EWI Article: Blaming Market Manipulation is an Obstacle to Success

Apr 14, 2010: 9:05 AM CST

The folks at EWI (Elliott Wave International) released a provoking new article today entitled:

Blaming Market Manipulation for Losses is a Huge Obstacle to Success.

The article encourages traders to take responsibility for losses instead of finding scape-goats to blame.

Losses may have just been the result of a bad outcome from a high-probability trade… or might have been the result of a bad trading habit like doubling down on losers or chasing a fast price move.

“Losses are part of the game” and should be used as learning experiences.

You won’t learn if your loss was a result of random probability or a bad trading behavior if you do not analyze the loss, and instead sweep it under the rug as a painful memory.

I particularly liked the quote:

“You don’t have to be perfect to win in the markets, either; you “merely” have to be better than almost everybody else, and that’s hard enough.”

It’s brief, but thought-provoking!

I’m an affiliate of EWI (interested in the educational content they provide) and glad for them publishing these quick bits of info for us!

As a reminder, EWI is also offering their 47-page “How to Spot Trading Opportunities” e-book free until April 23rd!

Corey Rosenbloom, CMT

9 Comments

9 Responses to “EWI Article: Blaming Market Manipulation is an Obstacle to Success”

  1. convictscott Says:

    This is from the same Prechter who has called a market top continuously since August last year. The same Precter who advises all clients to trade WITHOUT STOPS. The same Prechter who advised clients to assume a 200% leveraged short position in Jan. The same Prechter who on 12 Feb released a special edition of his short term update stating that “The wave count has an EXCEPTIONAL DEGREE OF CLARITY, and that a once in 200 year fall will begin in the next few days”.

    So he was wrong then. No problem, everybody is wrong once in a while (Although Prechter's short term update has been wrong on literally EVERY SINGLE CALL for over a year, on everything, calling a multi-year top in gold just over $1000, for example)

    The problem with Robert Prechter is that he lets his view bias the evidence he presents. He starts with his thesis that a massive fall is coming, accumulates and presents evidence which confirms it (quite articulately actually) and COMPLETELY IGNORES evidence to the contrary. When the market started to melt up, he just published that a fall is “right around the corner”…. coming tomorrow, tomorrow, its just about to happen. On 22 March his title for the Nasdaq was “streaking towards a close” when the EVIDENCE suggested expanding breadth in a distribution phase of a well established uptrend.

    Its just irresponsible, the man is a fraud.

    Quite simply EWT has a fatal flaw. Wave counts work spectacularly, some times. Elliot is a beautiful articulate story and I genuinely wish it were true. It accurately describes price action some of the time, perfectly in fact.

    The problem is with the assumption that because it accurately describes price action some of the time, that it does so all of the time. It doesnt follow. And even if it did, whatever predictive results are garnered from EWT will be totally offset in 99% of traders by engendering a bias.

    Its a childish view to think that we can predict the future. Technical Analysis is a windsock not a crystal ball.

    Robert Precter is a deluded fraud. End of story.

  2. Doug Jones Says:

    Corey the only problem is with EWI is that they have been DEAD WRONG for over 6 months. It does not matter that they timed wave 2 even if you believe in the Wave theory or their interpretation. I am a EWI subscriber and I got to tell you I think it would be better for your viewers if you would reference any other technical or forecasting service. Their short term updates that are done 3 times a week are even worse, They can't even label waves at all right now as they change each week when they are continually wrong. They have been calling for a short term sell off for almost 4 weeks and early called a WAVE 3 down scenario twice in 6 months. EWI never admits when they are wrong or just say we don't know but the targets are. GOD help anyone who has followed there analysis the last 6 months and missed this awesome rally or even worse dare shorted.

    Bob Prechter is a smart man no doubt about, but he has grossly under estimated todays markets and the liquidity that is present. There is just too much money in the world that is going to go somewhere. It's a bit different from 1987 and 2001 when you could not buy ETF's and be globally invested. Markets are extremely manipulated by the fed and many other factors, this is the main reason EWI forecasting is null and void. Social mood will not change unless there is a fear/negative catlyst greater than what we just experienced. Traders are not afraid of deflation or anything else.

  3. Doug Jones Says:

    Corey my bottom line is I would take what EWI says about bad trades with a grain of salt since anyone who has followed or listened to (in their opinion high probability analaysis) has lost their shirt on many bad trades in the past 6 months. I can' t stress enough for you to carefully review their commentary before posting on your site. Gold forecast has been dead wrong, short term and long term. S&P, NASDAQ, DOW, NYSE and now the EURO.Almost all of the others wrong for over 6 months. US dollar is the only forecast that has been remotely accurate. Even a bad clock is right twice a year.

  4. Corey Rosenbloom, CMT Says:

    Doug,

    Thank you for sharing! I'm not a subscriber to the Financial Forecast or any of the prediction services, though I stay generally aware of the gist of their counts. I'm an affiliate of the Club EWI side which features more educational products and articles as a separate part of EWI than the forecasting side, which I have stated in prior comments that I do not agree.

    When doing Elliott Wave updates last year, I repeatedly stated when asked that I do not support, nor am open to, any wave count that places us in a Primary 2 with a Primary 3 to take us down to very low levels. I still stand by that assessment.

    The Elliott Wave Principle is a broad topic and EWI is not the only service that provides wave counts, but that is another issue.

    As an affiliate, I stay towards the educational content and the “Club EWI” articles and information (such as general trading tips, psychology, sentiment, basic Elliott Wave information, etc).

    I probably should do a post to clarify the distinction between the forecasting side of EWI, the international forecasting portion, and the educational portion (including webinars, courses, books, and premium/free articles). I support the education.

    I have not promoted EWI in the last few months, and chose to link to this article because I was going to address the topic of market manipulation (a popular topic currently!) at some point, and found this article already did that with an educational slant.

    I appreciate your comment and if others feel the same way you do, I will reconsider my status as an affiliate, as I am very selective and careful with whom I become an affiliate to link to their educational content.

  5. ibiza2000 Says:

    The thing about market manipulation is that it's only manipulation when you're losing money! Ever noticed that LOL? I don't think you'll hear anyone who's been generally long for the past year complaining about manipulation. It's just those who have been in the sidelines missing out, or even worse, trying to short. Blaming outside manipulation is not only unproductive, but intellectually disabling in my opinion.

    As for EW, it seems to me as just another attempt by some to bend the market to their will. No one, no matter how smart or clever they may be, can predict the future. Whether we like it or not the market is going to do what it's going to do. The constant uncertainty of the markets can drive you crazy, and I think many of us will always be tempted to deal with that uncertainty by trying to force the market to conform to the tenets of one scheme or another.

  6. The_Grim_Reaper Says:

    All gaps will fill on the downside. Oh, there are about 16, including the very morning the market took off in early March, 09. Gap theory cannot be refuted, so yes, it is a virtual certainty the market will drop down to revisit the lows.

  7. The_Grim_Reaper Says:

    It's also amusing that people haven't quite figured out what's happening in the big picture yet. We're right around the point in the market where Lehman went bankrupt and the market crashed. In the backdrop of this “bullish” rally (on no volume and weak AD), we have an entire country in Europe on the brink of default. And people think Greece is no big deal? A country default is much more significant than Lehman, and the implications for states within the US should cause a P2 collapse as more and more countries and municipalities default due to low tax revenues. I'm amazed at how brazen the bulls are, and how low volatility is, in the wake of these extremely significant developments.

  8. The_Grim_Reaper Says:

    All gaps will fill on the downside. Oh, there are about 16, including the very morning the market took off in early March, 09. Gap theory cannot be refuted, so yes, it is a virtual certainty the market will drop down to revisit the lows.

  9. The_Grim_Reaper Says:

    It's also amusing that people haven't quite figured out what's happening in the big picture yet. We're right around the point in the market where Lehman went bankrupt and the market crashed. In the backdrop of this “bullish” rally (on no volume and weak AD), we have an entire country in Europe on the brink of default. And people think Greece is no big deal? A country default is much more significant than Lehman, and the implications for states within the US should cause a P2 collapse as more and more countries and municipalities default due to low tax revenues. I'm amazed at how brazen the bulls are, and how low volatility is, in the wake of these extremely significant developments.