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Ophir

11,173 Posts.

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18/09/16

20:31

Post #: 19238015
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Originally posted by AverageJoe ↑

The problem I have with EW is the bias caused by the waves. It has already set in motion the influence on my thinking before I can see anything else. If I use EW and see the 5 wave move up then I am expecting a corrective ABC down according to the theory. It has already formed a bias through the mechanics that I am expecting a sell off and be forcing me to pull up fib retracements to measure the likely levels based on these ratios. I can then pull some maths indicator (different measure of price) to get confirmation. or in your case a lower rising trend line to start guessing the ABC move retracement and look to buy. This is not objective thinking IMO. We can agree to disagree. This is afterall TA and it is more art than science.

I take gold price one swing at a time. In December gold move exponentially followed by a 4 months (circa) range bound price action, a Brexit big spike. I have also indicated many times that the move on Brexit was preceded by both the range low and high take out. It is on the chart with a horizontal S/R lines, no magic angle optimising required. It is either there or it isn't and this humble line method through its simplicity is hardly ever mentioned in this forum. Most will whip out a trend line, Fib ratio or MACD, SMA and a whole heap of sophisticated tools. It would appear not many looking at price using this simple method against your assumption that everyone use them. My initial personal experience when I saw these lines was the simplicity and I associated simple = not sophisticated hence ineffective!

The market has 3 direction of movements generally speaking, up, down or sideways. We only know this post event so I have yet to find a tool that can definitely anticipate the likelihood of the type of market we will enter at the initial stage. If the trend is up and enters a range, then I would think it is likely to breakout of the range in the direction of the parent trend. It is that simple for me. One can add a layer of sophistication by employing patterns, trend lines or whatever trend confirmation tool. One can take a contrarian approach and there will be occasions both sides will be wrong but price tends to favor trends.

I still believe that this coming week before FOMC, gold price is likely to take out NFP low first to give the impression that support has broken and bears should jump straight in and ride the sucker down! I am not going to punt by a premature accumulating of gold stocks and neither will I be clearing out/hedge my long gold stock positions either. I am not confident enough to add because I have stopped punting on a whim or a calculated guess. We each have our own risk assessment rules to follow.

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Hi AJ well I'm going in hard on some more NCM calls
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