THE ELLIOTT WAVE PRINCIPLE
Elliott said, "The Principle has been carefully tested and used
successfully by subscribers in forecasting market movements" (p. 107). In
another place he mentioned, "Hereafter letters will be issued on completion of
a wave and not await the entire cycle. In this matter, students may learn how to
do their own forecasting and at no expense. The phenomenon and its practical
application become increasingly interesting because the market continually
unfolds new examples to which may be applied unchanging rules" (p. 137).
My own work
with the Elliott concept, from many different angles over 15 years, does not
support the contention that the wave structure has forecasting ability. The
wave structure is too complex, especially in the corrective waves. The rule of
alternation is extremely helpful, but this does not tell us, for example,
whether to expect:
• A correction of 3 waves.
• A double sideways correction.
• A triple sideways movement.
It is even
more unlikely that any 5-wave pattern can be forecast. The integration of
extensions in wave 1, wave 3, or wave 5 complicates the problem even more. The
beauty of working with the Elliott concept is not the wave count. We can only
agree when J. R. Hill writes in his practical applications, "The concept
presented are extremely useful but have literally driven men 'up the wall' as
they try to fit chart patterns to exactness in conformity with the Elliott
wave" (Elliott, p. 33).
Elliott is focused on pattern
recognition. His whole work is streamlined to forecast future price moves based
on existing patterns. He does not appear to have succeeded in this area. Elliott
expressed uncertainty about his wave count himself when he wrote in different
newsletters, "The five weeks sideways movement was devoid of pattern [—] a
feature never before noted" (Elliott, p. 167). "The pattern of the movement
across the bottom is so exceedingly rare that no mention thereof appears in the
Treatise. The details baffle any count" (p. 165). "The time element [Fibonacci
sequence] as an independent device, however, continues to be baffling when
attempts are made to apply any known rule of sequence to trend duration" (p.
180). "The time element is based on the Fibonacci Summation Series but has its
limitations and can be used only as an adjunct of The Wave Principle" (Elliott,
p. 186).
Elliott did not realize that it
is not the wave count that is important, but the Fibonacci ratio. It is the
Fibonacci ratio that represents. (FOREX 101)
Forex Art Of Fibonacci (Forex 101)
1.
2.
3.
4.
5.
6.
7.
8.
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15. 16.
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30. 31.
32. 33.
34.
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44. 45.
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63. 64.
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72. 73.
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89. 90.
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Forex Art Of Fibonacci (Forex 102)
100.
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108.
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114. 115.
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121. 122.
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127. 128.
129. 130.
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134. 135.
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145. 146.
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155. 156.
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165. 166.
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