Vegas Tunnel Method with its Elliott Wave Connection – Revealed by MotiveWave

Every Trader’s goal is to find new ways to identify market moves and trends to improve their trading success. The Vegas Tunnel Method, in conjunction with Elliott Waves, may be helpful in identifying the two most impulsive and most profitable Elliott Waves. You decide.

Testing Methods, Strategies against an Elliott Wave Framework

You may have read my post that discussed The-1-2-3-Pattern and its Elliott Wave Connection. The 1-2-3 Entry Signal, or pattern, can clearly be be explained in terms of Elliott’s Basic 8-Wave Sequence.

One of our goals, with this blog, is to evaluate various trading methods, set ups, patterns, etc. against the background of Elliott Waves. MotiveWave software was chosen to make this Daunting Task possible, by doing the Elliott Wave Counting/Labeling. I am fully persuaded that MotiveWave will help us make many more connections between Trading Strategies and Elliott Waves.

The Vegas Tunnel Method:

Several years ago “The Tunnel Method” was released by someone who goes by the name of Vegas. He, or she, did not want to take any credit for it and freely offered it to traders. Here is what they wrote in the Forward of their report:

“Please take the time to read and evaluate this information carefully. Turn the TV off, kick the kids out of the room, and give this the serious attention it deserves. Every word in this document is here for a reason.

I fully realize that most will take the information seriously, but that some will not. That is OK with me. I am not sharing this to gain a single thing from anyone. I do not want part of your profits, nor do I seek any monetary compensation from you. You can share this with anybody, or keep it to yourself. You can even tell all your friends you invented the model. I don’t care. You are completely free to incorporate as little or as much of this as you see fit into your trading style. I only want you to make money.

I believe that by showing you this method, you can give yourself a very profitable income. Although I can be the one who relays the method to you, make no mistake, you are the one who has to convince yourself to implement the method and finally push the button. It is not my intention to convince you that “Tunnel Trading” is the way to trade. That job belongs to you through research on your favorite currency pair or pairs. Historical data doesn’t lie. It is there for every single one of us to examine. Every penny you make, you richly deserve. Within a very short period of time [perhaps a month] you will come to think of tunnels as your own.”

Technical Indicators the Vegas Tunnel Method

Vegas used the following moving averages, as filters:

  • 5-period Simple Moving Average (SMA)
  • 12-period Exponential Moving Average (EMA)
  • 21-period Exponential Moving Average (EMA)

The  “Tunnel” comprises the following two moving averages:

  • 144-period EMA
  • 169 EMA

The Vegas Tunnel Method pdf can be downloaded. It goes into great detail.

I have added a Stochastic Oscillator to be used in conjunction with reversal candlestick patterns to help identify entries and exits. It has been found that when reversal candlestick signals appear at tops and bottoms of trends they are more predictive of a directional change when there is an “overbought” or “oversold” condition on the oscillator.

The Vegas Tunnel Method – Elliott Wave Connection

I summarized the Vegas Tunnel Method and illustrated how it superimposes an 8-wave Elliott Wave Sequence, below. Notice how  Wave 3 crosses the Tunnel.

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Here is the Tunnel Cross in a Downtrend:

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Here is an example of where the Vegas Tunnel was crossed by Elliott Wave 3 and the C-Wave. For more insight on Elliott Waves please refer to my previous post, “Elliott Waves- Patterns in Chaos.”

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Beyond the Vegas Tunnel

Trader and coach, Jody Samuels, took the Vegas Tunnel to a new level. She added indicators and developed a total of 5 different trade set-ups. She calls it the “Wavy Tunnel.” Her strategy employs multiple time-frame analysis and allows traders to trade throughout the entire Elliott Wave Sequence.


The Vegas Tunnel Method was described and illustrated. With the Wave-Labeling help of MotiveWave software we were able to see how the Vegas Tunnel relates to a basic Elliott Wave Sequence. We noted that, at the point the Price crossed the Tunnel was at Wave 3 in the Elliott Wave Sequence. Wave 3 is most often the longest, steepest and most profitable wave. R.N. Elliott called Wave 3 “A wonder to behold.” How would it influence your profit if you could use the Vegas Tunnel to identify Elliott’s Wave 3?

UPDATE: Just before publishing this blog post I discovered even more startling information. Although it seems like, more often than not, Wave 3 crosses the Vegas Tunnel I found an example  of where a corrective C-Wave crossed the Tunnel. It has been said that the C Wave, in the corrective Three-Wave sequence, is often the longest of the three.

It appears that the Vegas Tunnel can be helpful in identifying the two most profitable Elliott Waves: Wave 3 and the C-Wave. However, the Wave Counting MotiveWave software acted like a GPS unit by helping me to know where we are in the Elliott Wave Sequence.

It was also noted that Jody Samuels has refined the Vegas Tunnel and has taken it to a whole new level. She calls it the Wavy Tunnel Strategy. It is well worth looking it over.

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3 Responses to “Vegas Tunnel Method with its Elliott Wave Connection – Revealed by MotiveWave”

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  1. Twitter24 says:

    Hi, just wanted to say i liked this article. it was practical. keep on posting.

  2. Twitter28 says:

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