Anything You Want ..

With apologies to Arlo Guthrie, 'You Can Get Anything You Want at Alice's Restaurant'. There is an expression If you give ten of the same charts to ten different Elliott Analysts, the result will be ten totally Different Wave Counts. I want to tell you why that is. Here is a chart.

This chart was produced using NO METHOD at ALL of labeling the waves. And, with NO METHOD or ten different methods, it is only logically true that every such chart will be different. I have proved my case conclusively. The No Method involved was 1) why isn't there an R after the Q? 2) Why is there is a 1 after the Z? 3) Why is there a T after the 1? 

Using "No Method" or any method of your choosing, one can come up with any labeling scheme at all. I call such pictures cartoons. They might try to represent something real, but they are often just a glossy fake. 

Becoming Competent

I learned early in a different career that Mastering something requires going through stages - stages that most people don't wish to go through. Those stages are formally called 1) unconscious incompetent, 2) conscious incompetent, 3) beginning mastery, 4) intermediate mastery, 5) master / teacher.

Now, here's the deal. A lot of people have heard of Elliott Wave, but 1) they haven't taken the time to read and absorb the literature for themselves, 2) they watch a video or two or twenty on YouTube and think they know something, and they want to start making money using Elliott Wave. This is the stage called the unconscious incompetent. They don't know that they don't know.

Conscious Incompetent

When they start to read a little about Elliott Wave and the labels used, they may generate a chart like the one below.

They try, and the whole mess looks corrective to their eye. And they are sure they have two zigzags. OK. But notice, this is done without regard to any simple standard tools - 1) like trend lines, or 2) different levels of degree labels.  Degree labels? What the heck are they? Only when you read Elliott, and internalize the information for yourself, do you see what Elliott's idea of degree was - and what he intended by it. But the conscious incompetent at least knows they do not know all of Elliott Wave, and they start digging in deeply - to the reading and the work to be done to understand it.

Conscious Competent

At some point in the development, the person begins to put a few of the factors in wave analysis together in a sound way. They might add a few trend lines.

They begin to understand the various terms, the three classes of impulses, the various types of corrections, that the degrees are relative, and they begin to commit them to memory as they show them on their Elliott Wave charts. But even this is a limited tool set.

Beginning Mastery

At this next stage, the person begins to demonstrate their real knowledge of the topic.

They can locate triangles and understand and apply the various levels of degree labels. They know the difference between Primary, Intermediate, Minor, Minute - and all the rest. They take the time to do it correctly. They look at chart after chart; hour after hour, and they not only try to find the count, but they also follow-up to see if it worked as predicted. Further, they begin to apply a Fibonacci ruler in earnest, and look for the different relative lengths of the waves.

Is this boring, already? Are you tired and want to stop? That is what gets most who reach this stage. My head hurts. Is this really necessary to make money? No. None of it necessary to make money - maybe I'll do something else. See?! I made money without it. I'll stop now. I've read it all. I no longer need to find out or try out anything else.

Intermediate Mastery

Those who don't stop and push through add a few more tools - like looking for divergences - knowing that divergences don't always work the first, second or third time. They might add a relevant moving average to make sure their count shows good form and balance.

Their chart might begin to look like the one above - and they know why. All of a sudden - people at this stage are speaking a common language. Their charts begin to look the same! The ten different analyses are gone. But there is still something missing.

Mastery / Teaching

People at this level add an additional dimension to their work. They consider the variable of time. Further, they are able to explain what the wave principle is for AND what it is not for. They are able to explain WHY it works, WHEN it works, and when it does not. People at this level have one method, and, if they are using that method they arrive at ONE conclusion - not ten.

What is it going to be for you? Are you going to put in the time and the effort? Or are you going to generate the 11th chart, the cartoon?

It's up to you to decide. Have an excellent rest of the weekend.

TraderJoe