Frequently Asked Questions – Elliottwaveindia.com
Q : How will this site help me ?
A : As a trader, you need to know which direction to place your trades. The underlying trend is important. This site provides analysis that guides you with the underlying trend to the Nifty, Sensex, sector indexes and individual stocks. We do not provide intra-day tips, but even short term traders can benefit by knowing which way the trend is, and which way the wind is blowing.
As an investor, when is the time to buy, and when to sell. Many investors time their buying not-so-well, often when the stock or the market is about to turn lower. This site provides tremendous help with clear analysis about where the stock or index is heading, often but not always with recommended entry and exit levels.
As a Fund : Most funds look at fundamentals – Price Earning ratios, Earnings per share, etc. But fundamentals often cannot explain swings in price because the most important aspect of the market is not considered – the psychology of its participants. The wave principle can and does. It also warns of corrections when 5 waves are nearing completion. It identifies ending diagonal patterns, and triangles which can, with reasonable accuracy, warn of change of trend in either index or stock or both, thereby resulting in higher alpha.
Q : Are you a signal providing service ?
A : No. We do not provide signals, but often we provide price levels at which we expect price to turn higher or lower.
Q : Do you provide intra-day tips ?
A : No. What we do provide is Context of larger price movements. We put price action into perspective (or context) with elliott wave counts, which puts the trader or investor into sync with the underlying trend. When you’re in line with the underlying trend, trading with the trend even for short term traders is where it is easier to make money.
Q : How often do you send out updates on stocks or indexes ?
Usually there would be at least 80 updates a month, a mix of Indexes and Stocks but we usually do more than 80. We cycle through the list of financial instruments by sector. Not strictly speaking, but you could expect us to complete a cycle of the all stocks within 45 – 60 days, so each stock would be updated roughly every 2 months (sometimes earlier, sometimes later). Some of these are posted in Trade Invest setups where we see an opportunity. We do not post Index opportunities in the Trade / Invest section for the simple reason that there are too many of them as regular traders go both long and short on indexes and on all time frames. Although we do not post indexes in trade invest, we do discuss direction or projected paths for indexes quite clearly.
Q :Do you look at the news ? Do you consider fundamental news in your analysis.
A : Not really. We look purely at price charts. We may glance at the headlines. Our analysis is purely technical, and price is the main factor in our consideration.
Q : Tell me more about Trade Invest Setups.
A : Trade Invest Setups is really our crown jewel. We post setups for traders and / or investors with clear labelled elliott wave charts, buy levels and targets. Some setups are to be entered immediately, some after a few days and some at a particular price. We only post setups that have at least a strong probability of success (70% probability or more). Most of these are suitable for investors and position traders. Usually we post about 5-7 high quality setups per week (sometimes more sometimes less. Once a trade or investment is entered, one may hold it for a couple of weeks up to 6-12 months. We try to enter at the right time so our trades take off soon. We try our best to avoid situations where an investment is held for many months before breaking even. We want the quickest and largest bang for our buck when we recommend setups. We don’t offer day trading opportunities, but even for short term traders, it helps to know the trend.
Q: How soon should one enter a trade from The Trade / Invest setups menu option ?
A : Firstly, Trade Invest setups are only for stocks as usually they are long only (buy) setups. Index setups are not posted in Trade Invest as traders go short an index as well as long. Now about Trade Invest setups, each setup is different. Viewers need to carefully read the post. Sometimes immediate entry is called for, sometimes a couple of days, sometimes a couple of weeks or maybe more. To predict time frame is not straightforward. Some people may wait for confirmation. Others may not. We try to provide setups that need to be entered soon, but sometimes price drifts aimlessly for a while or could bounce sharply before entering the buy zone.
Q : How reliable is the data provided on the charts ? What data service do you use ?
A : We use Thomson Reuters data, which we believe to be highly accurate and reliable.
Q : Since you are covering mostly Indian market and stocks, why deal with Hang Seng, Dow Jones, Global Dow etc ?
A : We have overseas as well as domestic subscribers. Also, local markets do not move in isolation, and India is no exception. Major Global stock markets usually trend in sync with each other,at least for most of the time. We cover the Hang Seng closely as Hong Kong and India have been the best performers in Asia for the last 30 years, and they often trend together. The MSCI Emerging Markets Index is a composite of Hong Kong, Chinese, and other top Asian companies. So both these indexes give us a regional Pan-Asian perspective, while the U.S Markets and Global Dow give us an International perspective. The Dollar Index is also hugely important as currency movements impact stock markets and have their own particular correlations.