I've read your conversation with modi on FXS thread the other day and I won't say if he is right or wrong, or how good is his approach, but instead, with the things he says, question arises if he speaks about EWT or rather to some new approach?! That is simply because from that little I've read and from seeing his counts, it seems that he (they) changed some of the fundamental principles of EWT and developed new breed. :) This is of course just an impression and not an argumented statement though, so I could very easily be wrong. I'm open minded to other approaches and uses of EW and I've said many times it is not the tool but the hand that uses the tool that will produce the results. So the comment is just of a theoretical and not of practical nature.
You also know that I agree with the idea that Forex pairs long terms cycles "could be seen" as representing continuous sideways movements. Unfortunately there isn't sufficient record backward (wave II can take up to 9 times the time needed to complete wave one), neither we will live so long to scientifically argument this :)
Although I grow the same impression that it is less likely to see some single currency hitting 0 (zero), no matter how improbable it is not impossible.
Anyway, Your conversation at FXS thread got me into rethinking the whole idea more deeply.
I have thoughts about that but never got to the point really contemplating them into an argument :)
Considering your question posted at fxs place about EWT and Forex sessions (US, EU and Asian)
Think of it this way.
As you know EWaves have fractal nature. Should I continue? :)
Of course not, but since I decided making it public post I will. So this part of the message is for those not that familiar...
Let's see then. Even on the same floor, every single trader's "mood" produces behavior which is reflected on the small time frames. Then you can see the cumulative behavioral results on daily and weekly charts.
I believe everyone get it even by now so no need to elaborate but OK, just in case something interesting comes out of this ramblings.
The only difference is in the accumulation time of single nano-fractals. While other markets have working hours, FOREX is 24 hours. It is not a question of place (and with electronic trading this is insignificant in other markets too) but of time (frames).
Time (frames) represents the accumulated behavior seen in patterns. That's why I said few times at fxs place (and you and I agree on this) that EWs are more accurate on larger time frames.
Now more significant difference in Forex is the fact that you trade pairs.
When a pair moves up or down, that could be because of few reasons:
If EURUSD is falling, that could be because:
1.USD is rising; EUR is falling.
2.USD is rising, EUR is holding steady
3.USD is rising, EUR is rising but slower than USD
4.USD is holding steady, EUR is falling
5.USD is falling, EUR is falling but faster than USD
So, there could be two different ways of how "behavior" in Forex can be seen.
1. People in general are bullish/bearish to a single currency (the above example)
or (nowadays)
2. People are bullish/bearish to a FX pair
Now the first way is the way one should observe FOREX. The pairs (one pair) them selfs are instruments or products which banks are selling to make money, and are not a true reflection of a real "mood" toward some single currency, instead they are a representation (summation) of the moods toward two currencies relative to each other. That is why we can't see the "true behavior" for the single currencies just from the pattern of one FX pair. But then, it doesn't necessarily matters (to many) since we are interested and we trade pairs. One could analyze FX from a single currency strength perspective (USDX, by assembling own indexes or like me building a RSI basket indicator :)...) but not necessarily. :)
Nowadays however, there are probably more and more participants which are seeing FOREX pairs in a more simple way (like stocks or commodities i.e.) and don't bother or even comprehend beyond that.
To make it really a ramble I'll just finish with this conclusion:
At the end, nothing of this really matters.
The only really important thing in any venture is neither your abilities neither the tools you have. But the level of confidence you have in both your skills and your tools. First two are prerequisites, but without the confidence you are not getting anywhere. You will either not do anything or produce poor results because of the lack or low confidence...
Build your confidence. Throw in some Money Management, it will help you. :)
Bear, tnx for your mail, hope everything's fine home, and a warm hi to bear family.
Dejan
PS. Bear, too bad fxs thread is not quite an appropriate place for this kind of ramblings, so too bad all those visiting there won't see it (or perhaps not :), they are saved from bore theoretical punishment :D )
Any way I'm making it public in the Blog.
