Low Risk, High Reward Trading Experiment

Itme and fixme1too,

First off Itme, hope you don't mind us using your thread as a mode of conversing between each other . Secondly, although I use EW as a reference in my trading calls with Wavetrade, it is not my primary method, just one of the tools I use. Still I would love to join in and evaluate each others thoughts, maybe the possible combination could make some interesting evaluations.

Have a great weekend,
Northpro

Hi Newstrader...Yes, the nonfarm payrolls wreaked havoc with the market as usual, but my problem was only that I entered two trades with murky Elliott Wave counts - and in the middle rather than at the perimeter of a channel. I knew they were low confidence, poor trades, but the value of an experiment is that you can do dangerous things and check out the results without really getting hurt.

Disasterous? Yes, the low confidence EUR/USD trading experiment bit the dust - a "LOW RISK" proposition for the "low risk / high reward trader. But the GBP/USD long trade is still alive. And it ain't over till the fat lady sings, as they say! And the AUD/USD came home (or very nearly so) - delivering a "high reward" success. Also, EUR/JPY jumped out of the starting gate and shows good promise. Etc.

Money management basics:

The number of pips is not a meaningful measure of anything. The only things that are important are the relative size of the reward and risk ( based on realistic backtesting or forward testing), the win : loss ratio, distribution of losses, and the duration of the trade. One could have a trade with a stop of 150 pips, and a reward of 500 pips, which would make it a trade with a reward : risk ratio of 3.3 to 1. It matters not how much one might be down at any point. All that matters is whether you hit your stop or your target first.

Another factor is timing. It's better if the trades take the minimum amount of time to complete, whether they win or lose, and it's better if there is an abundance of trading opportunities, so you don't have to wait too long between trades. That way you can retire from trading sooner due to excess of money in your bank account and things to do. Sometimes certain currency pairs move over 500 pips in less than 24 hours. So a trade with a big stop and a big target can still be a short duration trade.

When entering a trade, know already the maximum loss and the probable or certain gain.

The ratio of the two is the reward : risk ratio (normally known as the risk : reward ratio, but I like to reverse the order)

Only trade if you have a TRADING SYSTEM. If you don't have one that you are competent at, then search one out or develop one, and then master it.

Know the win : loss ratio of your trading system.

Know the distribution of losses of your trading system (do they come in clumps or spaced out?)

Using:

1) the typical Reward : Risk Ratio,

2) Win : Loss Ratio, and

3) the normal distribution of losses,

calculate the appropriate Risk Factor (percentage of trading account that will be lost if the stop is triggered). If you can't figure this out, then get a mathematically inclined friend to help.

Always calculate the appropriate number of lots to trade based on the parameters ( account size, stop size and target size) of any given trade, to limit the risk to the designated Risk Factor, as well as maximising the leverage of the trade to maximize the gain when you win. That way you maintain the perfect balance of risk and leverage of your capital for the trade, which is in actuality a strategic investment.

The low risk : high reward trader, which is as rare as a unicorn, risks much less each trade than he or she stands to gain. Thus losses are not too much of a concern. The main task is trying to increase the reward : risk ratio, as well as the win : loss ratio, through practise, research, and refinement of one's consciousness.

EUR/USD.....yes it turned out the Wave 4 count I had questioned earlier in the week was indeed correct....NFP surely revealed the correct wave count. Look for a re-test of the 1.2830's level next week...my position= long on Eur/Usd.

Welcome all fellow low risk, high reward Wave Traders! I see a community or team developing here.

Perhaps we can educate, guide, assist and inspire each other to ever greater heights of trading acumen. I hope so. I suggest that we use the Elliott Wave thread to hash out all the different wave count theories, and use this thread to share potential strategic trade set-ups.

Just in the last few posts above we have a wide diversity of opinions with regard to the EW counts. Perhaps if we compare notes the TRUTH will emerge, if there is one. I am certainly convinced that there is one, at least at certain times. (My study of historic charts in the context of EW and other models indicates a high degree of consistency of certain patterns over all currency pairs, for all time and in all timeframes.) At other times, I believe that the future is indeterminate.

The strategic task of the EW trader is to identify points in the price movement where there is a high probability of a long move in one direction, with the validity of that prediction disproven by a comparatively small move in the opposite direction.

I will continue with my trade signals, but I invite others to propose their own ideas and comment on the ones I come up with.

I want this to continue to be my trade journal mostly, but for now I invite a collegiate approach to finding and assessing low risk, high reward EW trade set-ups, to see how it works out. Of course, we all probably ( but not necessarily) augment our Elliott Wave studies with other tools like fibonacci time and distance projections and fractal breakouts (I am prejudiced against technical indicators, not just because they are blunt instruments, but because they distract people from what I believe are truly useful tools like Elliott Wave analysis, fibonacci analysis, fractal analysis, candlestick analysis, other pattern recognition systems, and skilled fundamental analysis).

A person who can count Elliott Waves properly is "King" or "Queen" of Any Market, especially if they have a good grasp of the strategic side of trading, which includes not only money management, but strategising when to enter and exit the trades to minimize risk and maximise gain. It is not a simple task. It probably takes alot of good training and practise. But I believe that it's possible. Putting our heads together could prove helpful, so let's give it a try.

Thank you to the moderators for maintaining law and order, too!

Hey Itme,

nice post, i never knew u were a fan of fundamental analysis. basically i believe if a person could use the combination of wave trading, skilled fundamental analysis and money management then he/she can do wonders!
I believe i have pretty strong fundamental analysis plus by judging wave patterns through my mind by looking at charts in different time frames.i must admit that my money management skills are not as good, just too greedy

I have had alot of success using your alerts, employing my fundamental and wave + pattern analysis on charts. I have also noticed the reason why i have lost on trades was due to poor money management and margin calls occuring thereof. I would like to provide my fundamental analysis on some pairs that im comfortable trading with on your alerts. for example, this time round on NFP, i looked at your long g/u trade and according to my fundamental and pattern analysis on NFPs i short it at around 1.8820 when everyone on a chatroom was telling me it was a suicide but i stuck to my fundamentals and "things" or patterns that i have noticed and have been following for the past 3 months. i have been successful on all these 3 months employing the same strategy and reaping benefits. i would be sharing my analysis on this thread a week before the next NFP. Secondly one thing i want to tell your thread viewers, never underestimate the US economy, even if it slows, it is faster comparitively than the other big world economies, and always remember one rule, when US slows, so does the world, and as for the job numbers, these jobs number donot count the people employed on ebay and other internet sites, who we call self employed, theres another job survey that comes out in the US which doesnt make headlines but is called the "Household survey" and it showed more than 250K jobs created in Sep. so this NFP is crap and is obsolete in this technological era where most of the people are now self employed on the internet, no wonder we saw a drop in unemployment and wages increasing. so there are alot of things you have to keep in mind before making a trade.

Secondly also notice that on the NFP day you will see on 15M a huge trend on eur/cad cross, the brokers close their positions for arbiterage before the news and the trend follows after NFP too.i have employed this technique for the last 3 months and it has worked. even this NFP when G/u was climbing up and you also suggesting long g/u i wouldve been tempted to go long but when i checked out the eur/cad cross it was sliding down tellin me according to my analysis that g/u and e/u should plunge downwards so i took a short at 1.8820 and it again worked. anyways i would be happy to share my analysis in the future on the trades you suggest.

Nice work and keep it up, you have been of alot of help

Thanks
Ahmed

Hi ItMe-thanks for the response-I admit to knowing absolutely nothing about EW-but I do know about Fundamentals and market psychology. My question is this: obviously everyone knows that news releases can cause wild swings in the currency values. I not sure why as a EW trader, you would remain in a position while important news is being released. It seems to be much to risky and I'm sure that these movements would have some effect on wave analysis-since they are obviously cause plenty of ripples...

The pattern i've seen many times is a currency returning to "equalibrium" after all the wild movement when a report has come out basically on or near the consensus. I've also seen a pattern of traders buying into the "rumor" of the consensus prior to a report being released-especially ones that sophisticated traders can research themselves, such as ISM, PMI, Retail Sales and Mortgages. The NFP is one that is notoriously difficult to research and the "buying in" is not seen there.

There is the psychological factors as well. It is my opinion that currenct traders in general are people who not only are willing to take a risk, but actually enjoy the thrill and this is especially true for fundamental traders. They're aggressive thrill-seeker types looking for the big hits. The wild swings excite them and all these people taken together are likely to cause as many wild swings as possible, since they enjoy them. The guys tend to gamble in casinos, play poker, drink more, bet on sports and dress more outlandishly. When they're in the money-they're looking to blow it. Bonds bore them.

The real professional thinkers are in the Bond markets. Go to a place in NY were they're having lunch or dinner and you'll see conservative suits and hear quiet talk. They'll patiently sip a good wine. They make conservative investments themselves. The ups and downs of currencies are unsettling to them as is gambling-in general and they stay away from it.

Getting back to the present fundamentals-There is the tremendously important news that the BLS has been grossly underestimating the amount of jobs that the economy has been creating. Yes these numbers are subject to revision, but the amount this time has forced the BLS to look for the "lost keys" in their methods. Not only will the year up to March 2006 be revised up by over 800,000, it is very likely that the numbers going forward will have to be too. The household survey is going to be much more important. Most unsettling is all the ADP data-if they don't revise where does that leave them?

I see this week as a possibility where wild fluctuations are likely to be seen. I don't believe that all of this new employment data has been priced into the market yet-the reason being that the 100 pip drop in the EUR and GBP is due to the current number and revision and not the revisions to come. People are going to think that either the BLS doesn't know what it's doing-or that somehow, a purposeful conspiracy is working here with these numbers. Either way, a lot of uncertainty is going to be seen.

A herd mentality may start taking over because given the current levels, the dollar is still very undervalued relative to all these revisions, especially the future ones. While all this uncertainty is in the market-since you obviously know a great deal of EW theory-how do you see it working? Can it be as predictive with all the fundamental uncertainty at present? I've come to the conclusion that during peroids of relative equalibrium, EW and some of the tech indocators will work well and the greater the "equalibrium" i.e. lack of big fundamentals, the better they would tend to work. During times of fundamental uncertainty, such as I believe is going to be in the market over the next week or so, I don't believe that they can be as predictive. We saw that Friday in the EUR and GBP. True, you're still in the GBP-but isn't that down like 80 pips? How many traders can hold on with a loss like that?

Itme,

Thanks for taking the time to post all of your work on this thread. I find your EW analysis fascinating and would like to learn more about it. Could you make some recommendations for a newbie like me on the best way to start?

Dear Itme,

Sorry- I posted what I have as my trade setup in the Elliott Wave forum. But I will be closely following both forums, as I am determined to study EW and conquer it. And I have actually assigned my husband to help me, as he doesn't really have the patience to sit and trade (don't tell him I said that), but he has a great analytical and creative mind and he wants to be involved in the trading.

Thanks for sharing your journey. To the naysayers who don't think you can do it- they can get a life and start making more pips.

Debbie

Dear NewsTraderFX,

Thanks for a very thoughtful, interesting and informative post. It begs many comments and raises many questions. I could write a sizeable book concerning the issues it raises, and I might substantially alter the contents of that book on a regular basis, because there are many deep mysteries involved that have puzzled me for years. Not just me, but many others as well.

First of all, I will say that my observations of the market in the light of my research have lead me to reject many common and "common sense" perspectives in favor some quite unusual and difficult to accept perspectives. Some people will reject the evidence in order to defend their familiar and entrenched views. Others will be curious to get to the bottom of things by objectively evaluating various hypotheses and the logic and data that support them.

Your comment above elucidates the common view concerning the market, announcements, fundamentals, market psychology, etc. Though I sympathise with your statements, nevertheless a mountain of irrefutable evidence has forced me to seek alternative hypotheses to describe the actual behavior of the market that I have carefully observed over the past few years.

For instance, regarding the interaction of announcements and technical analysis employing Elliott Wave and my second analytic model (which I believe is of equal or greater depth and significance as Elliott Wave theory), my observations to date support the views which I expressed here:

http://www.forexfactory.com/forexfor...nts#post107651

These assertions seem hard to believe, I know. But evidence bears them out. I have yet to witness any counter-examples. My mentor has arrived at the same conclusions entirely independently, and employing these assumptions has traded extremely successfully for two years, with barely any losing trades.

Moving to another subject. The issues raised by your comments concerning the relation of technical factors and fundamental factors have been the subject of much contemplation and study on my part. I have a similar theory to yours. However, when you refer to times when the fundamentals are not clear, as compared to other times which you refer to as "periods of relative equilibrium", I don't understand. It seems to me that these are the same times.

This is how I see it: The fundamentalists and mixed traders are always looking for fundamental bias in the market. When they can't find any, when different factors or considerations cancel each other out, when matters are uncertain, or everyone is waiting for the outcome of some major impending data release, announcement, speech or election, then the result is the same - fundamentals are a non-existent or minimal influence over market behavior. But since the market must always move (it seems to always move - why, I do not know), then pure technical factors take over. My technical models work most consistently and precisely when there is no clear fundamental bias in the market, when economic trends (especially the prospect of future interest rate changes) are muddled and unclear, and during periods of "uncertainty". Fundamental forces are super-imposed over technical factors, sometimes working in harmony with them, and at other times contradicting them, stretching or distorting them. This accounts for the frequent inexplicable behaviors of the market - but only inexplicable to the pure fundamentalist or pure technicalist.

Like you, I have witnessed an increasing tendency, whether due to leaks or anticipatory trading, of the market moving fairly strongly immediately prior to key announcements. Have you noticed any consistent pattern correlating the direction and size of anticipatory moves and the movements following the data release? I haven't looked at this yet.

Regarding market psychology. I am inclined to be skeptical of excessive anthropomorphising of the market's behavior. What percentage of the capital flowing into and out of the market belongs to funds that exceed $100 million? Over 95% I believe. What governs the behavior of these market makers? Human psychology, or fixed algorithms? How many trades, involving what percentage of market volume, is executed automatically by computers? A high percentage I believe, especially at certain times. Don't you think banks and other large financial institutions have spent millions developing and maintaining software to analyse and automatically trade the forex market? Do you believe that banks, large corporations, and large pooled funds trust individuals to use personal discretion to move billions of dollars in capital? I strongly doubt it, especially after a few individuals almost bankrupted a bank or two in a short time when left to trade on their own.

Well, that touches upon a few issues, both practical and theoretical. Enough conjecturizing for now....

Enjoy your weekend! Itme

hi itme,

i just discovered this thread on this forum and i am very impressed by your performance.

do you have a report how many PIPs have you done these last 4 months.
thank you

Dear Nicolas,

The answer to your question appears interspersed throughout this thread. This is an experiment. It is where we try new things. The goal is to learn, not to provide successful signals or to prove anything. Our trading system, and our skill in implementing it, are works in progress. We are constantly learning, researching, inventing, changing and hopefully improving our trading system. Our skills are generally improving, though sometimes we fall back it seems, when we are too tired, too hurried, careless, sloppy, not conservative enough, forget certain factors, or get confused. Our average or recent "performance" is not all that important, especially if separated from its context.

If you think you can learn something from tabulating pips, then go ahead, but imo it is a false measure of progress. That is one of the main themes of this thread. The very nature of your question suggests that you haven't read much of this thread, or understood one of the main themes - that success should be measured in terms of the development of an effective trading system, and the skill and ability to implement it. A successful trading system should be assessed in terms of typical reward : risk ratio, win : loss ratio, distribution of losses, typical duration of trades, and frequency of trade opportunities.

Each trade in this thread is an experiment. What we learn from our experiments is what counts. If you don't find this thread educative, then there are over 100 other trading journals and hundreds of other threads on this and other forums to peruse and study. I assure you that notwithstanding the "performance" - whether or good or not, of these signals, there are important lessons to be gleaned from this process.

More pertinent comments concerning the "performance" of this experiment can be found here and elsewhere:

http://www.forexfactory.com/forexfor...ect#post107744

and,

http://www.forexfactory.com/forexfor...ing#post108076

and

http://www.forexfactory.com/forexfor...ead.php?t=5150

Dear ItME-I can't tell you how much I enjoy some of this back and forth dialouge-I'm truly facinated by all of this so please keep it coming-and BTW-I'm the type of person who loves an intellegent debate-because I respect other people's opinion, don't have a big ego about my own and understand the value of being able to change one's opinion based on new facts.

Quote- "Like you, I have witnessed an increasing tendency, whether due to leaks or anticipatory trading, of the market moving fairly strongly immediately prior to key announcements. Have you noticed any consistent pattern correlating the direction and size of anticipatory moves and the movements following the data release? I haven't looked at this yet."

I've just begun to look at this so let me give u 2 recent examples just off the top of my head: The Euro was bought into (70pips worth) just prior to the $- ISM report last Monday-and the GBP was bought into (75 pips worth) in the hour before the $- NFP on Friday. There's an old saying in the market-"Buy the rumor and sell the fact". There are certain reports that can be very well researched by big investors-like banks and hedge funds-such as ISM, PPI, Retail Sales, Mortgages etc. Some people think the reports are being leaked, but either way, the phenomenon seems to working the same.

This has to be coupled with a developed sense of what a currency pair is worth, relative to fundamentals that are factual. For example-what would the EUR/USD be worth right now if traders were certain that the FED was going to raise the rate next time. I think it closed around 2680 on Friday, so given the certainty of this knowledge, the EURO would go into the 2550-2580 range. It might not stay there-traders might take some profits or other factors might come into play-but likely the certainty of a rate increase would be worth an immediate 100-130 pips in the short term. So if enough of the "Big Boys" were convinced of this, it would happen. The question now is-how can we know when the big market movers are going to be convinced of something- well this goes back to what you said about institutional traders and computer programs etc.

I'm not sure which traders buy into the rumor-but it probably is more the of hedge fund types and not the bankers. Hedge fund guys are gamblers, banks are not. We've seen hedge funds make "bets" all the time. One just went broke last week, when it bet on energy futures based on hurricane weather reports which turned out to be totally wrong. So look at the evidence-these guys bet 100's of millions of dollars on a weather report!! So the phenomenon definately exists.

Quote- "However, when you refer to times when the fundamentals are not clear, as compared to other times which you refer to as "periods of relative equilibrium", I don't understand. It seems to me that these are the same times".

During times when the fundamentals are not "clear"-what I mean is that an equalibrium exists between those who think rates will go up and those who think it will go down, so essentially it's the "unclearness" of fundamentals that create the equalibrium. I would tend to think that when the fundamentals are not "clear" the movements are much more easily predicticed by EW and other studies. As the fundamentals become "clearer", i.e. a preponderance of opinion exists one way or the other, the currencies will make the big moves. When the news is released, that is the moment of near perfect clearness. Everyone is going to short the EUR/USD or GBP/USD when it becomes clear that the FED is going to raise the interest rate, but what is also being seen is that "clearness" is occurring prior to alot of these releases.

The GBP was bought into the rumor of a $- NFP report in the hour prior to the NFP release. The 50k number was released and there was a moment of perfect "clearness" as the EUR and GBP rockected up. Then the market was taken by surprise by the revission. That was another moment of perfect "clearness". Everyone saw that the revission meant many more jobs were being created and this meant $ strength.

Quote-"When they can't find any, when different factors or considerations cancel each other out, when matters are uncertain, or everyone is waiting for the outcome of some major impending data release, announcement, speech or election, then the result is the same - fundamentals are a non-existent or minimal influence over market behavior".

Fundamentals are always existent and are always controlling market behavior-it's just that at times there is an equal balanace of fundamental thinking-meaning that there is about the same amount of money that thinks rates will go up as there are who think rates will go down. What my thinking is, is that EW will work much better in this window-when the fundamentals in the market are "balanced out".

Sunday October 8 2006 at 3:00 ET

We slightly missed the entry on this USD/CAD long trade on September 28 because we weren't paying attention when it came to the bottom, and then due to carelessness in counting the 1 minute waves thought it would go down a third time to the bottom, so we missed the entry by 6 pips.

We then advised an interim exit at 1.1200 before what we believed would be a major bounce ("We can re-enter to capture the next phase of the trend after a bounce."), which happened 18 pips higher at 1.1218 and descended 74 pips to form an "abc" corrective wave.

On October 4 we revised the target from 1.1300 to 1.1315 . The same day it rose to 1.1305, missing our revised target by 10 pips. The revised target of 1.1315 was a high probability target, which may yet be met. But we should employ the conservative target in our trades if we are leaving them to exit automatically. In this case the conservative target is 1.1300, which we correctly specified during the original trade signal. A lapse of judgement caused us to revise this conservative target to our exact "high probability target", which has a lower probability of being met than our "conservative target" which is met almost 100% of the time.

There are several lessons to be learned here:

Pay attention all the time to catch the best entry price.

Be very careful and conservative when counting the smallest wavelets. This is very painstaking, time consuming, and requires tons of practise.

Target the conservative target, not the exact target when leaving the trade on "automatic".
____________________________________________________________

Previous trade signals:

USD/CAD analysis for Wednesday October 4 at 3:00 ET
Wednesday October 4 at 3:00 ETBecause, as we discussed earlier, we didn't pay close enough attention to the one minute chart in assessing the Elliott Wave pattern when setting the entry price on this trade, the price of USD/CAD didn't return to the bottom a third time as we had expected, so our entry price on our long USD/CAD was missed by 6 pips.
Then we decided to try something different and set an interim target and then advise re-entry after a sizeable correction.
As it turned out, our revised target of 1.1200 was met quickly and surpassed by 18 pips, followed by a 74 pip retracement to 1.1144. This would have been a good re-entry price, after the large "abc" correction. Our targetting system would have exited the sell trade if one had been entered, or to simply enter a new buy trade at 1.1154. The new target for the long USD/CAD trade is 113.15
_________________________________________________ _

Friday September 29 at 4:30 ET

Adjust target for Trade Signal #190A Buy USD/CAD at 1.1086 to 1.1200. This is an interim target. We can re-enter to capture the next phase of the trend after a bounce.
__________________________________________________ __________

Thursday September 28 at 18:30 ET

A very strong downwards move on USD/CAD on September 27 at 14:30 ET went 9 pips past the stop of 1.1097 in our Trade Signal #190 Buy USD/CAD at 1.1132. We believe that it will come down one more time at least to 1.1086 or further, where we can re-enter this trade. The price may descend further, however, to as low as 1.1045.

Trade Signal #190A Buy USD/CAD at 1.1086
Stop is 1.1039
Target is 1.1300
Risk is 50 pips
Reward is 210 pips

Reward : Risk Ratio is 4.2 to 1

Thanks, NewstraderFX, for sharing your insights. It is very interesting and usefull. Please feel free to share and thus inform us of your perspective as it pertains to our task of identifying strategic "low risk, high reward" trade setups.

It is due to the complex interplay of fundamental and technical factors simultaneously on multiple timeframes that the market traces out its precise patterns. By understanding the synergistic sum of these factors we can hopefully navigate the treacherous waters of this volatile market, chart out the safe passages, and avoid the rocks and shoals of error and uncertainty.

Sunday October 8 2006 at 3:30 ET

Successful trade signal experiment: Our Trade Signal #176B Sell EUR/USD at 1.2830 came to its target and surpassed it by 29 pips on October 6 at 10:40 ET. The target could have been adjusted slightly lower, but the conservative target of 1.2600 was about right. Note the very large reward : risk ratio of 9.9 to 1

This was a picture perfect model trade according to our ever evolving "Q-E" trading system.

________________________________________________

Previous trade signal and comment:

The supplementary trades are experiments to learn how to trade the minor waves, which is much trickier for a variety of reasons. Here is our basic system strategy trade, which was entered into on September 22, taken from the probable top of a large upwards corrective wave.

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.

Hai ITME!!!!

Is there any signal or advice on GBPUSD???

Thank You...

Hi itme,

Given that you have been experimenting with your Elliott Wave system for some two years now (this journal is 9 months old) , why don't you just ask your mentor HOW he is trading so successfully ??

I think you will find that there is substantially more to his trading than Elliott Wave.

I am not trying to be a wise-ass. I just dont understand why your "mentor" won't help you.

Jacko

If you think you can learn something from tabulating pips, then go ahead, but imo it is a false measure of progress. That is one of the main themes of this thread. The very nature of your question suggests that you haven't read much of this thread, or understood one of the main themes - that success should be measured in terms of the development of an effective trading system, and the skill and ability to implement it. A successful trading system should be assessed in terms of typical reward : risk ratio, win : loss ratio, distribution of losses, typical duration of trades, and frequency of trade opportunities.


Itme, i couldnt agree more with that statement. I am always evaluating my performance in terms of r multiples. i very rarely look at performance in terms of total pips. I've attached an article by Van Tharp in regards to this. Proper position sizing and knowing your trade expectancy is the key. Thanks for the good thread.

David

Jacko, you raise an important point, which I would like to reiterate and clarify. If you took the time to read this thread, which I admit would take alot of time, then you would discover that I have frequently explained that my trading system incorporates two analytical models - my personal version of Elliott Wave theory, and the secret "Q" targetting model, which I believe is superior and more general than EW Theory.

My mentor employs these two models, plus numerous other tools as supplementary tools to navigate the market with great precision, singling out strategic entry and exit opportunities to minimize risk and maximize gain, focussing on the EUR/USD. He has explained some of his methods to me, and I am in the process of developing proficiency in them. When I am ready, I will learn and master more skills, such as predicting the time when certain endpoints will be arrived at.

I personally developed and taught him one of the core aspects of his trading system, but he has developed an integrated scientific approach that surpasses anything I have ever seen. He is very busy, trading, managing his wealth, sharing time with his family, and mentoring his apprentices. My research into the Q Model has delayed my development as a practical trader, but I have interrupted that research lately to round out my skills as a trader, in order to fund my future research.

ps - by my count, this trading journal is about 5 months old. My experiment is nearing its end. I may soon start trading again employing all the lessons I have gleaned.

Hi itme,

First of all, I would like to thank you for the journal. I respect any trader who puts his reputation on the line and outlines his trades live on the internet.

Secondly, I believe that parts of your methodology has merit.

Thirdly, there have been some sage advice from some of the more "professional" traders here that, hopefully, you have considered in your future plans. (eg. The advice from Merlin? regarding the use of "trailing stops" would have made many of your trades much more profitable. In many cases, I felt that you gave very distant TPs to "sex up" your "reward to risk" ratios)

On that basis, I respectfully would like to answer some of the statements that you raised in your post.




!. I would like to assure you that I have respected your thread sufficiently to have taken the time to read the whole thread.
( I also read the full postings in your other thread From $7.00 to $770 Billion)

2. I am a VERY serious trader who is always prepared to look at a methodology that I think has merit.
As a result, I have also have done a comprehensive analysis of your trading results to date (thats how I was able to state in a previous post that your trading results were deteriorating and that you were no longer profitable and, in fact, your accumulated losses were starting to grow at an alarming rate).


1. I can't understand why, when you KNOW his trading model, you cannot replicate his trading results especially when you say that "My mentor ... has traded extremely successfully for two years, with barely any losing trades"

2. If you are uncertain as to his methodology, it would certainly be worthwhile to go to one of his seminars. As stated in another thread
http://www.forexfactory.com/forexfor...&page=11&pp=15



1. Again, if this trading system is so successful, why would you want to deviate from the trading instructions of this trading system ???

2. If it had "barely any losing trades", why delay trading the system??

3. Why is your mentor not prepared to share his knowledge with you??



1. can you shed some light on what you have learnt??

2. To date, you have only alluded to the fact that you are using Elliott Wave plus another "secret Q" formula.
(There used to be another guy called VectorTrader/7thSignalTrader/ plus a whole heap more nomenclatures, who used to hang around the Forums. He also had this "amazing secret formula" that couldn't be mentioned. Fortunately, he appears to have disappeared from most of the Forums lately.)
Are you prepared to outline your methodology so that others here may try to assist you in significantly improving the trading results.


As I said, at the start of this post, I respect what you have done and I believe that some parts of your methodology have merit (as gleaned from some, but certainly not all, the results of your methodology). Should you feel the need to improve your methodology by throwing additional resources at the problem, feel free to email me.

Jacko