Why The Technical’s Are Only There To Support And Confirm What You Are Seeing Regarding The Price Pattern.
I shall always remember the first time I met David Elliot. I had recently purchased his AET home study program. I had a question to ask him as I was confused by all that he taught. We met at the hotel he was staying at with his lovely wife Allison in London. We left the hotel and sat in an Italian restaurant eating some great food.
Here is how some of the conversation went.
Patrick: Ok, you teach a lot of stuff ….. but how does all this fit together?
FW: What do you mean?
Patrick: Well …. you have MAP, MOBO, Soap, Hockey Sticks, Zoom, STAMPs, 3 waves and that’s just a few….. how does someone use all this?
FW: Simple. You don’t use all of it.
FW: I teach it all to show the various technical’s you could use. You use the one(s) you like to support the MAP patterns you are seeing on several time frames.
Patrick: Are you saying I could just use MOBO or Snap Back if I wanted to, and ignore everything else? Are you saying I just look at the MAP pattern and get confirmation off the few technical’s I like …… and that’s it?
FW: YES! lol…..
Patrick: Rigghhhttttttttttttttttttttttttttt!!!!!!!!! Why didn’t you say that before?
FW: I did. It’s the first thing I teach. I think most people misunderstood this point and got hypnotised by all the possible indicators they could use. The technical’s I invented are there to support the principals and are not the main principal. The main principal is the various MAP patterns around the SMA’s and the 3 waves. Wave 1,2 and 3. Its just the price moving in 3 waves towards and away from the major moving averages. That is all there is to it. lol
Patrick: This dish is lovely but yours looks better. hhmmmmmmmm. Why is it every time I order a meal I wish I had what someone else is eating?
Yesterday one of my 1-2-1 clients was short the indexes and wasn’t sure were to get out. We looked at one of my favourite intraday time frames, the 4hr chart and saw the price approaching the 500 sma. We got out a few tick in front of it.
What did the price do?
Exactly what FW would teach. The price is most likely to bounce off the 1st test of a major SMA if it has not seen it for a while. “It needs to go and get some roses and chocolates and come back before asking for a date” as FW the genius used to say.
The purple line on each chart is the 500 sma. What do you see?
Remember, the technical’s are not it. It’s the price patterns FIRST. The technical’s are only there to support and confirm what you are seeing regarding the price pattern.