A very important factor of Elliott wave analysis is that it usually provides
for an obvious “alternate count” if the market invalidates the “preferred
count” or the first assumption of the position of the market. If a market
does not unfold as anticipated because it violates one of the rules or guidelines
associated with its current position, the trader may then have a firm
conviction of what the new position of the market is which will allow him
or her to take an alternate trading or investing action.
Do not abuse alternate counts. When a market does not unfold as
anticipated by the Elliott wave analysis and there is no reliable alternate
count that fits within a reliable wave structure, the trader must then admit
that the position of the market is not clear and avoid forcing a count just
for the sake of having a count. There will be many times when a market
should be avoided because the pattern of the market does not fit within a
reliable structure.
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