Elliott Wave Principle by Robert R. Prechter Jr. and A. J. Frost
Before I took a serious look at
Elliott Wave technical analysis, I was of the (common I believe) opinion that it didn’t work, wasn’t specific
enough, and was a couple of steps down from Voodoo in my list of ‘sound trading methods to think about using’. All that changed when I took a serious look at Elliott Wave International and specifically
the book Elliott Wave Principle (EWP) by Frost and Prechter.
I would consider this book the
definitive guide to the theory, history, and practical application of Elliott Wave (EW) to trading. If you are only going to read one book about the subject, this should be it. Now I’m not saying EW is perfect, but that it is a lot more sound, robust and well-defined than the
general "here say" would have you believe, and this book covers the whole thing from history to application.
I found the book to be relatively
easy to read, but very hard to get my head around without practical application. Imagine
a chess Grandmaster writing a book on how to play really good chess. They could
describe the rules of the game, the guidelines and overarching principles, and specific examples of good play, but chess is
a complex game and it would be difficult to really get a feel for the whole thing without actual play.
Exactly the same can be said for
EWP. The book goes into extreme detail about why 5 progressive followed by 3
regressive waves is the most efficient way for a market to move, and sets out an amazingly detailed and complete list of rules
(rarely if ever broken) and guidelines (often fuzzy, but useful all the same) for the identification and application of wave
theory as well as a nomenclature for identifying the complete range of cycles from the tiniest ticks to the secular movements
that take decades to complete.
I guarantee you will have to read
sections of this book more than once to get the underlying meaning, and also have to practice the application of the theory
in real time before you really ‘get it’, but I believe it is well worth the effort – even if you ultimately
don’t end up using the methods, there are many traders who do, and so this is a self-fulfilling technique that works
because people use it, and people use it because it works.
I would consider myself a complete
beginner in this technique, but I know enough to know that EWP contains most of what I’ll ever need or want to know
about Elliott Waves.
Buy Elliott Wave Principle at Elliott Wave International.