Low Risk, High Reward Trading Experiment

dear itme..
your report plz where end of falling euro/usd and cable? (influence) with NON farm payroll)
ok thanks alot itme..

if you want to make ur money back now is a very good entry to buy gbpusd

entered at 1.8700 stop 1.8600 until monday eod then will readjust stop. but now is very good reentry point

thanks fixme..
i don't know about eliot wave but your advice very usefull for me..
i entered 1.7005 SL 1.658
is it enough for my SL?
thanks again

sori
8705
SL 8658..is it enough?
thanks

Yes, I would agree with that, Itme. Joe is a great guy and I would hate to see him done in.

Thanks Itme. Did you manage to "see" the Short?

I will also let you know about significant "Confluences" on GBP/USD when I see one.

Best wishes.

Friday October 6 2006 at 11:00 ET

Apparently payroll figures revisions played havoc with the market this morning. The trend was going down, so the big money forces chose to do the safe thing and continue the trend down, but not until after a strong spike upwards (up 35 pips on EUR/USD to 1.2607, and up 55 pips on GBP/USD to 1.8875)..... Trading non-farm payrolls, according to Thomas Yeoman who studied such things in detail, is not reliable or predictable. I should have mentioned this additional risk when I posted the low confidence long trade signal on EUR/USD and GBP/USD earlier. Furthermore, the short term wave count was murky.

Our GBP/USD long trade survived the downwards movement so far, but our EUR/USD long trade was stopped out. EUR/USD came down about 130 pips from its spike high, and GBP/USD came down about about 200 pips from its spike high. The stop on our EUR/USD trade should really have been lower, at about 1.2568, which we would have just squeaked past. The movement actually came down to our high probability downwards target at 1.2580 and passed it by 9 pips. But if we had set the stop on EUR/USD properly, then the trade would have had a far worse reward : risk ratio than it already had.

The lesson here: be honest about where the stop has to be, and if the reward : risk ratio sucks, then reject the trade. Don't be skimpy with the stop or bend the rules to make up an artificially valid trade. Especially before a major announcement.

According to our targetting system, the conventional downside target for GBP/USD is 1.8645, 30 pips below the recent low, and the downside target for EUR/USD is 1.2580, 9 pips above the recent low. So uncertaintly reigns. More study is required. After more study, I found another good target for EUR/USD, a more ambitious and less likely target, but nevertheless a probable target, at about 1.2560, about 10 pips lower than its recent low.

USD/CHF is likely to rise more, to at least 1.2657. The interim high is 1.2633. Due to the high negative correlation between these two majors, this adds to the likelihood that EUR/USD will fall more.

EUR/CHF is not finished rising. This suggests that EUR/USD will not fall as much as USD/CHF rises. So EUR/USD may just return to its already set low, or a bit lower, while USD/CHF rises to a new high.

EUR/GBP has finished its upwards "ABC" correction at .6767, and fell strongly BEFORE the non-farm payrolls data release. More downwards action over the short and medium term is anticipated. This suggests that EUR/USD may continue to decline more than GBP/USD does, as a percentage. Or, the expected decline in EUR/GBP could be created by a stronger rise in GBP/USD than EUR/USD, after this downwards wave is over, which is also likely.

____________________________________________________

Previous trade signal:


Trade Signal #198 Buy EUR/USD at 1.2670
Stop is 1.2629
Target is 1.2760
Risk is 43 pips
Reward is 108 pips
Reward : Risk ratio is 2.5 to 1

For research purposes only.

Note: This is not a particularly high confidence trade, and neither is it a great ratio of reward to risk.<!-- / message --><!-- edit note -->

You are correct itme, I close out all my positions 1 hour before the news comes out on Nonfarm Payroll days, no matter what. I prefer losses or gains I have control over rather than this news report. I will reenter any position when the market settles down, usually by Monday morning.

Good Trading, and have a great weekend.

Monarch

Friday October 6 2006 at 12:3 ET

We think EUR/CAD may have completed the downwards "b" segment of an upwards "abc" corrective wave. The upwards "c" segment should now follow, targetting our earlier predicted high region of 1.4340 to 1.4370

Trade Signal #200 Buy EUR/CAD at 1.4170


Stop is 1.4134

Target is 1.4340

Risk is 46 pips

Reward is 160 pips

Reward : Risk ratio is 3.7 to 1

For research purposes only.

Friday October 6 2006 at 1:00 ET

Adjust target for AUD/USD short position to .7415

Anticipating a bounce, we advised temporarily exiting our short AUD/USD trade on October 4, 2 pips above its bounce point of .7416. We advised re-entering at .7445. It then bounced up to .7482, and then came down again to .7413.

We think it will go down a bit further, and probably hit our target, but .7415 is a conservative target for the completion of this large downwards "ABC" corrective wave on AUD/USD which started September 4, 2006 at .7721. This trade strategy was to trade the "C" wave down, which was a successful strategy. We predicted a target of .7400, which it may hit, but the way things look right now we may fall slightly short.
______________________________________________________

Previous trade signals:

Re-enter Trade Signal #168 Sell AUD/USD at .7445
Wednesday October 4 at 10:15 ET
As predicted, AUD/USD rallied to .7445 ( so far a little past that to .7447)

This is an opportune time to re-enter this trade with the same stop and target as indicated below. Stop is .7492 Target is .7400

__________________________________________________

Temporarily exit Trade Signal #168 Sell AUD/USD at .7543

Wednesday October 4 at 5:00 ET
Exit short trade on AUD/USD at .7418 (at bottom of Wave 3), taking about 120 pips profit, and re-enter short trade after bounce up to about .7445 , with target at about .7350
__________________________________________________ _____________
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
__________________________________________________ __________-
AUD/USD update - 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
<!-- / message -->
<!-- / message -->

I have a long position on this pair and that I was planning on exiting at 150.00. I see that you have a trade signal with a TP of 150.50. Do you still feel that this is a viable target?

Thank you for the help here. I do see some good resistance at 150.50 but the move has been so hesitant that I am unsure of its having the steam to get there.

EUR/JPY narrowly missed hitting our stop and climbed to 149.91. All is in order to meet our target at 150.50. With all due respect, the pattern of movement between the entry point and target is irrelevant. It is possible for many different patterns to form, but the endpoint is all that is relevant.

_______________________________________________________

Previous trade signals:

Thursday October 5 at 2:00 ET
TS# 197 Buy EUR/JPY at 149.27
Stop is 148.93
Target #1 is 150.50
Risk is 37 pips
Reward is 120 pips
Reward : Risk ratio is 3.2 to 1

For research purposes only.

__________________________________________________ _

EUR/JPY update for Wednesday October 4 at 3:00 ET

Wednesday October 4 at 3:00 ET
EUR/JPY, according to our system, can reverse its upwards trend at either 150.50, or, more likely, 151.00 to 151.10. The safest strategy is to set the limit to short EUR/JPY at 151.00 with a stop at 151.57.

The target is far off, below 148.00, so a 60 pip risk is not a problem. If the upwards trend reverses at 150.50 instead of 151.00, then we can still enter the trade during the first upwards corrective wave, at the top of the minor Wave 2.

Good call on this one itme I missed the boat on this one lol. eurjpy

"With all due respect, the pattern of movement between the entry point and target is irrelevant. It is possible for many different patterns to form, but the endpoint is all that is relevant." GOTTA LUV IT


I'm gonna watch this one close eurjpy and learn its behavior. Then trade this and gbpusd only while keeping track of my record. I think im pretty good on gbpusd because it almost always hit the extreme fib lines of elliot wave theory. Thats a good weapon to know and have in your arsenal. Once you know a pairs behavior you will make money. Today I think we hit the end of wave 2:3 when the pair hit the 1.8673 mark which was just pass the 78% fib line of wave 1:3 so i believe we are still in a large wave 3 upwards with major pips to come buying gbpusd let me show chart.
this chart is from 10-2-06

this is todays chart itme what do you think about thishttp://www.forexfactory.com/forexfor...ons/icon12.gif

Thank you for the answer. That is one pair I really do not mind holding long because the interest is in my direction.

I understand and agree with what you say, but in the past I have picked TP at very appropriate resistance levels only to see the pair run out of energy and turn around before getting there. I guess as was going to be over cautious due to those experiences. As a result I really appreciate the fact that your analysis endorses my initial decision rather than my 'nervous' almost change in TP.

I do not know EW but I recognize that it can be a very powerful tool. It is appreciated that we have a person who is a practitioner and is willing to take the time to use that expertise to help with EW analysis.

Dear Itme,

Now the penny dropped !! and I understand you were completley right

about AUD/USD and EUR/USD .

I was not wrong but my idea was Ok just for short term ,but yours was

very long term.

AUD/USD AND EUR/USD both ,after some rally started to decline as you

told .

I really did not understand your counting , and really eager to hear about it .

any way ,I would like to sincerely congratulate you on your recent

trades .


ramin

Disasterous trades onthe EUR and GBP today-but u can blame me ItMe, for I am the RISEN KISS OF DEATH

I am not a just an Elliot Wave trader per se, however, I do believe on the 8hr and the dailies, with reference to your chart, if the GBP/USD pair break 8600then we will be in a confirmed 3 wave down to the 8400ish,......There may be some correction from the past 3 days however I am bearish over the next week to ten days. Itme..give us your thoughts.

Northpro

Point well taken Northpro. I have been checking out your thread too. Have you seen checked out mine. Very impressed with your calls, now you have me re-evaluating my charts . LOL we shall see next week I was talking with itme and asking itme what does he or she think about the three of us conversing on waves just to make sure we are on the right count. What do you think?