Mastering Elliott Wave: Presenting

Always trading with the intent of only getting in at top or bottom tick is a very dangerous habit and is not the way large amounts of money are made in this game. Profits can usually be made faster and safer when entering right before a market's acceleration phase. This usually takes place well after the high or low in the market has occurred. In addition, it is generally very important to let the market confirm (even if only in the smallest way) a change in trend has occurred before entering a position. By demanding confirmation before entering a market, you can almost always eliminate the possibility of getting caught on the wrong side of a "gap" opening. Also, if your attention is strictly focused on short-term or overnight trading, large patterns which have been forming for months or years can unwind overnight, creating panic "gap" openings

Elliott Wave can actually make long-term prediction easier than short-term prediction.

there is no limit to how large, time consuming or complicated an Elliott Wave pattern can get.

When combining three or five monowaves, you create what I have termed a Polywave, one level above monowave development. When you combine three or five polywaves, you generally create a Multiwave. Three or five multiwaves generally can be combined to create a Macrowave. This is the highest level of development I have named. Anything above that level will continue to be referred to as a Macrowave.

Normally, a minimum of three charts is necessary on each market followed; daily, weekly and monthly.

The Wave Theory requires a large degree of public involvement (which generally precludes or greatly hinders any manipulation potential) to manifest itself. Since Cash markets always involve more participation by the public (through direct buying and consumption, as is the case with commodities) than Futures markets, wave formations always tend to be more standardized and predictable when cash data is used. In constructing your data series, use cash data whenever possible.

Only one figure per time period should be employed so it is possible to decide how each figure changes (if at all) the current expectations and possibilities of the market. This does not mean only one figure per day should be used for your analysis, simply that a single figure per time unit (whatever that time unit is - one day, week, hour, etc.) is optimal.

It should be clear from this example that hourly closings are not the way to plot price action.

Therefore, closing figures - over any time frame - should never be used unless nothing else is available. If you want to employ hourly data, the correct way of collecting data is revealed on page 2-9 (see Cash Data, #2). Proper plotting of data, collected over any time frame, is discussed on page 2-11.

The use of closing prices on a monthly, weekly, daily, or hourly basis is the most unreliable way to track development of a market from an Elliott Wave standpoint