DislikedHi Zoran ... Nope, he still hasn't replied to my emails, so I have no clue
Okay, thanks. That's interesting though, cuz here's a snippet I found from one of the ride-alongs where he mentions Elliott Waves (I've removed all my side of the chatter, as it would just be "noise" when reading, lol):
From the snippet, I was interpreting his use for it to gauge his attack entries, but maybe he is using it mainly for the volatility. Is that how you would interpret the above?
Oh, and notice he talks about rescue being "1, 5 then surrender".
Anyway, he recommended us to use a 3 level attack sequence, which I feel is a good idea. This, too, doesn't seem to have a set sequence, as we've seen various sequences he's used, so again, we use what is appropriate for our comfort zone and account size.Ignored
The important message is that when we have caught the third wave in a trend we should expect a largish retracement. I will generally close all positions when the 3 trending waves are clear, not only because of Elliotts theory but it was also mentioned in the book "Technical Analysis of Stock Trends" by Edwards and Magee.
Therefore, a 1-3-3 sequence is played out as follows:
* We place our scout to ride wave one and wait for the wave two retracement
* We then enter 3 more troops to ride wave three and await the wave four retracement
* We enter the final 3 troops to ride wave five. From observation, the end of this one seems to be the most unpredictable.
If the scout was entered in the wrong direction, we can use waves two and four to rescue (sequence 1-5). Also, at the end of 5 waves in the direction of the trend we tend to get an ABC correction, which can also be used for rescue. However, since this correction is against the trend, I'm not sure whether fti would reverse for a two level attack sequence.
Now since we are trading on the 5min, a 5 wave structure could be a subwave in a larger structure on a different timeframe. For example, waves 1 to 5 on the 5 min could be wave 3 in another structure on the 1 hour while the ABC correction on the 5 min is then wave 4 on the 1 hour. fti's "as above so below". Check chart.
Also, this is possibly where his overnighter comes in - that one is probably riding a wave on a higher timeframe.
Although most of us may have a fixed sequence and mine is pretty much at the beginning, fti's sequence varies based on the volatility (speed of the wave) so it is not fixed. When I found myself on the other side of a strong move, I knew I could only rescue with more troops than normal as the volatility was high. Also, perhaps I just should have bitten the bullet and if I keep making the same mistake, the market is sure to keep teaching me until I learn.