I have just finished reading "Adaptive Analysis For Australia Stocks" by Nick Radge and found it to be a great read, especially for a beginner.
In this book, Nick begins his discussion on Elliott waves by talking about Market Swings. He says there are two ways to view these swings:
1. View the price swings across multiple charts with each chart representing a different time frame e.g. daily, weekly, monthly etc.
2. Watch for price swings that travel certain distances in relation to others on the same chart and time frame.
He then talks about using his computer to only show price swings that are greater than 20%. Unless I have misunderstood, this appears to be a great way to take the guess work out of counting waves when applying Elliott Wave Theory.
Let me explain myself. When i first read through the chapters on Elliott Waves, and forgot about Nick's discussion on observing price swings based on the size, I thought it would be almost impossible to identify a wave. e.g. Say we are at the end of wave 2. How would we know that the next wave is wave 3 or the first (i) of five impulsive waves (i, ii, iii, iv, v), that make up wave 3? By observing larger swings, we can identify one set of Elliott Waves. We can then observe smaller swings to identify the micro waves that make up the larger Elliot Waves. I hope I am explaining myself ok.
In light of this, I would like to know if there is any software out there that allows you to show swings based on their size. Nick, if you're reading this, what software were/are you using to do this? Can this be done in AmiBroker?