About this blog


I have been studying trading and investment for a long time.
I have tried system trading using MT4 platform, statistical / AI analysis using R and Python, fundamental investment through financial statement and business potential analysis, macro economic analysis etc. I have experienced many failures as well as small successes.

Now technical analysis is the basis for my trading.

"All the information is reflected in the price". This is the wisdom by a trader I met as well as the fundamental principle in economics.

Some economics conclude that a price movement is random walk. I believe this is wrong. Market is not "fair" like economics assume. There are institutions which control the market (= market makers), and retail traders like us who trade with small funds. If the market is random walk, why would 90% of retail traders end up losing money?

I don't use indicators in a way taught in some introductory trading books. For example, I have back-tested moving average crosses many times, but it never generates consistent profits. I have never found an indicator which generates consistent profits through my numerous back-testings.

Now my trading is based on Elliott Wave principle. Elliott wave is the most useful / practical trading framework I have ever met. I used other trading tools as well, but Elliott wave is always the core when I approach any markets.

In this blog, I will write my understanding of the market structure based on Elliott Wave.

2 comments:

  1. Jure GrahorFebruary 23, 2020 at 12:17 PM

    Hi,
    EW are easy for history browsing. But as prediction there is always a possibility to draw an long and an short version ...
    did you solve this (with set of rules) or you apply money management (stop loss / take profit /plan) ...

    Can you suggest some EW material ...

    bye

    ReplyDelete
    Replies
    1. Five Waves TraderMarch 3, 2020 at 6:04 AM

      Hi,

      Thanks for the comment.
      Yes, I agree that there are often multiple EW counts.

      (1) EW is my core of trading, but I always to try to validate with other technical analysis (e.g. momentum, time development, divergence, stop hunt) to judge which wave count make sense the most.

      (2) If I cannot gather enough evidences to support my wave count, I simply don't trade or use less risk capital.

      (3) And yes, risk management plan (position sizing and stop loss) should be always in place.

      "Five Waves to Financial Freedom: Learn Elliott Wave Analysis" by Mr.Ramki is a great book to start learning Elliott Wave, and it is very cheap also.

      Delete

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