Category: Money tips Release Date: 2006-11-01
For many investors new to the theory of waves, to wave analysis of successful programs used in the real market is not an easy thing. Therefore, the wave theory and writing, Robert. Prechter talk time, is to learn how the practical application of wave theory, no better way of. The following is an excerpt from Prechter's best-selling book "Prechter's view" on how to apply the wave theory, in-depth comments.
Q: The average individual investor really understand wave theory?
A: I believe that it is understandable that ordinary investors wave theory. With two nights to see the book, most people will be able to grasp the basic idea of wave theory.
Q: The application of wave theory is a technology or a science?
A: The market research must be scientific, but in itself is indeed a science, although the science is still in its early stages of development. This is with the majority of the social sciences in the development process is the same. Thus, as Charles. Collins often said, the wave theory, the application is an objective discipline. According to this reason, only a strictly fact-based judgments in order to be considered valid. If you ignore the evidence but their own hope or inspiration to study them, then you will do punished by the markets. It is only through analysis and study hard to get reasonably correct judgments. Judged the worst are those who put the theory as an art, relying on their own impulses and imprecise understanding of "Painting" wave of people. Unless the ratio of the various wave patterns and the possibility of performance to achieve quantifiable, otherwise, the application of wave theory, will always retain a craft (craft) many of the features, in order to master, not only to think about, but also in practice. Webster's Dictionary of the craft (craft) explained that "acquired through experience or study technology", "systematic use of knowledge."
On the basis of these principles, wave's analysis still need some artistic minds in order to do well because of the volatility of the market itself is like painting pictures, you must first sentence commensurate with the proportion of the adequacy of coordination before they can say that this wave has been completed. Some rational mind is not suitable for this work.
Q: You once said that understanding of wave theory is relatively easy. Well, applied?
A: The wave theory, the basic idea is easy to understand, but to master all the intricacies, still need to spend a lot of time to learn. However, once you have mastered them, then in the market to recognize the various forms has become easy step. When you can identify the five wave-driven, ABC triangle, when the adjustment and Eliot, just to be able to determine the selling points on the chart at a glance and a selling point, without the need for additional work. No matter how far as I know, wave theory provides the best efforts of rate of return.
Q: But you said that you wave theory, only a relatively small number of people have been mastered. Do you think all investors how many people have mastered the wave theory out?
Only those who are willing to pay extra effort. Frankly, only a small group of people. I think everyone will find the wave theory is indeed fascinating. Even if a person other than the market will find it is a very interesting concept. However, only those willing to put their lives in the market as a very important part of the person to apply wave theory. If you do not pay something like that, then you can not make money. Wave theory is very demanding, because it is the market demand. The two are the same thing.
Q: incredible! Such a structure, simple and easy to understand, but because of the inherent uncertainty, but demanding and trained applications.
A: Well, the rules of chess is very simple, but to win a game of chess is not easy.
Q: The analysis of the nature of waves is the possibility of the right sort. Movement in the market in the process how to do it?
A: First of all, you have to through the application of wave theory, the rule would not weed out the possibility. Relay point in any one market, there are some definite things are certainly possible. For example, a specific reason, a large five-wave down wave after a primary five up definitely not all from the bottom of the rise in retracement may occur, but further increases are necessary, therefore, declined to predict at this time should be immediately appears at the bottom there are new, it should be excluded from the market, the possibility of running outside.
Will not weed out the possibility, the remaining is the possibility of analyzing the list looks like a headache. At this point, every possibility must be judged through the wave guide appropriate analysis, including alternate, channels, Fibonacci ratios between the relative size of waves, based on wave form analysis of a typical target price, trading volume, and breadth, etc. and other guidelines.
Where (a) satisfy a maximum Guide (2) the most appropriate to meet the guidelines judged to be the most likely to run as a market orientation. Satisfaction plays a number of judgments can be used as the second choice program, and so on. Sometimes we call it the preferred program and replacement program.
After analysis should closely observe the market in order to analyzing the possibility of a loss or weakening when deciding whether or when to use the second best program for replacement.
