NEoWave Blog
11/18/2019 - NEoWave Staff

Article #1 of 7: Glenn Neely's perspective on Elliott Wave principle -- and advice for profitable trading

Introductory note: This is Part 1 of a 7-part series. In these articles, Glenn Neely, NEoWave founder and author of Mastering Elliott Wave, discusses Elliott Wave concepts from his unique point of view as a world-renowned Elliott Wave expert. In this frank, open, and insightful interview, Mr. Neely reveals his advanced forecasting and trading concepts – based on his decades of experience as the creator of NEoWave forecasting and his exciting Neely River Trading Technology, which fuels profitable trading results.

When talking about my personal introduction to Elliott Wave principle, forecasting, and trading, I think the most important thing to convey is that my understanding of markets is constantly improving and evolving. As I’ve moved more and more into the trading world with my NEoWave Equity Fund and my real customer account (that I manage for my NEoWave Trading/Neely River Trading customers), I’ve learned a lot from that process over several decades. In particular, I’ve learned a lot about Options and Options writing in the past few years – strategies that have significantly improved my trading results.

I’d like to start this article series with an introduction to my philosophy that there are 3 critical phases for successful, profitable trading.

The first phase – which reflects my original foundation, thought process, and focus – was based on forecasting, trend analysis and the market-selection process. In other words, decide which markets you’re going to trade, then forecast what they’re going to do. So forecasting, trend analysis, and market (or stock) selection, that’s where I was for 20 to 25 years.

Eventually, I realized that trading was separate from forecasting, so I moved into the second phase by adding this component: Timing. You may think a market is going up or down, but when do you actually get in? You don’t get in just because you think it’s going up. You have to wait for the best time to get in, so the risk is less and your potential is more. About 10 to 15 years ago, I added this extra thing – timing – into my process.

In the next phase (the last 3 or 4 years), I realized there’s another critical component: sophisticated position management, which includes money management and risk management. In other words, all the management and risk aspects of trading, cutting your losses short, and doing things to make sure you don’t suffer in a downturn or severe market crash. You can get out way before things get really bad. Most people get in, and they just hope and pray, but there are things you can do to avoid those kinds of problems.

In recent years, I have realized that professional trading and money management – being a success at the whole process – is really a 3-phase process. Many people begin with forecasting, which is where I started. For about 20 years, I focused solely on prediction. I believed that as long as I can predict what’s going to happen, I’ll make money trading.

I finally realized that’s not true.

Studying Elliott Wave principle and NEoWave forecasting offers a very good foundational understanding for people as they move through the forecasting and trading progression.

I want to make this one point crystal-clear: There are three phases to successful, profitable trading. It’s not just forecasting, which is what Wave theory is all about. Learning about Elliott Wave principle is Phase 1 in the progression to successful trading.

3 critical phases to successful, professional trading:

  • Phase 1: Forecasting, trend analysis, and market (or stock) selection
  • Phase 2: Timing to decrease risk and increase potential
  • Phase 3: Sophisticated position management (includes money management and risk management

Read the articles in this 7-part series:
Article #1, Article #2, Article #3, Article #4, Article #5, Article #6, Article #7

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