Customer Reviews

Mastering Elliot Wave: Presenting the Neely Method: The First Scientific, Objective Approach to Market Forecasting with the Elliott Wave Theory (version 2)

5 star:		(20)
4 star:		(7)
3 star:		(3)
2 star:		(3)
1 star:		(3)

 

 

Just about 5 years ago, I began seriously studying the markets. I was heavily influenced by many experts that this thing called Tecnical Analysis was a bunch of BS.

Five years, and thousands of dollars (in profits) later, I can tell you that technical analysis is a crucial tool in dealing with the fundamental uncertainty we traders deal with every day.

Even when I was basing decisions on conventional technical techniques, Elliott Wave Theory seemed like tea-leaf reading. But knowing what I know about the markets, I kept an open mind. I learned how to apply the basic rules, and was amazed at what I saw. There is much more to Elliott than I thought.

Neeley gives a thorough method for applying the Wave theory based strictly on price action. He guides you from analysing individual swings, to grouping them correctly into wave patterns. Once you have a workable count, it is possible to place a low risk, high profit trade on.

The key value in all of this is that you can see a number of possible scenarios. The one problem with Elliott is the issue of alternate counts. I've found that alternate counts often disagree as to the magnitude of a comming move, and less often on the direction, if you are using multiple timeframes.

I've actually worked through most of Neely's rules. I set up a spreadsheet to calculate the retracement levels he indicates in his text. Having said that, Neely omits one crucial bit of info. His method is based on retracement levels. Yet, he never tells you whether to use price levels, or percentages to measure the length of waves. Since he indicates you should use recent data, I've assumed he meant price lengths in dollars (or whateve currency you use).

This is a crucial omission, as price targets are determined by the relationships among waves. Sometimes using price lengths, rather than percentages, renders impossible targets. The only way around this is to use percentages for longer longer time periods, and price lengths for shorter ones. Posner covered this in Applying Elliott Wave Theory Profitably.

One problem is that Neely gives extensive wiggle room in his use of retracements to define patterns. This means his categories, while appearing rigorously objective, actually overlap to a considerable degree. You will often be left with 2 choices for a label, despite applying the rules consistently. That isn't necessarily Neely's fault--he is being realistic. No one ever said the market was easy.

I wouldn't tackle this text if you are unfamilliar with classical technical analysis. Elliott wave can be a frustrating theory. I've gotten headaches trying to count corrective patterns. Despite what Neely says, conventional indicators, candlesticks, and chart patterns can be very helpful when wave counts are not. Classical technicals and Elliott often overlap--suggesting the same conclusion. When they do, then you know you have a potential profit opportunity.

But if you are familiar with classical methods, and you are serious about learning Elliott Wave, then I can recommend this book.

This book is actually for those who want to "master" the Elliott wave theory. Though Mr Neeley explains his method from the scratch, you have to spend a great amount of time to understand how to identify the waves and how you should apply the rules and guidelines even if you know the theory. After long hours of studying the book and applying the techniques on the price charts, you will surprisingly find out that your view on the technical analysis and Elliott wave theory changed.

"A large portion of market technicians spend their time trying to manipulate price data to find that "magical" key-indicator. How can a transformation of price data be better than the original data?" says Mr Neeley. If you're in the search of the "magical" key indicator(s), this book is not for you, since there's not even a word about the technical indicators, but when you finish studying the book, you will see that you don't need to look for an indicator.

Since Fibonacci numbers and golden ratio are the most important parts of the wave theory, you have to know how to apply them on the charts. This book is the best one I've ever read about how to apply Fibonacci techniques on a price chart. Not only the price distance, but the time elapsed to form the waves are dependant with the Fibonacci numbers and this book teaches you how to use them.

Author also defines clearly how to apply the Rule of Alternation, Rule of equality and Rule of Complexity. Further you read, you learn how to analyse complex wave structures and what to expect when the waves are advancing to form larger waves.

I have to warn those who want to learn some trading techniques using the Elliott Theory or Neeley Method, since there's nothing in this book about trading, but do not forget that this book is mastering the the Elliott Wave. Do you think you still need a pre-made trading technique after mastering the theory? I don't think so.

You want to know Elliott Wave theory better than you know the menu at McDonald's? This is the book to study. Figures, facts, rules, laws...it's all here. Don't expect the wisdom to come easily though. This is seriously hard stuff to absorb. If you do absorb it however, you'll KNOW the markets you follow and what they're doing intimately.

Actually I gave this book only four stars only because I subtracted a penalty star for bogus reviews. Really now...did whoever (the author?)think we wouldn't catch on? And in the future maybe they could at least put in something other than the endorsements on the back of the book.

If you are looking for a general introduction to Elliott Wave theory and practice this book is not for you. I would suggest starting with Prechter's "Elliott Wave Principle" from 1979. If you are prepared to spend a lot of time working through the minutiae of the rules and conditions contained within this book, however, (especially using your own data) you will find this a most rewarding endeavour. Wave theory is not for the faint-hearted, it requires a lot of time and application to give you the building blocks to come up with a view of the market.

I picked up technical methods after losing half my money in mutual funds run by MBAs that are taught what markets "should" do rather than what they actually do. In retrospect, a coin flip would have yeilded a better result.

The first big breakthrough came with Prechter and Frost's book: The Elliott Wave Principle. I saw in that book what I had myself been witnessing but unable to codify into a coherent theory. I would notice how nothing went straight down or up in markets but would move in a fast, sharp move and then "take a break" before moving in a fast sharp move yet again. Then, ultimately, at some juncture, the trend would change and move in the opposite direction with the same behaviour, move fast, rest, move fast, rest, etc. The traditonal tech analysts refer to such behaviour as "bull" and "bear" flags, etc. but the Elliotticians found a way to predict reversals with Fibonacci ratios.

Then along comes Neely. He sees what no one else does and like a great genius ties it into a code of rules for wave analysis much more strict that those before him. He extends Elliott's original work. For doing so, Prechter is unhappy with Neely. Prechter has spent the last 18 years calling for a crash that has yet to transpire and giving Elliott Wave analysis a bad name. Meanwhile, Neely continues to innovate with new patterns he sees such as "NeoWave Diametrics". The only unfortunate part of buying this book is that it does not contain Neely's latest insights. Perhaps he will release a new edition in the near future.

All of this being said, this book is VERY HEAVY reading and only for people obsessed with market patterns.

Good for Neely for breaking free from the notion that one must follow and never lead the way into a better understanding of the psychological patterns that drive the human animal!

Prechter may go down in history for reviving Elliott's theory but Neely will go down in the books for extending it.

Wouldn't it be nice to do hard work and then profit for your labour? This book is very complex and requires hundreds of hours of study, but I am not convinced it is worth the investment.

I have tried to read the book on more than one occasion, but failed. I have also subscribed to the author's newsletters. In those letters he seems to have gone away from labelling each little swing in the market, probably because it just doesn't work. The book is almost 20 years old and I would love to read a book by Neely with those additional 20 years of experience behind his belt. That would probably be a 5 star book.

If you are new to Elliott Wave do not buy this book. Here are my recommended steps, and you can stop anywhere, and still get benefits:
1. Prechter's 1978 classic Elliott Wave Principle : Key to Market Behavior
2. Miner's High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets (Wiley Trading)
3. Enlist yourself on the right discussion forums and follow real time interpretations by self-appointed experts
4. Subscribe to newsletter fitting your trading horizon, Prechter has a range of options
5. Buy Neely's book

I have written several short reviews on trading books. The best way is to compare the score on the books I've read. Many reviews on amazon.com are just glorious 5 star reviews. I use all five categories; sorry but everything isn't "great". Books rated 5 are very good. Books rated 4 are good solid books well worth reading. Books rated 3 can be bought by some people who read a lot or have very specific needs. Books rated 1 or 2 I would not recommend buying or reading. Naturally all in my humble opinion.

This is a superb book but difficult to read and FINISH OFF , it took me 15 yrs and 4 attempts . What helped me do it was having read all the books on EW by Robert Prechter , Robert Beckman , Balan and Weis :)))) plus being finally relaxed about it and having the right attitude . Facts are I am not a genius but believe me this is the only book which teaches you how to precisely interpret and above all correctly CHART EW . It is the ultimate conclusion to a long voyage . Reading about EW by others exposes us to their art but this book is a how to book albeit a complex one .

Glen Neely is one of the foremost Elliott Wave experts on the planet. I've seen his frequent quest lectures on television and radio business channels and in business section editorials.

I think this book makes a great complement to professional trader Larry Connor's "Advanced Trading Strategies." My perspective is that "Mastering Elliott Wave" contains everything one needs at all levels to master Elliott Wave, with clearly drawn pictures, complete computations, and exhaustive detail.

Where "Mastering Elliott Wave" provides the detailed "language" specification, Larry provides the more specific Elliott Wave "code" applications to trade the market. It seems that each book complements the other synergistically. Mastering Elliott Wave provides you with all of the tools, where Larry's book gets you to think more practically about logic and system design variations using the EW tools.

Many strict Elliott Wave tacticians hand draw their charts to get a better feel for market movement and direction. I kept a hand-drawn chart of Silver futures and I was better able to see and even feel the turning points that way, made some money, and it wasn't difficult.

It seems to be two books in one. The first chapters, specially 3 are really hard and after reading several times, when the light starts to turn on... you find typing errors!!. The relation stated on the paragraph you have just read - and understand - can not be correct because then, the previous one is not posible... Crazy!!

Anyway, just passing over those 3 first chapters and dedicating your time to those from 4 on it is a very recomended reading to get to understand some more on Elliott's theory.

This isn't the easiest of books to understand out there, but it is the best by far concerning Elliott. If you are really prepared to take the time to read this book, slowly and have the time to apply it on the markets on a frequent basis, then I would recommend it entirely.

If however you only scored 2220 on the GRE, then stick to fundamental analysis.