Tip:
Highlight text to annotate it
X
Hello, and welcome to realityfuturestrading.com this
is Ray Burke here, and in today's video, I'm going to be
going over my take on counting legs or, I guess--
well don't we call in my take on the Elliott Wave.
I am going to be using my two favorite charts to enter
trades on, and the first thing I want to touch on here is the
Hawk Micro-Scalper.
So let's go ahead and let's get started here.
All right, now the big question is, with wave
counting, is, is it subjective?
In my opinion, the answer is going to be yes.
So what I've done is, I've created a wave counting method
that actually works for me, something that I've studied,
and tested, and something that I use on a regular basis.
Now, the first thing that I look for, before I start
counting waves for the Hawk Micro-Scalper, is, I look for
the bars to pass back through the micro line.
And I look for them to slam into the macro trend line,
which is what we're seeing right here on the Hawk
Micro-Scalper.
Now this is where I begin to count.
So what I'm going to do is this, I am going to go one,
and get my pull back.
I'm within a tick or two of the micro line.
And then I am going to count this here as leg number two.
All right, one of my own personal little trading
secrets that if you tell anybody about this, I'll have
to kill you, I'm kidding, is that I only take the trades
that are on the second leg.
I will not do a first leg trade because, as you can see
here, I do have a green filter.
I do have my green warning, as well as my green long entry
triangle, and a green hash.
However, the hash is below the micro trend line.
And I do have yellow bars.
That's too many strikes against me.
I do have students that are taking these trades, though,
off of the macro trend line.
So that's up to you.
I prefer not to take this trade.
I would rather wait.
I'd get my pop.
I'd get at least a two-bar pull back, warning dot, long
entry triangle.
I am within a tick or two of the micro line.
Hash mark, and then I'm off to the races on leg number two.
Now, the other question I get is, what
about leg number three?
And the answer is yes.
You can take the leg number three trades.
However, I personally find that the leg three trades are
not as strong as the second move.
Now you can see here that by passing on this leg three
trade, which was perfectly valid because the hash was
above the micro trend line, I did miss out on this trade
right here.
But like I said, my point of this video is to show you how
I use the miniature version the Elliott wave, and how I
count the legs.
You may count them different.
And what I suggest is, that you use the method that works
best for you.
So leg one, leg two, and then leg three.
Anything after length three, I won't even entertain the idea
of taking a trade.
So what I'm going to do next is, I'm going to show you how
I use my Eight-range Eagle Trend Trader to
count the legs as well.
OK, here I am with the Eagle Trend Trader.
And as you can see, we're definitely in an up trend here
for September 11, 2012.
Now this chart gets a little bit tricky because what we're
dealing with is, we're looking at a lot of noise and a lot of
choppiness here between 107 and the open Mountain Standard
Time, which is 7:30 in the morning.
So once again similar to what I do with the Hawk
Micro-Scalper, I wait for that sucker to tag my hard edge.
And that's just the point that I've chosen, OK, this is what
I'm going to do, and this is what I'm going to stick with.
Now like I said, counting legs in wave can be very, very
subjective, if you're not careful.
However, I think it helps to remove the subjectivity when
you just choose the way that you're going to start counting
legs, and then that's what you stick with.
You may not agree with what I'm showing you right here.
And that's fine, I may not agree with what you're doing.
Regardless, I'm not going to argue about it because I have
chosen a method that works for me.
So let's go ahead, and let's start on this one right here.
So I'm going to go ahead and I'm going to start my first
leg down here.
And I'm going to go one.
I'm going to do my pull back.
I'm going to go two, and then I get another pull back.
It's a little bit deeper on this pullback here.
And then I'm going to take a leg number three right here.
Now one of the dead giveaways for this particular trade set
up right here that I don't want to take leg number three
is price, and the body of the bars has dipped
down into the band.
If it dips down into the band, I'm definitely not interested
in leg number three.
And again, another super secret trading
method that I use--
not really--
is, I only like to take the trades on the second leg and
ideally here, price dips in a little bit, but the next bar
and my entry bar are well outside of the band, which is
giving me eight signal that, you know, more than likely,
this is going to be a pretty high probability trade.
Now a question you're probably asking me right now is, why
didn't I count do this little number right here?
Well, I don't count this as a pull back unless I have at
least two bars where price is pulling back.
This is just a little bit of noise, a bump in the road, and
the question, also, you're probably asking is, did I take
this trade right here?
All right, depending on how fast the market is moving, I
may have taken that trade.
But I'll tell you, more than likely, I would have waited
for at least a two or three par pull back, like I have
right here, to take this trade.
All right, well I hope you found this video to be
informative.
And like I said, you don't have to do exactly what I do.
I mean, I'm not the end all be all-- nobody is.
What I'm hoping to do is show you that this is one of the
things that I do.
And if you disagree with it, that's fine.
I'm good with that.
If you like what you see, maybe use it to adapt it to
your own the method of counting waves.
That's even better.
So that being said, if you have any questions, please
feel free to contact me at ray@realityfuturestrading.com
and have a good day.