Hmmm ... given questions on EW on another thread a review of...

Hmmm ... given questions on EW on another thread a review of current chart shows interesting situation and one of the most uncertain parts of EW theory.

The chart shows the A,B,C corrective waves and have inserted what could be (1)>(5) waves preceding the next reversal ...

Now this is the tricky part coz there are any number of scenario's to be played out and the reason we only use EW as a confirmation signal given it uses Fibonacci sequences as the base. For any trading system we need signals that can demonstrate a continuum over time that is sequential.

The reversal shown in my chart as A,B,C corrective waves could also be "Downward Impulse Waves (i.e. 1 > 5) and if price holds firm and new uptrend eventuates, then we could be technically in a upward 'Impulse Wave 4' or 'Corrective A Wave' reversal.



FWIW ... I attended a PROFIT SOURCE seminar some time back whose program uses algorithms supposedly picking EW 'Wave 3' turning points (as ENTRY signals) and the chief guru admitted freely in answer to questions that PROFIT SOURCE program (cost $15k ... gulp) was accurate only 11% of the time ... a probability most seasoned traders would regard as untradable even if trailing stops are used and also the 'EW 3 wave' is too small a 'trading window' in any event.


Cheers ... tight stops.


This is only my view ... read the black stuff.