What is Wrong With Elliott Wave?
And What is “River Trading Technology”?
Answer:
Since I have been incorporating Neely River Trading Technology
in my NEoWave Trading updates for nearly 2 years, it's time I explain
this revolutionary concept.
If you have known about NEoWave for a long-time, you've noticed my
trading style has transformed the last 2 years.
For the first 20 years of my career, all NEoWave (and old WaveWatch)
services focused on "predicting" markets using wave theory. Because of
the detail I attempted to achieve with my forecasts, the process might
consume as much as 12 hours of my then 15-20 hour work day. If structure
was clear, the second step of the process involved designing a trading
strategy that took into account all possible preferred and alternate
scenarios.
 If
a position was warranted and activated, the third step involved managing
that trade using stop-loss orders and profit objectives based on my
presumptions of wave structure and the outlook which it implied. While
on rare occasions that approach worked spectacularly well (such as the
2000 - 20002 period in the S&P), it left much to be desired at least 50%
of the time.
After pursuing the universally accepted 3-step process (Forecasting,
Entering, Managing) for nearly 20 years, 7 years ago I began to question
its validity.
Why? Even though my forecasting abilities over the prior 20 years
had improved several orders of magnitude, improvements in my trading
were only incremental. That perplexed me for two decades and was
extremely frustrating. How could my forecasting improve so much and my
trading so little...what was I missing?
It eventually dawned on me that each step of the traditional
3-pronged process (Forecasting, Entering, Managing) was
plagued with problems.
- First, even if you are good at forecasting, you probably won't
be right more than about 50% of the time.
- Second, even if you are right about the direction of the market,
your entry price may be too high or too low, preventing the trade or
reducing future profit potential. Even if your entry was great, your
stop placement may be too close or your exit too early. If you give
each step of this process a 50% rate of success (probably too high),
by the time you reach the end you will achieve (at best) a 12.5%
success rate. Is there any wonder trading is so difficult for most?
From the first book I ever read on trading ("The Commodities Futures
Game") to every financial magazine since, along with every newscast I
have ever watched or commentator I have ever heard on TV, the foundation
of all those presentations stems from one belief - FORECASTING is the
key to successful trading.
Like virtually every one, for 20 years, I believed the myth.
Right after the 2000 stock market high, I knew (based on wave structure)
the S&P was entering a 15-20+ year consolidation.
Based on NEoWave concepts in Mastering Elliott Wave, I knew this meant
wave structure would become extremely complex and difficult to interpret
for possibly the next 20 years. Not a great environment for trading IF
your foundation is a forecasting paradigm.
With that knowledge in hand, in 2000 I began searching for a
non-forecasting approach to trading and investing based on the same
logical and objective approach that has made NEoWave famous.
After 7 years of research, training, trading and programming, a
highly evolved "trading science"
has emerged,
which I call NEELY RIVER THEORY.
In essence, Neely River theory compares the seemingly random action of
traders in a market to that of the behavior of fish in a river.
No mathematical formula can tell us exactly where a specific fish will
be in a river at any one time, BUT there are things you can predict
about the general behavior of all fish in the river.
1. Fish do not determine the flow of the river.
2. Independent of personal action, tracking the movement of all fish
will show the net result is they move down stream over time.
3. The majority of fish remain within the channel created by the north
and south banks of the river.
4. Fish will move the fastest when swimming downstream and in the middle
of the river.
5. Near the perimeter of the river, fish get caught in turbulence and
whirlpools that will effect their orientation and hinder their progress
to the ocean.
6. Fish do not need to make forecasts about the flow of the river or the
distance to the ocean to eventually reach that target.
In the same way, you can say the following about traders.
1. Traders do not determine the flow of a larger-degree trend.
2. Independent of personal action, tracking the movement of all traders
will show the net result (prices) move "down stream" (i.e., in sync with
the larger trend).
3. Trading activity is "confined" by north and south channels imposed by
a larger time frame.
4. Traders will make the most money the fastest in the middle of a
channel when in sync with the larger trend.
5. Near the perimeter of a market's channel, traders get caught in
turbulence that effects their orientation (i.e., it produces uncertainty
about future direction) and hinders their progress (i.e., their ability
to produce consistent profits).
6. Traders do not need to make forecasts about the trend of a market or
the distance to a future target to eventually achieve profits.
Using the river analogy as a guide, over the last 7 years I've developed
logical, objective trading strategies that allow traders to reach their
goal of profitable trading without attempting to forecast the direction
or extent of a market's move.
Though the above statements will no doubt be considered controversial
and debated by many, I expect the foundation and technology of Neely
River theory will create a revolution in the field of trading and
investing.
Sincerely,
Glenn Neely
NEoWave, Inc.
What Glenn Neely's Students Say About River Trading
Technology
You
are a genius. I closed out all
long option positions mid
morning Friday and went heavily
long with a panic entry early
Friday pm in Australia. Our
futures are pointing to a
massive decline Monday am.
Even though I am an experienced
trader, your course is worth
every cent."
Anon
Australia Aug 4 2007
"Mr. Neely,
I want to thank you again for teaching me so much.
Trading is getting stress-free as days go on.
Everything is just working on " Auto Pilot ".
Entries and exits are being taken across all my portfolios
without any emotions and prediction.
The NRT combined with NEoWave is a lethal combo,
the only caveat being not to jump ahead and trying to
forecast.
Thanks again."
M Bathi India Feb 25 2008 7.20am
"The
last 3 months have been my best months of trading. Not only have
I had the best run in the long time but the level of confidence
and comfort of trading has made this time enjoyable.
"
Lubomir London, UK Dec 28am 21:12
Announcing A
Whole New Development In Trading First Time EVER RELEASED Sydney
Australia September 28-29
2008
"GLENN NEELY'S RIVER TRADING THEORY"
Call 02 9527 4690 to find out more.
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