As I mentioned in the last post, I've been re-reading one of Van Tharp's trading books. I can see from the book that the author is a systematic person. For example, he seems quite anti Elliott wave techniques because he sees them as an attempt to find some magical order in the market in a Da Vinci code sort of a way. No doubt, a lot of people are attracted to that, but for me it's a tremendously useful technique.
What I like about using Elliott wave ideas is that you are trying to put patterns in context and you gain more information that way. For example, a market has just had a good surge up after building a base, what an Elliott wave person might call a third wave. A correction follows and you get what looks like a straightforward 1-2-3 signal down. I would rarely take this because I would interpret it as a correction which won't go far. On the other hand, if the same pattern was in the direction of the trend after a correction I'd be very happy to go with it.
So I use the technique in a pragmatic way and because it is not easy to backtest - eg it's not just a matter of scanning for 1-2-3 breakouts - and many are uncomfortable with this subjective approach to chart interpretation there are not always going to be a lot of people using the same method as me.
By the way, I'm losing enthusiasm for posting trades every day as I don't think I'm getting much value out of it now and the posts are probably becoming humdrum. What I'll do instead is to post on issues of interest I might be working on and perhaps use the odd example to illustrate.
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