targets w/o action. What I will not do is force a trade just for the sake of being in the market or having skin in the game. That is guaranteed to lose money. Should an opportunity present itself under the rules of my trade plan, I will post my trade for the forum's review and comments but I will not offer trade advice. I am not a licensed professional! We are a sue happy nation and SEC loves busting the smaller guy that essentially give trade recommendations w/o a license. They do so to create case history so they can go after the bigger offenders. Sorry if I don't play that game. If trading advice is what you seek, find a broker you can trust.

Regarding my blog, it's free. As I mentioned it is a more detailed commentary. It also holds me accountable to interested parties as well as to myself for what I post. Am I looking to create a name for myself? YES... like many others in the Forum World. This is our only way to promote ourselves while CNBS and the like's thereof have Fast Money,Cramer and other guru authorities. They sure don't make access to providing valuable content easy.

Ignorance is the lack of education. I have spent thousands learning EWT. Will I be charging for my service? Nothing is for free my friend. I'm sure you get paid at your job so why should I be any different? Even if I someday develop a learning program, it's way down the road. My posts in the forum and blog will continue and provide valuable information but they will not be of the same quality as to what a paying customer might expect and deserve. Why would they be willing to pay when the same information is free?

I suggest you follow the thread and form your own opinion. If you find it worthy, then follow it.

Best of Trading
If you are referring to the circled 2 and how it looks like its above a blue 1 I could see how you might assume its incorrect labeling.

However, if you look at his fib retracement its obvious that blue 1 is part of the retracement and not a EW label.


Originally posted by DavidS



1st chart- Number "2" label at top (1216.5) is impossible by EW rules.

David,

Thanks for the post. Unfortunatley I have to disagree with some of "1st chart- Number "2" label at top (1216.5) is impossible by EW rules.

2nd chart- Alternative count with no label at high (1216.5). Then waves 3,4,1,2 in descending order followed by a 1 at the low (1106). Unacceptable order within the basic rules of EW."

While I didn't label the 2nd chart at 1216.5,the high is one in the same as chart 1. Both charts at 1216.5 are the end of wave 2 in a bear market. This interpretation is in agreeance with Elliott Wave Intenational's (Prechter's site) view point. Doesn't mean they're right. My chart 1, disagrees with their interpretation (chart 2). Both charts are structurally correct. Can you put up a chart for the readership to see your interpretation?

I looked at the 2nd chart again and I can see where I caused some confusion. The labeling is correct but my color designations obviously are misleading. I'll also add in wave 1 and 2 to make the wave sturcture clearer. Attached is the corrected chart 2.

If I get a chance later today, I'll put up some monthly charts illustrating why 1216.5 is a wave 2 interpretation.

Best of Trading
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es1
EWT;

I am not interested in you making calls, what I would like
is for you to tell what wave count you see the ESU0 in. I
will look @ my own chart to see if your count confirms my count.


TIA
RedSixSpeed- Sounds good. That's what the thread is for. Also noticed that you created a candle thread. I have great interest in them. I use them to confirm the end of waves. Assume you do too?

Best of Trading

Mike
This is my current view of the market as well as the anticipated direction moving forward.The Alternate labeling is below. Don't know if either pattern will complete today. If a w-x-y 4th wave correction completes as indicated, a trader may want to look at where wave w=y at 1096 which is also is in agreement with the most common Fib retracement for 4th waves of .382. This also is where the previous breakout occurred at A (red). Should provide support! Any trade above 1113 would most likely indicate that the correction was over.

First order of business is how trade reacts to 1101.25. If it is supportive and trade breaches 1113, then wave v of c of wave 2 (blue)up could be underway. Should trade disrespect 1101.25 and continue lower, then I'll be looking carefully at 1096.


Best of Trading.

Mike
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es1
So mike how would you manage a trade off the 1096 with EW..? Lets reverse this, you mentioned the break of 1096.....so suppose an E wave trader got lucky with his one measly contract and was using EW and was looking at 1027 - 1039 that you mentioned......How would they have used EW to get out before todays low of 1099.25.....? How would they have locked in profits considering we went to 1118 Yesterday ?

That was only 9 points away from the first target of 1027.....so they lost a bunch of open profits....so far....so what specifically would tell them to get out ahead of time...?

I think the last contract is always the hardest.....I was looking to target Mondays lows today with my last contract and I exited at 1102..I lost 3 points of equity trying for an additional 1.75 points or LESS......that is TERRIBLE...but I have yet to find any other way that is balanced and still stays outside the noise...

So my one contract question is complex and that is why I'm basing my ew questions to the one contract position trader......It's hard..I get it.....and thanks for sticking with us here...
Originally posted by EWT

Good idea Bruce. You asked " Lets start with the close of today....where would the long term trader be....IF THEY JUST STARED TRADING AT TODAYS CLOSE..Todays close is 1111.25 so would they be:

Flat
Long
Short

For any answer we need a Target and a stop
===================================================================
One simple rule for all readers. If you don't recognize the pattern in 5 seconds, stand down.

The market is in what I believe is a 4th wave consolidation of wave 2. According to EWT, the pattern would resolve to the upside. I would be flat because it is unclear whether the pattern is buliding a triangle or something else that has a greater downside potential below 1006. We need more price data before we act.

What I can offer is a rough target of 1127.5 - 1139 that have been in place since the break of 1096. When wave 4 is completed, I can add in additional targets.

As for a reverse, the wave count (alternative counts) would need to be applied and on most occassions do not immediately offer a trade as is in day trading. I realize that readers may not have an interest in an alternate count but it is part of the method. It's purpose is to provide an alternate view of the market should one's analysis be incorrect.

For those who would like more detailed analysis, drop me an e-mail and ask me about my bog.

Best of Trading!
I think Mike is being up front with his intentions now that it is out in the open........I'd like to see you EW folks come up with the same counts though.....Forums are tough on vendors and future vendors...it's the old "hero or a zero" mentality

The fact that we didn't keep going up into the 1027 area is not a great first call......will we eventually get there...? probably , but can you be on board to make money?? So we need to understand WHY a method fails.....my experience with EW is that the vendors bring in the alternate wave theory...to cover the tracks....Look at the long term history of Prechter.....anybody have the real facts..of when he was bullish and bearish over time...? Not very good I believe...I'd have to find my vintage stuff...

Back then it was known as Elliot "wave goobye to your money" wave..so he goes through the hero / zero waves too...

Ok , I'm not gonna beat this up any more....just let me know when the one contract trader gets long or short...thanks
Well, I guess we have our answer...as expected EWT is giving us double talk and "dancing" around making those market calls...we know what that means.....he can't make money by trading EWT.

I have a good indication now that he has little respect for our forum and the people here. He doesn't need us and we certainly don't need him. I think it's time to let Elite trader and other forums figure him out.