Got a great question from Charinde after Wednesday’s video about Exhaustion buying and selling volume signals. I’ve mentioned the Elliott Wave Principle and Better Sine Wave indicator in a previous video. The video above talks about the Elliott Wave Principle and Better Momentum.
I’m not a total fan of the Elliott Wave Principle. For example, I don’t buy into the use of Fibonacci numbers to forecast turning points. However, the idea of waves of traders getting on board trend moves makes sense to me – with early movers, then the masses and finally the laggards. So why not keep it simple and just call it the Rule of 3.
Quote of the day …
From Darryl F.
“Barry, I would like to thank you for your invaluable service to us amateur daytraders. I just started trading again after a few prior unsuccessful attempts and am up 28% for the month so far in March and 25% since I began at the beginning of February. I attribute my success to your methodology including using multiple time frames on tick bar charts combined with your primary 3 non-correlated indicators. I attribute my week February results to poor discipline – mainly averaging down and buying/selling breakouts. Which reminds me, I also use your 7 deadly sins trading log, which has definitely kept me honest.
I have been up 14 days in a row and more importantly have had pretty good entries resulting in reasonable profit vs pain ratio on my trades, with a ratio on a per trade basis of between 1 and 3 : 1 (profit : pain). I am typically able to make 1.5 to 2.5 points per trade and am trying to get comfortable sitting through some chop to get larger moves, which usually would have occurred had I held longer. That being said, the most important lesson I have learned is to take trading seriously and study, study, study and to be disciplined in trading the indicators (hence the difference between my March and February results).”
Darryl, that’s bloody marvellous!