Analyst Spotlight: Senior Tutorial Instructor Wayne Gorman (Part 2 of 2)
The Elliott Wave Principle: When it becomes science, it becomes exciting
by Alexandra Lienhard
Updated: September 22, 2016
In part 2 of this in-depth interview with Wayne Gorman, he tells you why he approaches the Elliott Wave Principle as a science -- and why that makes analyzing and forecasting the markets more exciting.
Wayne Gorman is the head of our Educational Resources department. With more than 30 years of experience as a Wall Street risk manager and trader, he began his career at Citibank where he managed trading positions in money markets and derivatives. He traded full-time with his own capital for more than four years before joining Elliott Wave International.
If you missed part 1 of this interview, you can watch it here.
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[Editor's note: A text version of the interview is below.]
Wayne Gorman: One other very big problem is that there's a huge difference between the book, Elliott Wave Principle, the patterns which are described in that book, and then identifying them in real time as they unfold. It's like if I showed you a picture of a full grown tree, you could go match up and say yes, this type is a pine tree, maple, or whatever. If it's fully grown out on the street, you have a picture of that, that;s easy. But what if it's just starting to grow? That picture of the full-grown tree is not going to help you. So you need methods and tools to help you identify what tree, or what pattern, is this going to be before it becomes complete, as it's unfolding -- and that's one of the hardest things to do. Probably harder than implementing the trading strategy.
I call it my three levels of understanding. "Wayne's three levels of understanding."
Alexandra Lienhard: So, "Wayne's three levels of understanding" -- does that tie along with the goals of your service and the products you provide?
Wayne: Yes, and the three levels are: one, understanding the patterns, which is the Frost and Prechter book. The second level is being able to identify them in real time, and be able to count Elliott waves properly. The third is to create a trading strategy around that wave count.
Ultimately, it's been my goal since I've been here: I want EWI's customers to be able to do this themselves -- and then compare their analysis to our analysis. I want them to be able to critically evaluate our analysis. They should get to a point where they can do that. And then that's where they're really utilizing our service to its best potential.
If they don't know Elliott wave analysis well, then they're not going to get the most out of it. They're somewhat following blindly, without being able to do their own type of analysis.
Alexandra: And what's the biggest challenge when trying to teach customers to do this for themselves?
Wayne: I guess, getting back to making sure they learn. They must first know all of the characteristics of these price patterns inside and out. Getting them to study. Even I have to go back -- sometimes -- and re-read certain things. It's a science. There's so much to know. A lot of people say, "It's five waves this, three waves that." It really is a whole field, like physics or chemistry or biology. There's so much detail to know and remember that you have to just keep refreshing. Even I have to keep refreshing myself.
Alexandra: Well it's rare that someone with your background is both a teacher and analyst, so it's nice to get to pick your brain.
Wayne: Yeah, like I said, I've been on both sides -- trading and managing traders and institutions. I've run entire trading floors and trading desks in major institutions. Traded on my own and now I'm teaching how to forecast. It seemed like a natural progression to me -- to get to that forecasting level, because that's when it becomes a science.
When you're in banking, there's so many other things to do; you can't take time to make new discoveries. There's no time. You're doing budgets, you're evaluating your staff, you're attending meetings. I felt very frustrated in banking that I didn't have time to analyze my charts. And now I do. When it's science, it's very exciting.
I always think back in banking, what is it about what I do now that just seems so much better? And it's because of what I just said. When you're in those kinds of institutions, there is no time to get into the science of this, and get into the patterns, and try to discover new things about the patterns. There's no time. You just got to get the next budget done, or the next report done.
Alexandra: Well, we're lucky to have you, so thanks for joining us today.
Wayne: Thank you, thank you.
Editor's note: If you missed part one of this in-depth conversation with Wayne Gorman, you can watch it here.
Watch Introduction to the Wave Principle Applied
In this free 15-minute video, EWI Senior Analyst Jeffrey Kennedy explains how to take the Wave Principle and turn it into a trading methodology. You'll learn the best waves to trade, where to set your protective stop, how to determine target levels, and more.