RET, Elliottician.com and Elliott Wave international

Today I received this e-mail from TD:

Hi Juan,

I have looked through your DVDs - your effort is commendable! I have decided that I want to go headlong into EW pattern recognition. I am interested in doing directional swing trading as I cannot risk the amount required to trade a PCCRC just yet.

I have purchased the RET software with the 2003 power pack but do not have access to the old courseware yet - have contacted RET support for that. I am told that the old course is obsolete and is replaced by the '8 easy steps to trading' video using 2007 power packs. My question to you is:

1. Is the old course material still valuable to learn pattern recognition etc or is the new power pack sufficient to trade?
2. With the new power pack, can you analyze a long term chart since its IPO? The 8 step video I saw, analyzed just the shorter - more current time period.

I do not want to solely depend on the software for my analysis. I'd like to learn the stuff well and be able to do so on my own merit and look to the software for confirmation. That is the reason I was interested in the old course.

Your honest advice is much appreciated. Thanks for your endeavor in sharing your knowledge and efforts -it is deeply appreciated!

Tanvir

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First of all, it is important that I inform you that I have become affiliated to Elliottician.com and Elliott Wave International. This is because I so often quote the Elliott wave theory, that they feel that it woudl be to their advantage to share content with this site in exchange from references to them in this site. I DO recommend their products and services for anyone getting started with the Elliott wave theory. I use them myself. Please be sure that you mention this site when you purchase any of their products as the source of information. I will be paid a commission (and this is important that you know), I will put to use in the posting of videos in my private blog (you can participate in this blog with a contribution).

Every time money is involved, objectivity is affecte. Until now, however, I have been able to discuss all issues in this blog with an objectivity and honesty that I do not want to lose. I intent to keep it that way. I intend to point out the flaws and weaknesses of the Elliott theory, the RET or any commentary made about Elliott.

This is my view on software of any kind, including the RET: Be cautious. Please first make sure that you know what you are getting. Understanding the Elliott wave is a life-long endeavor. Rich Swannell, founder of Elliottician and creator of RET would tell you so. Understanding the Elliott Tennets and thus pattern recognition would be the first step. Be sure that you buy some books first (I recommend 3 in my first DVD), specially the Beckman, which was the first I ever read.

Then, train yourself in pattern recognition. I have given you some tips on using Telechart or IQcharts to look for bearish and bullish candidates. Wave B of a zigzag and wave 2 of an impulse are ideal set ups, but you need to understand other patterns to avoid confusion. Here are the most common patterns to look for:

1. Impulse (IM).
2. Zigzag (ZZ).
3. Double Zigzag (DZ).
4. Flat (FL).
5. Double 3 (D3).
6. Contracting triangle.
7. Triple ZigZag (TZ).
8. Triple 3 (T3).
9. Ending Diagonal.

If you can master these patterns, you know 95% of the Elliott theory. The best way I know to learn these patterns, however, is using the "Elliottician Speed Test Game". This was a little software application that was part of the original "Elliottician Certification Course" that was sold to all RET users and actually required to pass before having access to RET. The Speed Test is now built into RET. If you already have the software, all you need to do is fire up the game from the HELP menu in the RET software. Now you are going to say: well then I have to buy the software to learn pattern recognition anyway...!

Well, I didn't. I only bought my copy of RET about 2 years ago. I have been trading the Elliott wave for 12 years. So, be sure that the Elliott wave is for you, before you buy any software.

Some of you may have already bought Advanced Get and/or Profit Source, and have been using the Elliott wave theory with that software for a long time. I do have Advanced Get. Unfortunately, Advanced Get deals only with Impulse waves and does not cover all possible patterns. This is why it is so critical to learn to recognize the patterns. If you already have Advanced Get or Profit Source, you could still exploit their capabilities because it provides entry points for "wave 4" and "wave 5" trades. Some of these are actually zigzags, and you could select candidates among these set ups if you understand pattern recognition.

If you are like TD and already an RET licensee, then you are in for an additional surprise: The course is no longer available, it is considered obsolete. No longer do you need to understand the entire historical count of a specific stock to trade it, which was the basis of the certification course. Now, all you need to do is find a pattern in any market which would fit the Zigzag appearance from the beginning of wave A to the end of wave B. Once you are able to recognize this pattern in any time frame, you can expect a wave C to develop. So, all you need to know is in the newest series of videos Swannell himself has prepared for new users or anyone else interested in this approach:

http://www.elliottician.com/RefinedElliottTraderOnlineHelp.html

There is one weak point in this strategy: You need to select a candidate to be tested in RET for the zigzag pattern. In my most recent videos (private blog), I have been showing how to pick a few candidates from a list of dozens that meat a basic profile of moving averages and stochastics (see DVD #1). I can pick bearish and bullish candidates and then take them to RET to see if the zigzag pattern fits. Using RET I am able to estimate the target and the time by which to reach it, using Swannell's method.

This is not to say that I would abandon any further understanding of the Elliott Theory because all I need to recognize is a zigzag in progress. But if you are able to recognize the zigzags in daily charts, you can easily become a swing trader. That is not a bad place to start.

If you own Profit Source or Advanced Get, the set ups are quite similar: A rally followed by a pullback, and some entry signals.

You can trade puts and calls with this strategy, as you would with the "Quantum Swing Trader" method or the Type I or II trades. My word of caution would be to be sure to include trailing stops. In this, again, Swannell has created a stop loss approach that seems to be worthy of examination and paper trading.

Nevertheless, I would like you to consider the PCCRC with a bearish or a bullish spin (as I have described in my videos), even for this kind of set up. Why? because you can easily limit your risk. Do you think you do not have enough money in your account to play the PCCRC? well, if you enter the following structure: -1c, -1p, +2c, +2p, you may get away with a max risk that is 2% of your account, the debit (or cash requirement) should not exceed 10% of the capital of your account for any indivitual trade. This money and portfolio management strategies have been discussed in my disks.

Finally, if you want to receive my DVD's please send me an e-mail at Paperprofit1@gmail.com. Once you have gone through the disks, you will receive an invitation to participate in the private blog were additional videos are posted. The cost of this materials is really minimal, and are meant to cover only my costs. The Private blog is by invitation only. A contribution is required of all members.


Here are some important Elliott Wave Links.

1. Elliott Wave Tutorial: http://www.elliottwave.com/a.asp?url=/wave/tutorialclub/&cn=7sotd

2. How to Trade Elliott Waves: http://www.elliottwave.com/a.asp?url=features/howtotrade&cn=7sotd

3. Elliott wave Video Crash Course: http://www.elliottwave.com/club/default.aspx?id=16272&aid=2744