Elliott Wave analysis states that a news or an event shall arrive to justify the forecast and not the reverse.
What truly moves the market? Sentiment. What is sentiment? Fear and Greed....an unmistaken aspect of duality.
There is another famous saying: "What are words, but symbols of symbols, hence; twice removed from reality." Thus if words are used to describe our feelings, emotions or state of mood or state of mind, then it is a twice removed reflection of thought which is cyclical. Technical Analysis attempts to measure the cyclical nature of thoughts. Just because TA tools are twice removed from reality does not mean they are useless. They actually have surprising level of superior accuracy than fundamental analysis of news and events.
A cynic would say that Technical Analysis is near perfect only in measuring the past. True but they are also misinformed. An accomplished artist in any endeavor always stands out by their evidence of performance. The population of Technical Analysts is no different than our current wealth spectrum. We have the many poor which is equivalent to near always wrong Technical Analysts, there is the middle class or equivlent to good but not great TAs and the very wealthy, the top 0.01% who just stand out, and these would be similar to the near perfect Technincal Analysis Gurus. They are the Mozarts of TA, a rare gem of talent. These giants of Technical Analysis like WD Gann, R.N. Elliott, John Magee and Robert D Edwards left their legacies so we students can also aspire. They taught and evidenced that TA is an art and allows a high degree of accurate forecasting.
Many think that fundamental news drive price direction. Or events such as an upgraded mining algorithm, higher levels of adoption, government intervention or a myriad of other "reasons" cause prices to either rise or fall. I disagree. I believe that news and events are the results of sentiment. Sentiment does not follow the news and events but rather the news and events follow sentiment. Therefore, greater accuracy lies in first measuring sentiment. Elliott Waves and Technical Chart Pattern Recognition is designed to do exactly this: Measure the ebs and flows of sentiment.
Elliott Waves, in the hands of a seasoned practitioner, can help discern how sentiment might lead prices. This is what I mean by Elliott Waves allowing us to take a peak around the corner. It CAN NOT BE PERFECT as at the end of the day, EW still only charts the reflection of sentiment, but since sentiment leads fundamentals, its forecasts are closer and more accurate than fundamental analysis.
Here is a link that exemplfies and dissects the question: Does the Federal Reserve Lead the Interest Rates or Follow it?
https://www.elliottwave.com/Interest-Rates/Do-Interest-Rates-follow-the-Federal-Reserve-or-do-interest-rates-lead-and-the-fed-follows
hello @haejin, the more i read up on this, the more i believe it. thanks
To me, TA is psychiatry for a biplar nature of Man's fear and greed states of mind.
Great post. I think the reason why TA is dismissed by many is because there is a lack of traders with established, audited trading track records. TA is also very subjective and ambiguous, especially Elliot Waves, as there is a lot of room of interpretation.
Btw, do WD Gann, R.N. Elliott, John Magee and Robert D Edwards have trading records or no?
I believe so but I dont have that source.
Bravo! Agreed.
I agree Fear and Greed are big drivers but Could there be an argument for adding impatience to that list.. Take BTC right now it can't make its mind up to shoot up or down. I suspect a lot of inexperienced traders, new to crypto, who caught it at $3000 might get bored and cash in on profits rather than waiting until BTC decides which way to go ?
Just a thought
afaik, this was certainly the case years ago (dumps by impatient btc traders), but now, dunno..
Just a thought but for sure Fear and Greed is what drive prices
What is the dual opposite of impatience? Patience. This is only a guised presentation of fear and greed.
It makes sense, that fear and greed are both motivating Chinase government at the same time to close Bitcoin exchanges - fear of loosing control over financial sector and greed to have bigger cut by introducing some new taxes/regulations or a coin controled by them instead of Bitcoin.
Nicely put. For me the key is that China uses the guise of money laundering to mask their fear of losing control of the masses. China also knows that without the support of the masses they are finito.
Hi, nice post. Could you help mine out a little!!!
https://steemit.com/life/@glasscannon/this-image-is-about-our-family-and-was-made-by-our-family-with-love
Thanks a ton :)
Если бы только в жадности руководства стран было дело, то с этим еще как то можно было бы бороться, но жадность не претит и простому обывателю-буквально вчера хакеры остановили работу одного замечательного сайта. Сработал заказ конкурентов и результат налицо. Больше 10000 людей лишились пусть небольшого,но заработка. Человеческую жадность не излечить.
Google Translate says:
If only the greed of the leadership of the countries was the case, then this could still be dealt with, but greed is not disgusting and the common man in the street-literally yesterday hackers stopped the work of one remarkable site. The order of competitors has worked and the result is obvious. More than 10,000 people lost even a small but earnings. Human greed can not be cured.
@haejin says:
Greed and Fear are the two dualistic emotions that drive the markets. These emotions have wave like ebs and flows and thus are reflection of human sentiment. It can be measured but not perfectly as what are words, but symbols of symbols, hence twice removed from reality.