I really enjoyed Juan’s presentation today. There are so many levels on which I’m learning that it is going to take some time and practice to put it all together successfully. I do think that I can trade BO-3s successfully with my trade plan. It is very conservative and only gets me in on what I expect to be really sure things, but it won’t trade very often. And I feel that if I can show in a Demo that I can make consistent profits then I can graduate to real money and begin learning lessons on a trading level.
The most basic level of learning is the materials themselves. You really have to be able to recite the rules for each trade, the setup, the trigger the stop and the exits. And you need to know the Elliott Wave Principle at least well enough to understand a count when you read it from somebody else’s chart. But ultimately, you want to be able to count waves with confidence and that just takes counting lots of waves. You also need to know the Fibs. But once you have those basic things and you know your money management, the rest of the material is refinement, that we can pick up over time.
But there is another level of learning that has to take place. You have to understand how to move between the time frames and that isn’t quite as easy as it sounds. All of my simulation trading so far has been on a single time frame, which is probably why I favor the BO-3. Tonight I tried my first run at trading a Chart Group on three time frames, trying to catch all six trade setups. I sent myself back 9 months and started trading in Replay Mode.
I immediately caught a great BO-3 on the 5-minute. There was a BO-2 on the Hourly, and a BO-3 on the 15-minute. So, I entered the trade with a nice close stop and the trade took off and I used the rule to go up to the 15-minute chart which got a close below the Filter with a Trend Line Break. But I forgot to apply the rule again to go up to the hourly chart, which was still above the Filter.
I completely dismissed the hourly! Shamefully, I started to try to trade PW trades on the 15-minute! Embarrassing, but true. So, the point is that it is really easy to mess up. Frankly, I was so pleased with profits that I was too eager to get out and then I got lost! It is really kind of funny, there is certainly a need to train the brain to do that, it isn’t at all natural. We have a real tendency to get fixed on what we want to see.
It was 1.14 gain on a $35.59 entry, or 3.2%; but, I should have been up on the 1 hour chart where the exit would have been a 1.97 gain or 5.5%.
I not only dismissed it, I traded trades against it until I realized what I was doing.
Now, I have the feeling that it’s just a stupid mistake that you make once and you never forget it. But I also fear there may be several stupid mistakes lurking out there.
Job one is to train myself to move between the three time frames more fluidly.