Elliott Wave Theory: An Introduction by Nick Radge
Nick Radge explains the Elliott Wave Theory rules and guidelines. Recorded in 2011, we apologise for the poor sound quality. At The Chartist we use EW Theory to monitor sentiment in the market and as a trade management tool.
Elliott Wave theory is not about forecasting. It’s a form of technical analysis used to identify repeatable patterns. Those repeatable patterns have some kind of probable outcome but more importantly a repeatable pattern can confirm when you are right and when you are wrong.
Elliott Wave gives you a reason to enter a trade, where to put your protective stop, and it let’s you know when you’re wrong.
And that’s the important thing. They are no different to any other pattern whether it be a triangle a head or shoulders or a flag or other technical patterns. Elliott wave is simply a comfortable way to be involved in the market.
Peter Hammersley and Scott Goddard use Elliott Wave theory in the nightly Chart Research.
Elliott Wave theory has only three rules but there are quite a number of guidelines. The guidelines are interchangeable which causes some issues. One person sees one thing while someone else sees something else. It’s important to remember that the guideline is exactly that; just a guideline. It’s not a rule. Elliott Wave rules cannot be broken.
