You've probably come to this website to learn how to use Elliott wave analysis to impove your investment or trading results.
Well, you're not alone. People have been using Elliott for decades, and today, we are speaking with one of them: Ms. Alayne Ginsberg, who discovered the Wave Principle back in the 1970s, and has been a fan ever since. Alayne talked to us on the phone from Colorado.
We hope this interview will help you get the most out of your Elliott wave application.
EWI: Alayne, thank you for agreeing to this interview. How long have you been an Elliott wave fan?
Alayne Ginsberg: I became a broker either in 1975 or 1976. When I started at the second brokerage firm I'd worked for, one of the guys there came up to me and said, "Are you interested in research"? I said, "Yes" -- and he handed me a copy of Prechter's Elliott Wave Theorist. The second I read it, I became enamored with the Elliott wave theory. For a number of years after, I shared a subscription to Prechter's newsletter, but at some point I subscribed for myself and added your Short Term Update and The Elliott Wave Financial Forecast.
EWI: After being a fan and a subscriber for so long, you probably know Elliott wave analysis as well as our analysts do. May I ask, then, why do you continue to subscribe?
Alayne Ginsberg: Because you people at Elliott Wave International look at markets all day long. I'm retired (from Charles Schwab), and while I try to keep up with the charts, I like to see "the universal view" of what you think markets are doing. Bottom line, I think you just know better than I do -- even though, like you said, I do know Elliott wave pretty well by now. But even when I was working as a broker, I was too busy helping customers. So I wanted to be tapped into people who were spending their days looking at the markets, like you are.
EWI: Do you use Elliott wave analysis exclusively, or do you supplement it with other tools?
Alayne Ginsberg: I only use Elliott wave. Occasionally, I also look at Peter Eliades' Stockmarket Cycles -- and I when I say "occasionally," I mean maybe once a month; more like once a quarter.
EWI: Do you see any weaknesses in the Elliott wave approach?
Alayne Ginsberg: Well, I'm sure there are people who do see weaknesses in it. But not me. I think Elliott waves are right about the markets more often than they are not. I had friends at work asking me all the time what Prechter was thinking, and even to this day friends call me to ask what Bob is saying, or what I'm thinking.
EWI: What would be one tip that you would give to other EWI subscribers?
Alayne Ginsberg: Well, I think that the Elliott Wave Principle can overwhelm some new subscribers. Markets move in a pattern: 5 waves in the direction of the larger trend, and 3 waves against it. But that's the "bird's eye view." Once you begin to "zoom in," you see that the patterns repeat themselves on shorter time frames, and it can quickly become overwhelming for the newbies.
But it's not the real problem. The real problem is that new wavers often don't take the time to read your training materials. As a new subscriber, you need to step back and realize that it's a new service, and until you know how it works, you don't immediately jump and say, "Oh, the market's going up, I better buy an ETF." Or, "Gold is supposed to go down, I better short gold." Or, "Treasuries are doing this, so I better play that, too."
I think that too many investors -- and this goes beyond Elliott waves, this is just me talking as a former broker -- jump in too fast, with both feet, and trade everything. They think: "I'm going to do this for a few weeks, or months, or years -- and then I'll retire as a multi-millionaire." That's not reality. I think that people need to slow down and take it one step at a time.
If you trade stocks, fine -- subscribe to an Elliott wave service you like and just focus on the stocks. Don't worry about the bonds; don't worry about gold. And when you get good at applying Elliott to the markets you know, like stocks, then branch out into something else. So, I think it's not an Elliott wave problem; it's the nature of the beast, investors' nature.
EWI: That's very good advice. Here at EWI, we spend a lot of effort on educational resources for subscribers, free and paid. From talking to subscribers, our analysts know that the most successful ones are those who take the time to understand the Elliott wave method. They use our forecasts to verify their own ideas. But like you said, getting to that point takes experience.
Alayne Ginsberg: Exactly. New investors need to do more research on the research they buy. They need to ask, What does my new market indicator mean? Does it work in all market conditions, or do I need to wait for the right volume, for example, for the best accuracy? Things like that. You guys provide a ton of educational resources, and it's a shame not to take advantage of them.
Something like Elliott wave is very, very accurate, but you cannot take it as gospel. "Accurate" doesn't mean the market will stop or reverse at the precise price point your analysis suggested it would. The market may undershoot that level by a few points -- or overshoot it by 30 or 50 points! That doesn't mean that the analysis is inaccurate; it simply means that it's not cast in stone.
Elliott wave gives you a map of where the market should go. Take it for what it is, don't expect perfection, adapt it to your own market, knowledge and experience, take your time testing this method -- and it'll serve you well, like it did me.
EWI: Thank you very much for taking the time to share your thoughts, Alayne.
Alayne Ginsberg: It was my pleasure.
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