Copper: Re-Presenting The Old Primary Elliott Wave Counts 13th Nov 2017

Nov. 13, 2017 12:47 AM ETCUPM, CPER, JJCTF
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I began my journey in the financial markets at the peak of the financial market, just before the collapse of the market. I was there at the peak of the market. Then, I started where most undergraduates start: fundamental analysis. Although I took up some business and finance modules, my knowledge of the finance and fundamental analysis came from extensive reading. I probably read all the classics of fundamental analysis, yes, including the bible of FA, "Security Analysis" by David Dodds and Benjamin Graham. 

Along the way, I also study technical analysis and also read through the TA Bible "Technical Analysis of Stock Trends". After a few months, I realised that, in terms of methodology, I tend towards TA, however, I still feel that something is missing in the formula.

My first venture into the professional trading world happens just after graduation and I was fortunate enough to land myself a trading internship opportunity with Singapore's then biggest and probably most successful Macro hedge fund, Asia Genesis Asset Management. It was there that I was able to fill in some gaps in my understanding of TA from the senior traders and how to filter news and formulate macro view from the managing director. However, I still feel that something is missing but there are clues lying around.

"Market Wizards" is a required reading in the hedge fund and we also did the Van Tharp Trader Test. I was categorized as a "Strategic Trader" and the representing trader is Paul Tudor Jones - who is a market wizard. I read his interview more than 10 times over the years and from it, one thing stood out for me: he recommended Robert Prechter - and this became my first exposure to Elliott Waves. It was 2009, and I did nothing about it.

Somewhere in 2010, I found "Elliott Waves Principles" in Kinokuniya Books Stores but it was selling for more than S$100 (or US$80). I took the plunge and bought it but found that it was quite a hard read and even went to our National Library video section to watch a very old video on an EW presentation. This video filled another crucial gap: the concept of alternate counts. I did not manage to finish the book even though I know somehow that I have to in order to complete myself as a trader.

On and off through the years, I restarted reading it but never got down to finish it. Year 2016, I pick up "Bloomberg Visual Guide to Elliott Waves" and it was this book that really enables me to count waves effectively from price action alone. After this, I was able to go back to Elliott Waves Principles and found myself able to follow what was written inside easily. I completed it and I think completes 90% of the hard skill of wave counting.

I began to spend more effort to find out more and purchased books from EW International and thus educated myself to the theory behind EW (Socionomics). I began applying my knowledge much more confidently. 

Another part of the puzzle that I didn't realise I was missing came to me in 2017 when my trader colleague in SLC introduces me to videos presentations of the Taiwan Wave Master who specialises in Fibonacci Time counting. 

Now EW is the primary technique that I used analyse charts, trade, and manage risk. 

Over the years, I have to learn and unlearn many things before I eventually found the one technique that resonates with me. However, like all the different techniques out there, no matter which one you use, their uses have limits and should be applied only to where they are supposed to be used for. If you have doubts, given that I have studied and tried most known techniques out there, you can give message me if you seek clarifications and I will try my best to help.


Summary

  • Copper has moved down as forecasted.
  • However, the recent wave up and a look at the bigger picture fores me to reinstate the original primary count.
  • The risk-reward is really now more favorable to long Copper than to short it.
  • Place your stop below ii or Y (in my chart)

Today my colleague came over to me asking me about the Copper Elliott Wave Counts, specifically to the latest downwave (b to Y in the chart below). The question is really about the wave up near W price level - whether it is a wave "iv" or an "a" wave.

Copper 30m 13th Nov 2017Personally, I prefer not to look into the smaller counts or smaller time frames unless things are really unclear. But the inquiry made me look into the details of the Copper wave forms, did Fibonacci price analysis and eventually to decide whether to reinstate the old primary counts or continue with the old alternate counts.

Sometimes this is the headache of using EW with leveraged products and thus practitioners always keep both. But I prefer a cleaner chart and really dislike too many compounded wave 3. Thus, I present you with the old EW counts here. 

Note that personally I do not have a bias which to use and I prefer the market to tell me what to do. If it breaches the low, use the downtrend count, if the support holds and I started seeing 5-waves moving up, use this.

From a risk standpoint then, the trade should clearly be taken from a break-out perspective. So really, what you should do now is to sit and wait. At least that is what I will do.

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