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Elliott Wave with the Higher Degree Trend and Multiple Timeframe Correlation with Trailing ATR Stop Loss

Good day,

This is in response to Michael's "sitting on gold" email. I have forward tested Elliott Wave with excellent results but have never had the time to trade it in the market. The trades always are in line with the higher degree trend (200 day SMA, 50 day SMA), and trade on any time frame of charts (5 minute and 15 minute work well). After a 5 wave move up (or down), you wait for an A-B-C correction, at the 63% (or 50%) mark, and then enter the trade at the high of the bar, with the stop loss set to the low of the bar as a trend reversal is indicated. The entry is based on 2% of your overall capital at risk. When you correlate all chart timeframes, you can see the exact candle to enter on a 5 minute chart.

Trailing stop loss Exit is based on an ATR stop that trails the trade. If momentum begins to run out, then the trade is exited at 30% above the previous swing high (or low if shorting). Otherwise the trade is on until the initial stop or trailing ATR stop is hit (if there is enough momentum). The Max DD is all based on your Risk Reward Ratio (2% for moderate gains). 

This is an excellent system with controlled risk. Controlled risk is the thing that I see lacking in most system. Entry gets you in, but it is managing the trade successfully that makes you profit. 

Let me know what you think.


- Ryan

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  • Oct 13 2019
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