Trend Reactionary Numbers Explained. Price advances and declines are normal occurrence in trading. Contra trend rallies and continuations of the trend (after a counter move)occur at all times. Predicting the extent and duration of these moves is a preoccupation of Elliott wave theorists. I was introduced to the Elliott wave concept by several of the "old-time" traders on my dealing desk. I was immediately enamored with the idea of being able to predict market turns with superior accuracy. As I endeavored to learn the theory I literally exhausted myself attempting to learn the facets of both wave identification and application. I could determine the pattern after the fact, but attempting to be forward-looking was for me, impossible.(I call it a brain freeze.)
There are no hard and defined rules to say when a wave started and finished! Some of the old-timers on the desk were able to make a correct call once in a while. When I pressed them for the how and why their answers lacked consistency and would be riddled with exceptions. The proverbial " Hey Jr., you also need some gut instinct." that flippant response was unacceptable answer for me. I know that waves in the marketplace exist I see them all the time, unfortunately after they have divulged themselves. How can I apply the theory prospectively was the main question?
Birth of an Idea Elements of the Fibonacci numbers series are interwoven throughout the Elliott wave theory. What if I were able to combine the Fibonacci numbers series and Fibonacci time series to a current marketplace. I would need to use monthly data, weekly data, daily data, and four hour data. The idea behind using all this data(after it is cleaned) was to find a critical juncture in price movement because if price is able to surpass that level, price could move to the next critical level. I have found that the market seems to gravitate to these levels and legitimizes the moves. Many traders have asked me how to teach them how predict these levels. At this point in time I am not willing to share this proprietary method, the reasoning is I subscribe to the theory that if too many traders know the method it will lose validity. I am happy to post the levels for all to use just not give up the technique. I also have the state the fact that one of my Treasurers key indicators is used in determining the Trend Reactionary Numbers.(These levels were taught to me and used in the banks Quant System for more info on what a Quant system in Forex Trading is please see http://www.tomstrignanoforexexclusive.com/realforextradingrobots ) We had worked on his technique before the Genesis of Trend Reactionary Numbers. The TRNs are from what I have seen an incredibly powerful indicator and all of my follower I am happy to report do agree.
