28 of 31 people found the following review helpful
A great first Elliott Wave book...,
This review is from: Elliott Wave Principle: Key To Market Behavior (Hardcover)
This book is required reading for levels 1 thru 3 of the Chartered Market Technicians (CMT) program because it covers all the basics of the Elliott Wave Principle even though the book was written in 1978. Bob Prechter has devoted the major part of his professional life to the study of Elliott Wave theory and application so therefore imminently qualified to write this book with Charles J. Collins.
So why did I give this book 3 stars? In my opinion, Prechter makes the subject more complicated than it has to be. At the very least, he runs the risk of alienating neophytes who will be overwhelmed with his descriptions and analysis and wonder how in the world they will ever make sense of markets from an Elliott Wave perspective. The challenge is that Elliott Wave is highly subjective which is why very few experts ever agree on wave counts and forecasts. Even Prechter himself, who is extremely generous of his time with anyone who shows a genuine interest in the subject, has enjoyed periods of great success punctuated by times when he was very wrong. For example, he warned subscribers in August and September 1987 that a top was forming in the Dow saving those who listened from getting caught in the big October drop. But then he wrote a brilliant but highly bearish article in December 2003 entitled A Developing Depression for Technical Analysis of Stocks & Commodities magazine which talked at length about the challenges US stock markets faced that in retrospect was the early stages of the 2003-2007 cyclical bull market.
I have come to the conclusion that while the behavioral observations of founder Ralph Nelson Elliott in the 1920s and beyond were brilliant, few since have truly mastered his brainchild due to the highly complex and subjective nature of applying it to markets. The trick is in focusing on the wave patterns that have a high probability of unfolding as dictated by Elliott Wave and not trying to trade all the messy corrective patterns.
One day, someone will write a definitive guide that takes a computerized approach to EW and develop specific probabilities of wave outcomes with different stocks and futures so that traders will quickly be able to isolate high probability EW patterns to make money. Richard Swannell of Elliottician.com devoted his life to such a goal and did develop a series of very interesting computer programs to trade but the jury is still out on how effective and reliable his last iteration is. Unfortunately, he passed away at an early age so someone else will have to take over and write the book.
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Initial post: Mar 2, 2012 11:51:09 AM PST
Frank Peri says:
I am a wannabe trader studying/researching technical trading with emphasis on Elliot waves. I found your review helpful. I'm not a neophyte but what i've read and seen about Elliot waves makes my head spin ... wheels within wheels within wheels! Can wave and trend analysis really be THAT complex? If it is I'm probably out. Any good books on "simple" systems or is that an unobtainable holy grail. Simple doesn't mean stupidly simple just common sense simple. A successful trader told me it's 1% knowledge and 90% discipline. I'm still looking for the 1% that I'm comfortable with
In reply to an earlier post on May 2, 2013 2:55:29 PM PDT
You could read the book Five waves to financial freedom by Ramki Ramakrishnan. It is easier to understand.
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