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Published byOphelia Cunningham Modified over 6 years ago
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Advanced Gann Elliott Techniques ‘With an Optionetics View’
Denver Trading Group Ken Sheppard
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Optionetics Principles
Leverage and control Limited-risk protection Getting paid for that protection
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Agenda Review Elliott Wave Theory Examine AGET confirmation studies
Analyze hi-probability trading setups Research risk/reward ratios Search for possible trades Real-time analysis of your favorites Stocks Futures Indices
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What’s up with this?
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Elliot Wave Basics – Impulse Pattern
Wave 3 is never the shortest Missing out? Profit taking decline Traders now buying with a strong rally Wave 4 Will not overlap Wave 1 Stops taken out Stops Wave 1 Vicious sell off Wave 2 Wave 2 will not make new lows
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Elliot Wave Basics – Alteration Rule
1 2 4 5 3 1 2 4 5 3 Simple Complex Complex Simple
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Elliot Wave Basics – Corrective Pattern
Usually 50%-75% of Wave A 5 3 B A Simple correction: Zig-Zag 4 C 1 Wave C: Either 1 x Wave A or 1.62 x Wave A or 2.62 x Wave A 2
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Elliot Wave Basics – Corrective Pattern
5 3 B A Complex corrections: Flat Irregular Triangle 4 C 1 2
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Elliot Wave Basics – Fractal in Nature
5 3 v iii iv 4 i 1 ii 2
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Elliot Wave Basics – Works Both Ways
1 2 4 5 3 5 4 2 1 3
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Elliot Wave Basics – Works Both Ways
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Wave 3 Fibonacci Extensions
2.62 80% of w3’s end here 1.62 1 0.00 2
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Wave 4 Fibonacci Retracement
3 0.00 0.38 60% of w4’s end here 0.50 4 15% of w4’s end here 0.62 1 1.00 2
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Wave 5 Fibonacci Extensions
1.00 5 w5’s usually end here 3 0.62 0.00 4 1 2
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AdvancedGET Studies Momentum (Elliott) Oscillator
AdvancedGET generates the appropriate Elliot Wave counts for us and adds additional studies for statistical significance. Momentum (Elliott) Oscillator Profit Taking Index (PTI) Wave 4 Channels Ellipse MOB (Make or break) Triggers using regression channel or 6,4 DMA ROI using Fibonacci extensions
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Elliott Oscillator Wave 3 Wave 5 1 2 4 3 1 2
By comparing the oscillator peaks, we can distinguish between w3 and w5
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Elliott Oscillator
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Elliott Oscillator In all the data since 1960, the Elliott Oscillator in w4 has pulled back to zero 94% of the time!
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Profit Taking Index (PTI)
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Profit Taking Index (PTI)
3 4 1 2
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Profit Taking Index (PTI)
Calculated in the early stages of w4 Compares the current w4 against w3 to see if normal profit taking is taking place When PTI is > 35, expect new highs When PTI is < 35, there is a lot of selling coming in which reduces the odds for a w5 PTI only grows smaller as w4 completes
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Wave 4 Channels
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Wave 4 Channels If the w4 retracement holds below the first channel (blue), the odds are better than 80% for a strong w5 decline. If the w4 retracement holds below the second channel (green), the odds are only 60% for a strong w5 decline. The third channel (red) is a final stop. The few times a w5 is generated it will be long, slow and drawn out.
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Ellipse (a continuation tool)
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Make or Break (MOB) (a reversal tool)
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How Can We Trade This?
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How Can We Trade This? 5 3 + = Type 1 Buy 4 1 2 Waves 3 & 5 are
trending rallies easily identified 3 + = Waves 1-2 & 4 are corrective patterns which are hard to label Type 1 Buy 4 1 2
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Rules: Type 1 Trade (Buying at the end of a w4 retracement)
Oscillator pullback > 38% retracement PTI > 35 W4 channels holding Use trend channel or DMA for trigger Place stop Look for w5 target Calculate ROI 45 1 2 4 - 5 - 3 38% 50% 62% Reverse logic applies for a declining impulse wave
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How Can We Trade This?
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How Can We Trade This?
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How Can We Trade This? Type 2 Sell 5 5 3 3 B + = A 4 4 C 1 1 2 2
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Rules: Type 2 Trade (Selling at the end of a w5 rally)
Prices near w5 projection Oscillator divergence Use trend channel or DMA for trigger Place stop Expect w4 target Calculate ROI - 5 - 3 4 ? 1 2 Reverse logic applies for a declining impulse wave
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How Can We Trade This?
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Set-ups Trend channel DMA Alert when bar[1] closes outside set-up
Hi-Lo Flip regression with ± 2 standard deviation channels DMA 6 period MA with 4 period offset Alert when bar[1] closes outside set-up then trigger when bar[2] moves past extreme hi/lo of bar[1]
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Triggers Buy level First bar that closes above trend channel
Stop at low
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Triggers
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Triggers
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Risk vs. Reward - 5 - 3 Reward 45 Risk 4 1 2 38% 50% 62% 1.618 1.000
0.000
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AdvancedGET Studies Momentum (Elliott) Oscillator
AdvancedGET generates the appropriate Elliot Wave counts for us and adds additional studies for statistical significance. Momentum (Elliott) Oscillator Profit Taking Index (PTI) Wave 4 Channels Ellipse MOB (Make or break) Triggers using regression channel or 6,4 DMA ROI using Fibonacci extensions
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Examples Let’s look at some examples Hotline recommendations
AdvancedGET searches Your favorites…
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