No lah, where got deep. Just surface oni.
Refer to this EW discussion between theng, asiatrader98 and myself
http://www.bizfun.cc/forum/index.php/topic,433.msg3789.html#msg3789EW (Elliott Wave) was originally based on the Dow Theory.
It is used to measure the movements of the prices based on the psychology of the investors/traders.
The idea like this:
Say Master Trend is up after a major downtrend.
Wave 1: Hardcore Fundamentalist kickstarts the Wave 1 uptrend. They think stock too undervalued, too cheap ledi. So they buy and buy.
Wave 2: Those who were caught in the last major downtrend see an opportunity to sell sell sell. So Wave 2 is correction.
Wave 3: Techies (TA players) get into the picture and buy buy buy. SInce cheap cheap mah but start to move up back (Hardcore Fundamentalist still playing initially)
Wave 4: Fundamentalist and some TA players exit the market. Profit taking mah.
Wave 5: Poor retailers thought wah... this time veli good ledi. Forget about previous downtrend. Start to buy buy buy like there is no tomolo.
Wave A: BYE BYE retailers. Advanced players exit market.
Wave B: Some retailers thought minor pullback oni like Wave 2 and 4. So they buy again.
Wave C: Retailers all die
Of course this is basic idea oni ler.
So you see, for EW to work, it needs a lot of market participation. As we know in Msia, market volume is not liquid enuff. Easily manipulated by big boys. KLCI still can apply EW - tested before and yielded good results for myself. But when try to apply on stocks, horrible result - so dont bother yet until your EW concept very keng, then can test power and see if you can apply. But test paper trading first, cos as you can see, csong and I oso hafta pay tuition fees.
