This post explains the importance of applying the Elliott Wave framework on minor waves so you can spot an error quickly.
A few days ago, one of my friends sent me the analysis of the EURUSD that appeared on WaveTimes on 13 Oct 2011 and suggested that perhaps the single currency was headed in the direction suggested there. But the ongoing uncertainties made me skeptical and I shared my slight bias for a dip to 1.3585 first. The latest rally has once again proved that (a) no wave count is a ‘given’ until the move is over (b) just because someone has more experience with Elliott Waves does not mean he is going to be correct and (c) it really does not matter what your wave count is so long as you can take corrective action as the market unfolds.
You need to have a framework to base your trading decisions. I had given you a framework on 13 Oct, but pointed out the risks of that going wrong with subsequent updates. One could have made money in the short term using all the charts presented, but what was important is the level you chose to enter. If you had jumped in the middle of the consolidation, your stop would have been far. The key to timing a trade is your ability to look at the smaller time frames and establish wave counts for the minor waves. The closer you get to the action, the sooner you will know when one of your ‘rules’ get violated, informing you that you are wrong. The framework that you need to have is explained in detail in my book “Five waves…”. Revisit that book often, so you can apply it to every trade that you put on. Good luck.