Bitcoin Forum

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=360&i=&c=0&s=&e=&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=1&i1=RSI&i2=&i3=&i4=&v=1&cv=0&ps=0&l=1&p=0&

Are 3-3-5s really this huge?  Look at that RSI, above 70 for the first time in 6 months.  The other "rallies" on the way down pale in comparison with this one.

The "bitcoin market" is a tiny little thing that is moved completely by a few large players, very much like microcap stocks where manipulation is the rule, not the exception. Why would Elliott wave analysis even be relevant to begin with? Marketplace sentiment need not be estimated here, just watch the big boys as they turn their game tokens into useful cash, not that I would encourage "chasing" trading activity in a obviously rigged market  :)

You're referring to the a 3-3-5 flat within the correction? There is no doubt this month's impulse broke the channel in November. That's plain as day. But that alone says nothing about the possible correction since 19 October. With no other indicators, you must wait for the III.ii correction to confirm or deny III.i.

III.ii should correct to roughly III.i.4 ($3) before continuing strongly up III.iii.

II.correction should drop below $2.

Anything else is purgatory.

The 5th major wave down was truncated - ended Nov 18.
Now we are in an upward correction, which should take us above the low on Aug 6 ($5.75)

Am I crazy?

I think it's a reasonable view. But then I'm very curious how you are counting the waves since November (https://bitcointalk.org/index.php?topic=49462.msg647042#msg647042).

1. up Dec  1 - $3.14
2. dn Dec  4 - $2.63 (50% retrace)
3. up Dec 19 - $4.5
4. dn (pick your own retrace target) 50% would be =~$3.57
5. up ~$5.8+ target

This sounds similar to what I'm thinking.  Going to $6, guys.

By the looks of what's going on right now, I don't think so.

Hey,

So you guys (~gender neutral "guys", I suppose~) are doing "Elliot Wave Analysis", right?

I'd like to read about it. Do any of you have some "suggest reading" which preferably can be found for free on one of the nets (not necessarily www)

Well, looks that guy with the 5000BTC at 3.80 chickened out.

proudhon, we were making a month-scale prediction and here you're talking about a short-term correction with people cashing out.  I don't see anything wrong with our hypothesis yet.

Fair enough.  It's unclear yet whether this is a short-term correction.  Maybe it is.  But it's just as likely, I think, that it's the beginning of what netrin has been predicting.

en.wikipedia.org/wiki/Elliott_Wave_Principle

http://www.investopedia.com/university/advancedwave/

We hit (4) this morning.

From (1) to (3) is 18 days.  Another 18 days is 6-Jan.
So... my target is between 5.8 - 6.10 around 6-Jan (more or less)   ;D

Goes according to the plan!

You guys are using the wrong figures. You are using the Eliot wave analysis backwards. First it is used by brokers to raise a flag of warning when they make a decision, its there to make them think again before making a trade. The reason is that following the wave is arguably marginally profitable in the short run until something changes for real. Staying on it in the long run makes brokers take big losses.

They are also personal, and have to be based on your trading oportunities and the market movement, not on high/low maximums. Only the relation between those two factors make them usable. If you guys were really there, in front of your computer and gox really had been reacting quickly enough for you to put in a sell order at 4.5 a few days ago or a buy at 3.50 yesterday, then it really counts as your wave. Seing it could have been an oportunity, had you foreseen the spike and had the money, doesnt.

Thus, if you really have found a way to predict the market movement by collectively looking at the hi/low single trade spikes, dont credit the eliot waves. Credit yourselves, because it is completely different and a lot more usefull. At least until the trading bots start using it, cancelling it out.

If you have some tips on risk management I'd love to hear them.


Market predictions aren't personal.  What you do with the information is.
I don't know what you mean by making it "your" wave.  Are you saying a prediction is worthless unless you trade on it?


I see Elliot wave theory as a way of expressing collective market forces in play.  The premise is that those forces move in predictable patterns.  Are you afraid that if everyone starts trading based on Elliot wave predictions, then the market will start to steer around those predictions, making them useless?

Elliott describes patterns that people see, whether they consciously apply Elliott numbers or not, people react to these patterns. The stronger the patterns the more likely they will continue and weaker patterns shed little information.

Where Elliott has a great advantage is to predict in advance. If X happens, then this pattern will emerge, likely leading to Y price. However, if W happens, then this pattern will be confirmed, leading to Z price. This is perhaps what someone meant by "my wave". People who casually look at other's charts may not know how to apply them. Sometime, like late October (https://bitcointalk.org/index.php?topic=49462.msg600309#msg600309), the pattern is so obvious, you can call a top, but at other times you must wait for scenarios to play out. But scenarios are not random. Humans are not random.

But they are, if they are supposed to be usefull.

The basic idea is:
Theese waves are all about predicting the market behaviour in a certain environment. When the predictability gets higher than the trading cost plus the risk of going astray when the market gets driven by real world changes rather than by mass behaviour, trading according to the waves gets profitable. However, it works only if you have the trading opportunity to do so, trying to trade on a wave one cant catch will in a best case scenario cut a big portion of that profit margin. In a worse case scenario it will ofcourse lead to heave losses rather than profit. Using a common wave based on all the trading data will also make you compete with everyone else limiting the profit to when you can put your bids in faster then your fellow traders.

Thus, calculating the waves on ones personal trading ops not only minimizes the risk of cutting ones margin, but in addition is a prerequisite to not be part of the forces that drives the wave rather than surfing on top of it.

Cutting away spikes one cant trade on, movements that happens when one is asleep, busy or at vacation, stretching the time frame when offline and adjusting the tradable volume to the time of the month when one have money and so forth will create a wave that is actually usefull. If the calculations are done right and real world stimuli are kind enough not to upset the behaviour of the traders, that is. 

An amateur market mover might see this as an opportunity.  I would see it as a risk.

I suspect this could backfire when the market doesn't agree with "your wave".  While some people will see the point you've made and follow the pattern, if the overall market doesn't agree, then it will fail.  The experienced trader can tell the difference between a crafted (or manipulated) wave and a more natural crowd generated one, and they may choose to bet against your trade.

How then can a market mover identify waves he can profit from?  He has to pick waves with sufficient energy (volume).

31-Jul has an example of a spike when someone perhaps thought they could spark a new trend.  But the market disagreed.

Yes, one should always look for sustained volume within a price movement. In fact, lack thereof is a an excellent opportunity to take the contrarian position. It's just that those are impossible to discuss and certainly not chart before the reversal occurs.

In fact, this entire Christmas week has been a series of premature ejaculate spikes.