Low Risk, High Reward Trading Experiment

I'm not deleting anyone's post. I can't. The moderators do that. Try to employ civil language, and maintain a constructive tone.

This is an experiment, not a test, and not a signal service. It is research - an experiment. I am hypothesising a procedure, a complex trading system, to find out how that procedure works in practise. I am employing Elliott Wave Theory, another theory even more complex and difficult than Elliott Wave Theory that complements it, Fibonacci projections, and fundamental analysis, plus timing techniques. My challenge is to identify the endpoints of trends as accurately as possible. For instance, I should be able to predict the likely top of GBP/CHF at 1.3771 BEFORE it gets there, and then confirm that it is ready to turn around when it reaches that point. My immediate goal is to develop a system and a facility to do this with at least a 30% success rate. If each trade is 5:1 reward / risk ratio or better, then we start to see the makings of a successful trading system.

I should have been aware of the major announcement , namely:
<table class="tborder" align="center" border="0" cellpadding="3" cellspacing="0" width="100%"> <thead><tr><td class="alt1">12:00 pm</td> <td class="alt1" align="center">USD</td> <td class="alt1">Philadelphia Fed Index</td> <td class="alt1" align="center">
</td> <td class="alt1" align="center">-0.4</td> <td class="alt1" align="center">14.5</td> <td class="alt1" align="center">18.5</td></tr></thead> </table> at 12:00 ET, and known how far the discrepancy in the numbers would have likely moved the EUR/USD, GBP/USD and USD/CHF, and adjusted the stops or exited the trades, or traded the announcements (which I have been studying with Thomas Yeoman for several months), BEFORE the time of the announcements.

I am following and making swing trades (or at least attempting to) on about 12 currency pairs here (GBP/USD, EUR/USD, EUR/GBP, AUD/USD, EUR/JPY, GBP/USD, USD/CHF, USD/JPY, USD/CAD, GBP/CHF, CAD/JPY, and EUR/CAD), so none of this is feasible real time.

I am simply modeling a trading program to evaluate the performance of a very sophisticated, ever evolving trading system. It is also a way of practising the procedures so I can do them more and more quickly and accurately. Last night I traded about 12 currency pairs simultaneously to test my speed and accuracy.

Try to get into a scientific mindset if you can. I know you don't know my model, but you can ask questions about it if you want. It generates stops, targets, times, all kinds of useful and quite accurate information.

And yes - the stops and targets do migrate over time, and are effected by impending major data releases.

This is a journal, not a signal service. This is strickly for traders to document their trading techniques, and in this case a trading EXPERIMENT. It has already been mentioned that traders should not trade based on this thread.

Thursday September 21 at 14:00 ET

According to our trading model, taking into account the strength of the announcement, the Elliott Wave count, and our precision targetting model, the entry point for a buy of USD/JPY following the Philadelphia Fed index data release would have been predicted to be 116.48. It went 4 pips past this point, and has now come back down to 116.50.

Trade Signal #192 Buy USD/JPY at 116.50
Stop is 116.19
Target is 118.62
Risk is 34 pips
Reward is 209 pips
Reward : Risk ratio is 6.1 to 1

For research purposes only. <!-- / message --><!-- controls -->

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Previous trade signals:

Thursday September 21 at 4:50 ET

Adjust stop Trade Signal #188 Buy USD/JPY to 116.66
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Thursday September 21 at 2:30 ET

USD/JPY just completed its downwards second wave of a larger upwards fifth wave pattern targetting approx. 118.62 or above.
Trade Signal #188 Buy USD/JPY at 117.05
Stop is 116.79
Target is 118.62
Risk is 29 pips
Reward is 154 pips
Reward : Risk ratio is 5.3 to 1

For research purposes only.
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Thursday September 21 at 14:30 ET

Adjust the target (limit) of Trade Signal #179 Sell EUR/JPY at 150.22 to 148.06

( Note: for the Wave Traders, 149.22, at the top of the "abc" wave 4 corrective wave would have been a good re-entry point.}
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Previous trade signals:

Adjust the target (limit) of Trade Signal #179 Sell EUR/JPY at 150.22 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Wednesday September 20 at 4:30 ET

To be ultra-safe, we recommend adjusting the target (limit) of Trade Signal #179 Sell EUR/JPY at 150.22 from 148.10 to 148.17. We should reach there tonight. The most recent low is 148.25
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Monday September 18 at 19:00 ET

Our system predicts a reversal of EUR/JPY at between 150.07 and 150.29 . As a conservative strategy, we will advise entry at 150.22, and place the stop at 150.52 and our first target is 148.10
Trade Signal #179 Sell EUR/JPY at 150.22
Stop is 150.52
Target is 148.10
Risk is 35 pips
Reward is 209 pips
Reward : Risk Ratio is 6.0 to 1

For research purposes only.

Thursday September 21 at 14:45 ET

Since exiting our short EUR/CAD trade the price did indeed follow a five wave pattern up to our precise target of 1.4342 at 13:00 ET on September 20, about ten hours after we exited the sell trade. According to our system, this would have been the time to sell as follows:

Trade Signal #181A Sell EUR/CAD at 1.4342
Stop is 1.4374
Target #1 is 1.4100
Risk is 42 pips
Reward is 232 pips
Reward : Risk Ratio is 5.5 to 1

Note that the current price of 1.4300 is probably the top of a corrective upwards wave, and thus a viable entry point. But the stop would still have to be 1.4374 as before.
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Previous trade signals:

Wednesday September 20 at 3:15 ET

Delayed signal:

Exit Trade Signal #181 Sell EUR/CAD at a market price of 1.4260

One hour ago we recognised that both USD/CAD and EUR/CAD would probably be going up one more time, and that it was therefore best to exit our short positions on both these currency pairs and to take small profits.

Because we were busy with other matters, we couldn't post the signal, yet our trading system clearly indicates that we should be exiting EUR/CAD at 1.4260 , the bottom of an "abc" corrective wave, and thus take a small profit of about 14 pips. We should be looking at shorting this pair at about 1.4350 or higher.

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Tuesday September 19 at 13:30 ET
Trade Signal #181 Sell EUR/CAD at 1.4284
Stop is 1.4315
Target #1 is 1.4100
Risk is 41 pips
Reward is 174 pips
Reward : Risk Ratio is 4.2 to 1

For research purposes only.

I have placed several replies to this thread - they are not questions, but remarks. It is true, I have not posted many replies, but this is the only Name I have ever used in this thread, or any thread anywhere, or at anytime. It was a simple comment in respect to the erasing of my previous replies. I am not here to ask questions, and I am not here asking for your advice. Thank you

Please do not exceed the image size of 600 X 600.

Also I deleted your post about how does one post their on thread, because it is off topic. I will PM you with instructions... thanks Scott

Thursday September 21 at 20:00 ET

The current price of EUR/CAD at 1.4322 is probably the top of an upwards complex "abc" corrective wave, and thus a viable entry point.

Re-Entry Opportunity Trade Signal #181B Sell EUR/CAD at 1.4322

Stop is 1.4362

Target #1 is 1.4100

Risk is 52 pips

Reward is 212 pips

Reward : Risk Ratio is 4.1 to 1

For research purposes only.

Note: we were a little early in this entry. A more complete "abc" pattern subsequently formed, with a high slightly higher at 1.4335

Thursday September 21 at 20:30 ET

Our analysis suggests that USD/JPY, trading at 116.20, is going to go in one direction only - up - for the next 24 hours, possibly eventually up to 118.40.

Our analysis suggests that USD/CHF, trading at 124.10, is going to go in one direction only - up - for the next 24 hours, possibly eventually up to 1.2640.

Let's watch and see if that is true.

itme, how does the EUR/USD look with the signal you gave at 11:55 ET? It seems to be bouncing around in the 1.2790 area. Do you still anticipate a short?

Friday September 22 at 4:30 ET

Trade Signal #176B Sell EUR/USD at 1.2830

Stop is 1.2851

Target #1 is 1.2600

Risk is 23 pips

Reward is 228 pips

Reward : Risk Ratio is 9.9 to 1

For research purposes only.

Friday September 22 at 4:30 ET

Trade Signal #184A Buy USD/CHF at 1.2351

Stop is 1.2297

Target #1 is 1.2460

Target #2 is 1.2550

Target #3 is 1.2660

Risk is 58 pips

Reward is 105 / 195 / 305 pips

Reward : Risk Ratio is 1.8 / 3.3 / 5.2 to 1

For research purposes only.

Friday September 22 at 4:45 ET

Trade Signal #183B Sell GBP/USD at 1.9056

Stop is 1.9087

Target #1 is 1.8700
Target #2 is 1.8580
Target #3 is 1.8500

Risk is 34 pips

Reward is 353 / 473 / 553 pips

Reward : Risk ratio is 10.4 / 13.9 / 16.3 to 1

For research purposes only.

Friday September 22 at 5:30 ET

Trade Signal #190A Buy USD/CAD at 1.1132

Stop is 1.1097

Target is 1.1300

Risk is 39 pips

Reward is 164 pips

Reward : Risk Ratio is 4.2 to 1

For research purposes only.

hi itime,

was up till 4am gmt last night analysing, and somehow encountered a moment of clarity, a brainwave, call it what you want...and then somewhere between last night and this morning, realised that the revelation pertained somewhat very similar to what you are trying to do...(i have seen your posts before but never really understand what you were on about:-))...but all of a sudden, last night, thought to myself 'OHHHHHH, so thats what you trying to do!!'

my revelation can be explained by an analogy...thats is to say that the market is like the water cycle...i.e. water is in oceans, sun evaporates water, water forms clouds above oceans, clouds move towards land, land causes precipitation and sometimes flash floods, water gets soaked up and used by humans and subsequently ends up back in the oceans or simply back in the clouds depending on how it is used after precipitation, sun evaporates water again....and cycle begins again...

finding the top/bottom of the market, which is what you trying to do is like finding the water just before it gets evaporated from the oceans and if you can do it then you could simply continue to re-cycle the water and in doing so gradually increasing your lots/leverage when it rained/flashfloods and then still have enough water left after the rain...subsequently with each cycle having more and more water to circulate i.e. more and more pips...and i was excited this morning simply because based on this water cycle theory during my moment of clarity last night, i eventually entered a sell position at 1.9060 GBP/USD and then saw your recent post this morning which was for 1.9056, and then i remembered your thread and then your whole post fell into place....and i thought 'Itime, you the man (or woman going by your avatar)!'

in anycase, the point of this long winded post is simply to say 'Well done' for attempting to use this methodolgy because personally i think its the only 'efficient' method to use because as they say in London, you gotta conserve the water...that and to wish you strategic luck in your endeavours...

tahnks,
tariq

Indeed "the market is like the water cycle". It is like all other phenomena in the universe - cyclic. It follows natural laws. It is so large that human free will has been superceded by natural laws. If you study any graph - movements of particles in physics, astronomy, electromagnetic waves, weather, biological systems, etc. the same kind of patterns are formed. If one believes in the order in the universe, then it is possible to discover and understand it, and then exploit it if one wills.

I hope and pray that everyone who makes discoveries or learns techniques and then employs them for gain will harmonize their personal free wills with the natural order in the moral universe, and act in accordance with the higher laws of love, forgiveness, and kindness.

Hi there Itme, my words are much simpler than yours, I just write to demonstrate my gratitude towards you. Thank you so much for your disinterested work and your valuable help. I have fund that 90% of my trading decisions are the same as your recommendations, although I use a complete different system. Your advices are very important for me and my trading, and usually work as a confirmation of my decisions.

Thank you again.

Keep up your great work!

Pablo

hey itme watch the usdcad pair the C wave isnt finshed yet it should bottom out at 1.1043 but I always take profit at about 5 to 20 pips higer than the endpoint. look back in your thread at trade #178 you said sell gbpusd at 1.8832 I was in for buy at 1.8683 with take profit at 1.9057 high today was 1.9063 6 pips higer than my take profit. This is the top of wave 4. Now we are in the down of wave 5 which is usally 162% of wave 4 but when 4 is strong like this one was sometimes 5 will not reach 162% we will see what will happen. Im in short on this one with tp at 1.8319 but i will be watching closely because wave 4 has gone higer that 50% of wave 3 this is a strong indication that 5 won't be completed but we shall see.
these are the rules for wave 4
PRICE
< 50% of W.3
W.4 38% W.3 common
W.4:W.3 < W.2:W1 on percentage basis
W.4 62% 100% 162% W.2
W.4 > 23.6% < 50% W.0 - W.3

TIME
W.4 most often related to W.3 or W.0 - W.3
Often longer in time than W.3 / W.0 - W.3
W.4 138% - 162% of Parallel Projection of ends of W.1 - W.3 measured from beginning of W.2

back to usdcad we are in c wave and c wave is usally 100% of wave A almost always. this is why like the fact that you and i can collaborate on the wave counts to be a little more certain of the count.
also im counting on the daily chart right now.

hope you have good weekend itme see ya monday by the way i really think we are at the top of the wave 4 atleast i hope because we did not reach 100% of wave 2 yet lol but came within 22 pips of ithttp://www.forexfactory.com/forexfor...ons/icon12.gif

Hi Itme

Are you still shorting the GBP/USD?, what is your current take?

Our short GBP/USD trade still stands. But the certainty is not high. The preferred ultimate target was not hit, but nevertheless the level reached is a probable reversal point. The Elliott Wave count is not certain either. It could go up one more time. So perhaps some traders might want to lower the stop loss to break even value or to a small loss.

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Previous trade signal:

Friday September 22 at 4:45 ET

Trade Signal #183B Sell GBP/USD at 1.9056

Stop is 1.9087

Target #1 is 1.8700
Target #2 is 1.8580
Target #3 is 1.8500

Risk is 34 pips

Reward is 353 / 473 / 553 pips

Reward : Risk ratio is 10.4 / 13.9 / 16.3 to 1

For research purposes only.