Low Risk, High Reward Trading Experiment

Itme,

Just wondering what you are using in obtaining your price targets (fibos, tls, etc....?) Thanks in advance, i'm a fellow Ewaver myself.

Hi FXAsia,

We have two ways of setting our targets. One is my original invention, the product of over two years of full time research. The other is an original invention of one of our mentors. The first is still in the research and development phase. The other is patented and I am not at liberty to disclose it. We are interested not only in how each works, but in how they can be used together, which adds another level of complexity.

We are conducting exhaustive backtesting to refine and analyse the effectiveness of these two predictive models. It is extremely time consuming as alot of carefull reasoning, analysis, and recording keeping is required for each piece of data. So far a full day of backtesting has only yielded ten days of data. We hope our efficiency will improve with time.

Sorry I can't be more helpful. There are other methods published that I'm sure could be found. However, I can't give you any specific recommendations. Perhaps other participants in this forum could if you asked them.

Tuesday September 26 at 6:30 ET

Depending on the strength of the EUR/USD downtrend, and the results of the data releases at 10:00 ET this morning, EUR/USD could do a major bounce upwards starting at 1.2677, 1.2660, or 1.2630. We advise exiting at one of these places and waiting to enter another short trade after a sizeable "abc" corrective wave pattern is finished.

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Previous trade signal:

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.

Tuesday September 26 at 7:00 ET

Trade Signal #191B Re-entry opportunity to sell GBP/CHF at 2.3570

Stop is 2.3616

Target is 2.3265

Risk is 61 pips

Reward is 290 pips

Reward : Risk ratio is 4.7 to 1

For research purposes only.

Note: GBP/CHF rose to 1.3610, missing our stop, but not by much. I erred by mistaking a nearly complete single five wave upwards component wave for the entire upwards five wave set. This is a classic error in Elliott Wave counting.

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Previous trade signal:

Thursday September 21 at 11:45 ET
Trade Signal #191A Sell GBP/CHF at 2.3770
Stop is 2.3792
Target #1 is 2.3210
Risk is 37 pips
Reward is 545 pips
Reward : Risk Ratio is 14.7 to 1

For research purposes only.

Tuesday September 26 at 6:30 ET

I believe that USD/CAD began an "ABC" upwards corrective wave on September 1st. The "A" wave (1-2-3-4-5) climbed from 1.1032 to 1.1293 and then changed direction on September 20, starting an "abc" B wave down. This B wave was recently completed today at a price of 1.1130. We are now heading up for the C Wave (1-2-3-4-5), targetting about 1.1300 or higher.

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Previous trade signal (still live):

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.

We reached the last updated specified target for Trade Signal #179 Sell EUR/JPY of 148.06 at 6:00 ET September 26, completing a Successful Trade with a reward : risk ratio of 6.4 to 1. At the time of the completion of the trade, the updated target was actually 147.96. The lowest price reached so far is 147.70. This trend will probably continue down even further. The trend down of EUR/JPY was caused by EUR/USD falling quite strongly while USD/JPY stayed trading in a narrow range.
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Previous trade signals:

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.}
__________________________________________________ __________-

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.

Tuesday September 26 at 8:30 ET

Adjust target on Trade Signal #181A Sell EUR/CAD at 1.4342 to 141.20

Also adjust target on Trade Signal #181B Sell EUR/CAD at 1.4322 to the same value

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Previous trade signals:

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

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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

Tuesday September 26 at 10:30 ET

We did not get a chance to enter a short trade in GBP/JPY at 222.70 as hoped, so the downwards trend began without us. But we believe there is a good re-entry opportunity now at 221.65

Trade Signal #193 Sell GBP/JPY at 221.65

Stop is 222.11

Target is 217.65

Risk is 55 pips

Reward is 391 pips

Reward : Risk ratio is 7.1 to 1

For research purposes only.

Hi itme,

I have been thinking about your methodology, using among other things, Elliot wave. I was wondering how does various time frames for charting play into this approach? Or is your concept lesss interested in the set time frames and more interested in degrees of waves? If the later, aren't various time frames for looking at your wave formations going to influence how you perceive degrees of waves?

Thanks Scott

Thanks for the question, Scott. It cuts to the essence of the challenge posed by charting the Elliott Waves. (By the way, I believe that EUR/USD just hit the bottom of its current wave at 1.2661, and is due for a fairly large "abc" corrective wave. I studied the 30 year chart, the ten year chart, the 40 day chart, the 30 day chart, the five day chart, the one day chart, and the tick chart to arrive at that conclusion, which I believe is both precise and correct.)

To map the waves one must look at ALL time frames from 30 years to the tick chart. My focus is on mapping the various degrees, rather than the appearance on any particular chart. Of course, by choosing the correct resolution it is easier to distinguish the inside smaller "noise" from the relevant price fluctuation patterns. But it should be noted that this approach, if undertaken solely, is sometimes misleading. I always like to look at a more detailed perspective to confirm the inside wave structure. What might superficially appear to be a wave might actually be only part of a wave. Also, some waves are faster or slower than others, and thus require different charts to assess. One must know precisely where one is in all the various degrees or scales of the patterns.

To do this, first of all one must know what the correct theoretical design is of the market movements, how the sequence of the waves plays out, and how each wave in the sequence is structured internally. This can be done by studying books, and more importantly by careful observation, by looking on different timeframes as an aid (the one hour timeframe is very useful) and by evaluating the sizes and durations of various oscillations. It is essentially a mapping and taxonomy task, and must be done carefully and methodically. The standards or expectations must be adjusted to time of day, type (mood and structure) of market, and influence of impending or recent announcements or other external factors.

The rules and design patterns in books can be just as misleading as helpful.

Signal #184A Buy USD/CHF at 1.2351 was stopped out when the price fell to 1.2289, 8 pips below our stop at 1.2297.

GBP/USD, EUR/USD and USD/JPYhad all came to the endpoints of their trend, but USD/CHF kept on going another 50 pips while the others started in the new direction. We entered the buy USD/CHF at a reasonable point from the perspective of our targetting system and the overall movement of the market, but a careful wave count confirms that the trend was not yet complete. It needed to complete wave 4 and wave 5. So instead of reversing at the most likely reversal point, it traveled first to the next reversal line down, and then one more time down to the second line past the most probable reversal line, and reversed exactly there.

In terms of the target of the trade, the highest point reached today is 1.2466, which is 6 pips past our first target.

So this trade was a tricky one to get right on the entry, but we aced the target. A close miss.

<hr style="color: rgb(209, 209, 225);" size="1"> Previous trade signal:

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.

itme,
trade signal #193 Sell GBP/JPY at 221.65
The stop was reached and went to 222.21, that is as high as it has gone so far today, have you raised the stop on this signal? Also, is there still indications that this will go short to 217.65, or is there another target now? Thanks for the help.
Monarch

Wednesday September 27 at 12:45 ET

Two successful trades, one a re-entry of the other: The target for the two trades shorting EUR/CAD of 141.20 was met at 17:30 September 25 and surpassed by a mere 8 pips. It's a good thing we revised the target, as we would have fallen short of the original target of 141.00
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Previous trade signals:

Adjust target on Trade Signal #181A Sell EUR/CAD to 141.20 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Tuesday September 26 at 8:30 ET

Adjust target on Trade Signal #181A Sell EUR/CAD at 1.4342 to 141.20

Also adjust target on Trade Signal #181B Sell EUR/CAD at 1.4322 to the same value

__________________________________________________ ___________

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

__________________________________________________

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
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Trade Signal #193 Sell GBP/JPY at 221.65 as copied below is a perfect example why not to try to perform complex tasks after a night without sleep. This trade signal in no way complies to our trading system. It is purely delusional. There is no viable complete upwards "abc" corrective wave pattern in evidence, and the reversal point does not comply with our second model which is able to both predict and confirm probable reversal points. Our trading system clearly indicates 222.14 as the most likely reversal point, and there is also a complete "abc" upwards wave at that point, but not before. Therefore we should have, and could have predicted 222.14 as the likely reversal point for a downwards GBP/JPY trade. The correct stop should have been 222.52. Therefore, our system, if applied properly, would have generated the following corrected trading signal:

Tuesday September 26 at 10:30 ET

Trade Signal #193 (corrected) Sell GBP/JPY at 222.14
Stop is 222.52
Target is 217.90
Risk is 47 pips
Reward is 415 pips
Reward : Risk ratio is 8.8 to 1

For research purposes only.

Note that the price of GBP/JPY rose this morning to a high of 222.21, and then proceeded down to a recent interim low of 221.41. We expect the price to proceed somewhat further down to about 221.35, then an upwards second wave should carry the price back up to 222.00 to 222.10, which will provide a second entry opportunity for a short trade near to the recent high.

Chalk one up for our trading system as far as predicting the turnaround point, but we give no points to ourself for applying it correctly in this instance.

____________________________________________

Previous trade signal:

Tuesday September 26 at 10:30 ET

We did not get a chance to enter a short trade in GBP/JPY at 222.70 as hoped, so the downwards trend began without us. But we believe there is a good re-entry opportunity now at 221.65

Trade Signal #193 Sell GBP/JPY at 221.65
Stop is 222.11
Target is 217.65
Risk is 55 pips
Reward is 391 pips
Reward : Risk ratio is 7.1 to 1

For research purposes only.

EUR/USD prediction as of Wednesday September 27 at 3:00 ET

We stated at 11:00 ET yesterday morning something that turned out to be both "precise and correct":

"(By the way, I believe that EUR/USD just hit the bottom of its current wave at 1.2661, and is due for a fairly large "abc" corrective wave. I studied the 30 year chart, the ten year chart, the 40 day chart, the 30 day chart, the five day chart, the one day chart, and the tick chart to arrive at that conclusion, which I believe is both precise and correct.)"

We earlier predicted a reversal into an upwards "abc" bounce wave "at 1.2677, 1.2660, or 1.2630". The reversal point was, in fact, exactly 1.2661.

We believe that EUR/USD has now completed the "ab" part of the upwards corrective wave, and is due now to ascend to between 1.2700 and 1.2747, after which it will reverse direction and proceed down to about 1.2600 or lower.

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Previous trade signal:

Possible exit targets for short EUR/USD trade <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Tuesday September 26 at 6:30 ET

Depending on the strength of the EUR/USD downtrend, and the results of the data releases at 10:00 ET this morning, EUR/USD could do a major bounce upwards starting at 1.2677, 1.2660, or 1.2630. We advise exiting at one of these places and waiting to enter another short trade after a sizeable "abc" corrective wave pattern is finished.
_________________________________________________ _______

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.

Wednesday September 27 at 3:15 ET

So far GBP/USD has fallen 150 pips towards its target. However, based on the most recent information Target #1 needs to be revised upwards slightly to 1.8720 from 1.8700.

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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.

Analysis of failed Trade Signal #191 Sell GBP/CHF at 2.3728

This failed signal, which gave a much too low entry price for GBP/CHF ( which rose to a high of 2.3782), not only incorporated an incorrect Elliott Wave count as mentioned below, but the trend reversal calculation was clearly pointing to 2.3765 at the time the signal was generated, not 2.3728. The trade signal was not system compliant. The system worked, the problem was with its application.

A short time later, at 11:45 ET on September 21, we entered a correct trade signal shorting GBP/CHF at 2.3770, which was a successful entry:

http://www.forexfactory.com/forexfor...CHF#post103463
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Earlier failed trade signal:

Thursday September 21 at 10:15 ET

Trade Signal #191 Sell GBP/CHF at 2.3728
Stop is 2.3746
Target #1 is 2.3210
Risk is 33 pips
Reward is 503 pips
Reward : Risk Ratio is 15.2 to 1

For research purposes only.

Note: this trade signal got stopped out when GBP/CHF went up one more wave to 2.3782. Obviously I got mixed up in counting or miscounted this upwards wave. This highlights the necessity of labelling each and every wave when doing a wave count, and checking the count over and over.

Wednesday September 27 at 4:30 ET

Revise target Trade Signal #168 Sell AUD/USD at .7543 from 1.7400 to 1.7350
Current price is .7505
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Previous update and trade signal:

AUD/USD update - Wednesday September 20 at 16:30 ET <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Wednesday September 20 at 16:30 ET

Since the last update on AUD/USD where we advised exiting our buy position at about .7525 for a small profit, this pair has risen to form an "abc" corrective wave pattern, topping out at .7543. This would have been a good place to enter a short position targeting 1.7400
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Wednesday September 20 at 3:00 ET

Exit Trade Signal #168 Buy AUD/USD at market price (which is approx. .7525)

Further study and contemplation of AUD/USD has lead us to conclude that the most likely Elliott Wave interpretation is different than the one that underlay our Trade Signal #168 Buy AUD/USD at .7514.

We had thought at the time that we were entering a buy position at the start of Wave 3 of a 5 wave upwards wave pattern. However, we now believe we entered the buy trade at the bottom of "Wave 4" and the start of "Wave 5" of an "a" upwards corrective wave. What followed was a rise of 53 pips up to the top of the "a" at .7567, then a decline to the bottom of "b" at a price of .7503, then a rise to .7573 which was the top of "c" , slightly higher than wave "a", and then a decline back down to .7504.

The price is generally expected now to decline further, so we advise exit of this trade at the market price of approximately .7525.

Wednesday September 27 at 5:30 ET

Trade Signal #194 Sell EUR/JPY at 148.92

Stop is 149.32

Target #1 is 147.65

Risk is 43 pips

Reward is 125 pips

Reward : Risk Ratio is 2.9 to 1

For research purposes only.
__________________________________________________

Note: this trade signal is not system compliant. The wave count was viable, and we had come up against a strong resistance level, but the trend reversal system did not give us a green light.

For more details, see:
http://www.forexfactory.com/forexfor...JPY#post107135

Hi Itme
Waiting with baited breath for target and stop for this trade?

Best

Andy