Thanks for your kind words! Fate was indeed partially an influence when I created the Element Dice System.
Thanks also for your questions. Here are your answers:
- The idea of balancing elements is to remove both elements, so Yin earth and Yang earth would be removed from the roll. At this stage is no interaction between different elements, that is part of the elimination "pentagon"
- The idea of eliminating elements is that one element eliminates the other: the eliminated one is taken out, the one eliminating the other stays. First you would look at your Yang elements and see if they eliminate any Yin element and take them out. After that, you look at the remaining Yin elements and see what they would eliminate. In your example, Yang wood would eliminate Yin earth and the Yn earth is taken out. So Yin earth has no effect on Yang water.
- When it comes to the Qi dice, the idea is to have them influence the roll after balancing and eliminating, but if you feel your table would like to have that extra boost, you could have Qi interfere earlier. This would change the tone of the game a bit more towards a positive tone, which in my experience is not necessary. The game is already in favour of the players.
- Storing or banking elements happens after you go through the other steps. Again, you could houserule this or only use this in a special occasion if it fits in context of the story.
- The elements stored in the bank do not interfere with each other. You can bank any element for later, not just Yin elements, but most of the times it is the negative effects we would like to not occur in a situation.
- The elements stored away in the bank are meant for later effects on a situation. The idea behind this is, that if you had an action but not all effects took place immediately, these effects will come back at some point. I propose this for the following scene, but if you keep track about the stored elements and feel the action that led to stare an element has influence for a later action, you could get that element out of the bank. This way it would still tie in with the story and the idea of consequences of actions, positive or negative.
You can also read here a bit more on the interpretation of the dice.