بایگانی برچسب برای: Hossein Heidarpour

پرسش و پاسخ با گلن نیلی-53

(53) New Tips & Hints

To apply NEoWave properly, how many bars should a chart contain?

ANSWER:

Most wave analysts do not appreciate the impact complexity (or the lack thereof) has on accurate wave analysis. About 20 years ago (at 26), I was in New York on my first PR tour, to make an appearance on CNN (the youngest guy ever to appear on their financial news show, I think). While in New York, I visited the office of a professional Elliott Wave analyst. On his wall I saw a 10-foot long, daily plot of the Dow Jones Industrial Average kept up-to-date by hand each day (that’s the way it was back then). The second I saw that chart I thought “this professional, highly-paid analyst doesn’t understand wave theory.” 

In nature, every living thing has a certain temperature range in which it can exist. If the temperature is too high or too low, the organism cannot function. When it comes to nutrients, too much or two little can be deadly – survival depends on a delicate balance. When it comes to proper NEoWave analysis, too much or too little complexity will seriously impact accurate analysis. 

To determine complexity, you don’t want to count bars, you want to count monowaves (see MEW, page 2-2). Too avoid the subjectivity possible when too many monowaves are present, and the difficulty of arriving at any decision when too few monowaves are visible, the ideal number of monowaves to produce the most accurate analysis is 55 (a Fibonacci number). The minimum of monowaves present should be 34 and the maximum 89. If the chart you are analyzing contains more than 89 monowaves, or less than 34, your personal beliefs and emotions can unconsciously impact your assessments. Therefore, no matter whether you are analyzing an hourly, daily, weekly or 5-minute chart, once the number of monowaves visible exceeds 89, move to the next higher time frame to gain perspective and reduce the number of monowaves being analyzed on the lower time frame.

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پرسش و پاسخ با گلن نیلی-52

(52) New Tips & Hints

What do you think about Elliott oscillator use?

ANSWER:

This question was sent in by a customer in Varazdin Croatia, who asked to remain anonymous (as many do). I’m surprised it has taken so long for this question to come up since many programs that offer Elliott Wave analysis make use of such things.

To better understand my answer, we need to understand the problem with oscillators. By their vary nature, oscillators are based on specific, finite time periods. As a result, an oscillator’s “perspective” on current market conditions is not dynamic, not flexible and merely reflects the mathematical formula’s “opinion” of which wave is forming. 

Under orthodox Elliott Wave, when in an uptrend, there are six types of rallies possible (labeled 1, 3, 5, b, d or x) and five types of declines (labeled 2, 4, a, c or e). Each of those 11 conditions possesses unique behavioral characteristics. 

On the other hand, an oscillator provides three primary readings – overbought, oversold and “neutral.” You could say varing degrees of over overbought and oversold exist, but what constitutes those varying degrees is a matter of personal judgement, which probably changes with frequent regularity based on recent experience. 

With 11 distinct, behavioral environments under orthodox Elliott Wave (and 15 under NEoWave theory), the problem becomes clear – an oscillator can only give you “its” opinion of which wave might be forming within the context of “your” overall opinion of current wave structure. So, once again, it boils down to whether your wave count is correct to begin with. Plus, remember, the oscillator’s opinion is “entrapped” within time limits imposed by its mathematical design, which prevents it from adapting as the “pulse” of the market changes. 

The bottom line – using oscillator’s to count waves is merely a crutch and one that will not hold you up during complex market environments. If you can’t figure out a wave count on your own, it usually means that market is near the center of a large, complex formation. When in such a position, no amount of “help” from outside indicators will make the analysis process any easier or any more accurate.

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پرسش و پاسخ با گلن نیلی-51

(51) New Tips & Hints

Now that many markets trade 24-hours-a-day, how should I construct my charts?

ANSWER:

This is a great question sent in by Tseng Yung-Chih (location confidential). The construction of charts, for both wave analysis and trading, should follow a natural progression. For the most part, before 24-hour markets emerged, nearly all generally recognized time frames were approximately 1/5 or 5x’s the size of the next closest (i.e., an hourly chart was approximately 1/5 of a day, a day was 1/5 of a week, a week was approximately 1/5 of a month). For whatever reason, humans seem to like dividing time into 5th’s (a Fibonacci number). 

With the advent of 24-hour markets, an hour is no longer 1/5 of a day, creating a glitch in the “natural order” of things. So, what should one do? For any market that is active nearly 24-hours a day, I recommend dividing the total number of minutes in the trading day by 5. For markets like the E-Mini S&P, which is open 1440 minutes every 24 hours, that yields 288-minutes. 

If doing NEoWave analysis, I would construct a wave chart showing the high and low (plotted in the order they occurred) every 288 minutes; for trading, I would employ a 288-minute bar chart. Dropping down to the next, lower level, you could either maintain a strict 1/5 relationship by using a 58-minute chart, or use its closest, and most popular neighbor, the 60-minute time frame.

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پرسش و پاسخ با گلن نیلی-50

(50) New Tips & Hints

If the end of a correction occurs higher than the impulsion preceding it, how do you measure it for Fibonacci relationships?

ANSWER:

My good friend and long-term client, Paul Collaros of South Africa, sent in this question. To make discussing this topic easier, let’s assume the market is in an uptrend and the first impulsion is wave-1 and the second is wave-3 (the following concepts also apply if the first and second impulsions are waves-3 & 5 or waves-a & c of a Zigzag). In measuring the size of the two impulsive waves for possible Fibonacci relationships, Paul was wondering if you measure wave-1 from “Point 0” to its end OR if you include the high of the correction into the length of wave-1 before comparing it to wave-3. 

This appears to be two questions in one…

1. How do I determine which wave is the extened wave?

2. Should I include part of the correction in the length of wave-1 before applying Fibonacci relationships?

First realize, if in a larger five wave move, the impulsion following a strong correction will always become the extended wave (unless the correction in question is a Running Triangle – i.e., a Triangle with a strong upward or downward slant). Therefore, based on our assumptions in paragraph one, the impulsion forming would be of the 3rd Extension variety (see top left corner of page 5-14 in MEW). 

Addressing question 1 above, determining which wave extended has nothing to do with Fibonacci relationships, but simply with which wave is the longest when measured from its “orthodox” beginning to its “orthodox” conclusion. 

Addresssing question 2, Fibonacci relationships may or may not exist between waves-1 & 3, but that will have no bearing on whether the pattern is impulsive or not. If you must add part of wave-2 to the length of wave-1 to find Fibonacci relationships, that is fine. If a Fibonacci relationship exists between waves-1 & 3 without using the high of wave-2, that is fine, also. Fibonacci relationships are less common in impulsive patterns; they are more corrective environments.

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پرسش و پاسخ با گلن نیلی-49

(49) New Tips & Hints

Can a 5th wave be a Diametric formation?

ANSWER:

Sent in by Rajkumaar Perumal of Chennai, India, the answer to this week’s question can be found by focusing on the internal design of an impulse pattern. A standard (trending) impulsion’s internal structure is :5 :3 :5 :3 :5, whereas a terminal impulse is a :3 :3 :3 :3 :3 affair. 

Since a Diametric formation always compacts to a :3 (ie, a correction), the ONLY time a Diametric can occur as the 5th wave of an impulsion is when that impulsion is Terminal in design.

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پرسش و پاسخ با گلن نیلی-48

(48) New Tips & Hints

Why do you sometimes trade contrary to your forecasts?

ANSWER:

This question has been posed by so many people over so many years that I thought it was time for an “official” answer. 

To the neophyte, the world of trading is all about forecasting. They think, “If I could just forecast what�s going to happen, then I could make money.” In fact, the entire financial industry is founded on the assumption “you can�t make money unless you can accurately predict the future.” This is what I call the “Forecasting Paradigm” and is the foundation of nearly every product and service offered to the investing public.

Unfortunately, the “Forecasting Paradigm” is false. For example, do you have to predict the future to get there? Do you have to predict the direction of a river to make it to the ocean? Do you have to predict the direction of the wind to man a sailboat? Does a doctor “predict” you have a tumor or does he observe it on an x-ray and inform you of its existence? 

Successful trading is about risk management, market observation and stop movement, NOT about forecasting. It depends on your ability to remove opinion and emotion from the process and learn to “go with the flow,” doing what the market tells you to do instead of you telling it what it should do. 

The recommendations in my NEoWave Trading service are the result of a paradigm shift in my understanding of how markets operate and how to trade them. I�m sure long-term subscribers have noticed this shift over the years. The result of more than 20 years of studying markets, this is what my cutting-edge, NEELY RIVER trading technology is all about. NEELY RIVER Technology addresses and eliminates all the problems associated with trading failure, allowing you to “naturally evolve” into a successful investor. Furthermore, by eliminating the “Forecasting Paradigm” from the trading process, it allows you to dramatically reduce the time spent looking at markets and completely eliminates the time spent trying to predict them. 

Realizing long ago the difference between trading and forecasting, I separated my NEoWave services into two, distinct products – the educationally oriented Chart service and the profit oriented Trading service. Some prefer making their own trading decisions (based on my NEoWave forecasts in the chart service), while others prefer taking advantage of my trading expertise to guide them through the process successfully.

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