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When the (iaily crude oil (Illustration 2-6) chart enters what Elliott practitioners consider either a major correction wave or a trend reversal, the Elliott Wave Theory is still lc king for the "c" wave to balance the "a" and "b" waves that have been circled. While the El liott Wave Theoiy is looking for the "c" wave, ttiere have been poteiHially seven "c" waves which are numbered for identification. The connplexity oif numbering and lettering is confusing, imprecise, and has nocleai ol)jective organl/.alion. Dors it really tell one what stage the rh.irket is \n>.

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Illustration 2-7 presents us with a daily Deutsche Mark chart. The wave that is labeled "b" in February is higher than wave 3. This way of counting waves is too contusing. At this point the Elliott Wave practitioner is vk.iiting for wave 4 to be completed and then for an up wave S. Wave 4 is greater in magnitude than wave "a" of December, yei wave 4 is supposed to be pari of wave "a." This is too confusing and requires hindsight.

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I he weekly Swiss Franc and weekly Dow Jones charts (Illustration 2-8Aand 2 ) illustrate how the tlliott Wave Iheorv, m order to lit a market to its theory, skips waves raiulomly. The waves that have been skipped are marked by X.

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In the daily T-Bonds chart (Illustration 2- ), wave 4, circled to highlight il, is brnng matcher l)y wave 2, also circled. When any wave can be matched by any other, there cannot he nn\ objcdiviiy foresight, It all becomes guesswork. Wave 4 is twice the si/e ol wave 2. !f then is no rational order, how will one know which waves to match up, or how will one know th* expected magnitude of a wave? Anotlicr example rjf this problem is demonstrated on the %&l SOO daily chart (Illustration 2-10). Wave 4, lined and marked, is twice the size of wave 2,

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I am grateful to Mr. Elliott for his theory. Perhaps without his observations, at the turn of the tentury, the Symmetry Wave Method may not have come inio being, and it would not lie possible to share this new nicihod. I feel it was important to share examples of the Etliotl Wave Theory so that It will be easier to understand the differences between the two dieorics. Another benefit you will gain from the comparison of the two theories is a conscious awareness of where the Elliott Wave has its weaknesses and how the Symmetry Wave Method will overcome these shortcomings. The comparison of the two methods may also bring greater awareness of the difficulties which markets present to a trader.

Distinction Between The Symmetry Wave Method and Elliott Wave Theory

Symmetry Wave Method

• Groups same magnitude waves together.

• Builds perspective.

• Symmetry provides for accurate anticipation of where a retracement will end.

• Does not rearrange wave count except after a trend reversal (explained in . Chapter Four),

• Usually has only one scenario for maritet development.

• Has simpler rules for counting waves.

Allows for objective trading. Rules are precise so all traders will count waves the same way.

Lets the market decide how many trend waves or retracement waves there will be.

For uptrend and downtrend, uses same method of counting waves.

Has specific rules for trend and trend reversal.

Elliott Wave Theory

• Groups different size waves together.

• Is an inadequate perspective builder,

• Does not provide foi anticipation of retracement.

• Rearranges wave count often.

Usually has several scenarios for market development.

Has complex and interchangeable mles for counting waves.

Is subjective, with variations in the wave count. Different traders interpret or label waves differently.

I rres to fit all waves into five trend waves and three retracement waves.

Uses complex numerical count for trend waves and complex alphabetical count for down-trend.

Has no specific rules for trend or trend reversal.

Symmetry Wave Method (contd.)

• Organizes the markets, and is a specific trading tool.

• Accounts ior all waves.

• Is simple and well defined, with less room for errors.

Elliott Wave Theory (contd.)

• Does not generate spnriiic trades.

• Skips waves.

• Is too complex, leading to errors in judgrTleni.