Elliott the Neely way

MoneyTec Forums Trading Strategies Elliott the Neely way

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    • 552

    To keep things simple I will start with the period up until december 2004, this according to market action could be the end of several patterns.
    I attach the full graph in an excel file along with the first part (until 12.2004) as picture for immidate view.

    This graph has been inspected under the rule of Proportion and also the rule of Nutrality. All unneccary values removed.

    Notice I start my chronological numbering (red numbers on chart) from the high of 2003.06.01. if in the future it will seem like previous action is needed I will return and check since march 2003.

    • 552


    First round took a while, mainly because I had little time.
    Anyway here goes.
    My initial tests convienced me to start the count from the low of september 2003. This is because the high of august ’03 completed a correction and thus the previous shape ended there instead of the higher point of June ’03.

    Attached you can find a doc file containing the Pre-Constructive Rules of logic initial placement.
    In the comming days I will try and Isolate each month’s label down to a single option.

    Have a nice weekend,

    • 552

    Some small adjustments:
    Ill admit Im having a hard time narrowing all of those :f3/:c3 waves.
    Another problem I am having is with choron wave 7, labeled X:C3.
    If this wave is indeed an x wave (and I double checked it to be) then how can an :L5 come right after it. An x-wave should join up several corrections and there for it cannot be a second-to-last wave.

    I did manage to narraow waves 21 and 22
    wave 21, the :SL3 can be deleted, there is no :L3 after it.
    wave 22, the :F3 can be removed. If need to decide between a begining of a polywave or its end (First or Last) then market action (the speed in which the wave was completely retraced) dictates a polywave has ended here.

    • 552

    A few more narraowings:
    Chrono 1, the :C3 can be removed. :C3 can never start a sequence.
    Chrono 9, the :5 can be removed. If :5 is the first in a serie then the market cannot retrace more then 61.8% of it, also after it’s retracement the market should exceed the end of the :5 wave.
    Chrono 16, the :S5 need to be erased. for an :S5 to be used, preceeded by an :F3, an :C3 must preceed the :F3 to create a sequence of :C3,:F3,:S5.

    Chrono 6, the :C3 presented is an early age of an expending triangle or a terminal Impulse. no :L3 (to create a triangle) is presented in the near future. and a terminal seems rather unlikely. I will color it with light gray to show it is not completely impossible

    as for chrono 4 (:s5/:5), the :S5 would seem to complete a flat (requiring removing x:c3 from chrono 2 and :f3 from chrono 3) I intend to check it more thoroughly and get back to it.

    • 552

    Chrono 2, the X:C3 doesn’t fit with the assumption that a pattern started with chorono 1.
    Chrono 11, the :C3 should be removed to enable the formation of the ZigZag sequence (:5,:F3,:L5)
    Chrono 13, the label is wrong, this is an R-5c wave, not R-5a.
    New tag is: :F3 {a first leg of an irregular flat or a running triangle}
    chrono 17. I have read this wrong and had to add all available tags to this wave as it suit no condition under R-5B rule’s definition.
    chrono 16: after re-reading the definition of the R-4bi I think the :C3 should be dropped I will dim it with light gray for now. if it is used it will be an X-wave (X:C3). if indeed the X:C# is removed then the :S5 needs to be placed again. I will check chrono 15 to verify its tag.

    This proceedure is a bit tiring due to all the re-checks.
    I will stop the narrowing process and try to put togeter a few patterns, see how that goes.

    • 552

    wo patterns are easily spotted a Flat and a ZigZag.
    for the flat to hold, wave-b must retrace wave-a by 61.8% at least. This is ok.
    Wave-c must be at least 38.2% of wave-a. This is ok.
    The Flat appears to be of a “Strong B-wave” type (b is between 100-123.6% of a)
    For the Zag to hold wave-a should not retrace more then 61.8% of previous impulse pattern. I have not yet identified a previous IM pattern but if such exists which concludes with chrono 8 then wave-a retraces it low enough.
    wave-b is at leasat 1% of wave-a.
    wave-c goes slightly beyond the end of wave-a.
    wave-b is no more then 61.8% of wave-a.
    The Zag appears to be of “Normal” type (check definition of relations between wave-a and wave-c)

    in the next post I will run tests on the flat to verify its validity.

    • 552

    Hi ET, I don’t understand the charts you are posting, suppose I need to read Neely, however I prefer simple not what appears to be greater complication ?????? is all the calculation producing greater trading profits ?

    Posted charts from Precision Trader: http://www.precisiontrader.com/
    the EW utility/analysis is based on Neely and doesn’t recount.

    • 552

    Fib relations tests:
    In the Zag wave-c is very close to 100% of wave-a, this is good.

    Pattern confirmation:
    First problem, wave-c is not completely retraced.
    Secondly, the 0-b line is not broken.
    These two together signal a question to the validity of this pattern. I will conduct more test.

    0-b line is quickly broken, good.
    wave-c is completely retraced faster then it took to form, good.


    Time is alternated between b to a & c, good.
    Price acts the same, this is ok.

    wave-c alternates in time to a & b, good.
    Price is alternated between b to a & c, ok.

    The Flat seems to be invalid. I will go next over its tags and check them.
    The ZigZag is valid and will be compacted. A base label of :3 will be given after which I will check near waves with Pre-Constructive rule of logic to see if tags need to be edited.

    Our first pattern revealed.

    • 552

    Hey there Wallace,

    Good to see someone is following this thread.
    I admit NeoWave is extremly demanding and is much more complecated then other analysis methods.
    I cannot answer your question about profits as I have not finished analyzing the monthly bar-chart, let alone traded on it.

    I am learning as I go and currently found no one to learn with/from.
    It appears that the complexity of NeoWave rejected people from trying to study it. I, however, believe in Glenn Neely. His analysis of the S&P 500 from 1988 (posted in his book) holds until today. that is almost 20 years of succesfull prediction !!

    With all that said, I have to say about the charts you attached that
    a) you braught EUR/USD while Im analyzing EUR/JPY
    b) the chart is analyzed as a candle chart and not a formal NeoWave chart (revision of a regular chart to high’s and low’s)

    I hope that in the end, after all the efforts this method will provide very accurate resaults and allow profitable trading.

    Good luck to you, my friend.


    • 552

    Elliott Waves

    one of the truth’s

    if you just trade trading wave structures you should only
    expect to be right 50% of the time ………..

    so be honest with your self

    ask the question , can i make money by being right
    on halph of time ?

    with an honest answre to this question ,
    only then you can bulid a strategy .

    If Neely is is not saying this – there is cause for concern !

    Accept that you will be wrong 50% with what ever
    wave count that you may like !……………….

    Heres a look at today’s EURO .. ( Short- Term )

    • 552


    This program of yours is counting impulsions which do not correspond to NeoWave (nor EW) rules, alot of overlapses between wave-2 and wave-4.
    I appriciate your conduction of search for a relevent chart.

    Market Waves,
    Your charts are wellcome here but please hold on to Neely and not Prechter on this thread. Also please analyze EUR/JPY.


    • 552


    I did not learn Elliott Waves by Pretcher
    and i dont know Neely’s Tag Work

    and from the looks of things you shoulgd get some automated
    software to do these Neely Counts ….

    Why beat your self up like this ?

    I have learened Eklliott waves ny The writings of Nelson Elliott
    and had my training trading futures since 2002 ……

    but i tell you this …..
    they all have come to capitalize his fame of the name Ellliott Waves.

    the problem why most people fail at Elliott wave is they
    dont read about and study the man Nelson Elliott
    who created Elliott Waves . and they dont seek out
    his work written by his own hand .
    and tyhat’s just to begin with

    Neslson Elliott taught that
    markets move in 3’s 5’s or 7’s and then the correct.

    How simple is that to undestand ?
    Neely will not teach this . because he doest know it !

    but Pretcher does ……

    Pretcher comes close in his teachings , but lacks the understanding
    of applying money management to the actuial trade setups .

    This is first and foremost before you apply anytype
    of technical analysis to any kind of chart ………

    An nd just as importantly
    Elliott Waves is not about having the right wave count

    -It’s about being a contrarian ….
    – It’s about entering the market before the breakout !


    Now i can contribute here….
    but i tell you right now , Elliott Waves are every where !

    Do not be prejiduce to to the markets ……..

    You know my work – If you have come to appreciate it
    remeber, I did not learn Elliott waves trading Forex …

    I learned it trading futures and indexes .
    These are the same markets that Mr. Nelson Elliott traded
    when he observed his findings .

    and by the way Mr. Nelson Elliott did not trade Forex either .

    You have to train your eye to see the shapes ….
    and stay way from wave 4’s .. statistically the end of a wave 4
    is the worst place in a wve structure to be looking to enter a market .
    This is because it is whe consoldation is likely to occur

    The best please to be looking to enter a market is at the
    beginning of a wave C . ( so called B wave )
    – This ties into what Gann taught by the way .

    until next time …

    plrease do not bre biased toi looking at vsrious markets ….

    Have no favorites – just look for the waves

    • 552

    NEED MONEY MANAGEMENT Applied to them !

    On a Trade by Trade individual Basis !

    __________________________________________________ ______

    How many lots to enter in this set up ?

    is the Risk greater than the Reward ?

    How many pips did I loose on my last 2 trades ?


    These are Money Management questions
    and Positon Sizing questions .

    without them you are Doomed ……….


    Spend your time comminig up with a
    money mangement strategy for your
    individual trades that you choose to enter .

    Only then you will be ok …. This is time well spent !

    • 552

    Dear MW,

    I agree with you, totally.
    A trader will forever fail until he learns to manage his money right.

    I, my friend, am not there yet.
    I stopped trading for the moment and I will avoid doing so until I come up with a proper market analysis, there is no point burning my money on learning money management while I don’t have a solid forcasting tool.
    The EUR/JPY pair is volatile enough as well as trend-defined enough to hold easily read NeoWaves.
    I prefer Mr Neely’s approach as it removes all need for subjectiveness. A pattern is either something or it is not. Abide by the rules and you will decypher the market.

    Tommorow I shall return to my study of the monthly chart and in time I hope to find fellow analysts to join me in my efforts of learning this unique approach.

    All my best,

    • 552

    If you want to be a successful trader you should have three things:
    1. Proper money management
    2. Self-control and discipline
    3. Method for market analysis

    The importance is the same. However it is understandable that even if the method of analysis is not the most important thing it should be good enoung. In my opinion the EWT is the best market analysis tool just because it is based on the crowd psychology. The problem with this theory is the subjectivism so one should try to avoid it as possible. The Neely’s method reduces subjectivism so I use it since 2000. The problem with this methosd is its complication but if you put enough efforts and you have enough practice it works prety good.


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