Low Risk, High Reward Trading Experiment

Sori itme..
not eurojpy but eur/chf?

waskito

EUR/CHF rose to 1.5961 on October 13, coming within 9 pips of our predicted turnaround point. That would have been a good short opportunity. The EW pattern is somewhat strange right now, but our prediction for EUR/CHF of September 29 is seemingly still valid:

EUR/CHF prediction - finishing fifth wave <hr style="color: rgb(209, 209, 225);" size="1"> Friday September 29 at 4:30 ET

EUR/CHF is headed for 1.5970, 100 pips higher than its current price, which will complete a long uptrend that began on May 17. This would be an opportunity to short it and to hold a position trade from the very endpoint of a weekly trend.

Hi Itme, would you still consider this current price level as a good shorting entry?

Yes, balat, I would recommend shorting GBP/USD at or about the price of 1.8620 with a stop at 1.8655 .

The immediate target is 1.8450, about 170 pips lower.

p.s. - The US economy got some good news this morning, but this did not stop the GBP/USD from rallying quite strongly to a high of 1.8645, up 120 pips today. We believe this upwards correction is finished, but there is still a chance it will rise one more time to 1.8685 or so, a high probability reversal point.

<table class="tborder" align="center" border="0" cellpadding="3" cellspacing="0" width="100%"> <thead><tr><td class="alt1"> 8:30am </td> <td class="alt1" align="center">USD</td> <td class="alt1">Empire Manufacturing Index</td> <td class="alt1" align="center">
</td> <td class="alt1" align="center">22.9</td> <td class="alt1" align="center">11.0</td> <td class="alt1" align="center">13.8</td></tr></thead> </table>
The cause of the strong GBP/USD rally may be here:

Economic news out of the UK was encouraging, as Rightmove house prices jumped 2.0% in the month of October, bringing the annual rate to a 22-month high of 11.5%. Rightmove reported that the increase was driven by a lack in supply but noted that first time buyers are being priced out of the market to a larger extent. The release highlights that the outlook for higher interest rates has not yet curbed demand, but that increasing prices could cap demand.

Thanks for you prompt reply.

Itme, do you use Murrey Math lines at all?

The reason I ask this is because currently the GBP/USD is currently bouncing off of the 0/8 line(which is considered to be good support at 1.8494). The 1/8 line is at 1.8616 and the extreme south of MM is -2/8 line which is at 1,8433 which would tally with your projected target.

Monday October 16 at 5:00 ET

Trading Wave 5 up:

Trade Signal #210 Buy CAD/JPY at 104.15

Stop is 103.78

Target is 106.40

Risk is 47 pips

Reward is 215 pips

Reward : Risk ratio is 4.6 to 1

For research purposes only.

Hi Balat. You are welcome. Regarding the Murrey Math lines, I have never heard of them. Are they reliable and accurate? Let me know if they coincide with the endpoints of trends, or the predictions of reversal points that my system generates please, if you notice any correspondences again. Maybe they are related to our system, even though we don't know it!

Monday October 16 at 7:00 ET

Since Re-entering Trade Signal #208A Sell AUD/USD at .7506 the price fell to .7488 and then rose this morning to .7530, the current price. This would be a low risk / high reward opportunity to short AUD/USD, if the original trade signal was not acted upon. The stop should be at .7546
_____________________________________________________

Previous trade signal and comments:

Re-enter Trade Signal #208A Sell AUD/USD at .7506 <hr style="color: rgb(209, 209, 225);" size="1"> Thursday October 12 at 10:30 ET

The small upwards Wave c of the corrective Wave 4 trend in AUD/USD (which according to EW Theory was inevitable) received a medium sized boost from the favorable employment data yesterday, exacerbating the upwards wave, causing our stop to be hit. It carried AUD/USD higher than the first likely reversal value, and then past two more values to the fourth which is a very high probability reversal value of .7509. As Newstrader says below, the dollar currencies move in their own sphere independent for the most part from the European and Asian currencies. It is common for one of the dollar currencies to rise while GBP and EUR are falling relative to the USD. This accounts for the large swings in EUR/CAD, EUR/AUD, AUD/JPY, etc.

As reason and previous experience indicates, the likelihood of success of this re-entry trade is higher than the previous, initial trade, and it is a better trade in terms of reward: risk ratio also. The entry price is higher, the upwards trend is larger, increasing the probability of reversal; and also the potential earnings are larger, improving the reward : risk ratio, even though the stop size is larger.

Re-enter Trade Signal #208A Sell AUD/USD at .7506
Stop is .7541
Target#1 is .7350
Risk is 40 pips
Reward is 151 pips
Reward : Risk ratio is 3.8 to 1

For research purposes only.

No problem Itme, I'll let you know if I see any correllation between MM lines and your work. You do so much for us, it's the least I can do.

Although I only trade GBPUSD and USDJPY

For anyone thats interested in MM lines the link is below

www.murreymath.com

dear itme..
what effect with dollar if hawai suffer 6 skala richter today itme?
plis with your signal pair?
thanks
waskito

Original Quote from itme:Monday October 16 at 7:00 ET

"Since Re-entering Trade Signal #208A Sell AUD/USD at .7506 the price fell to .7488 and then rose this morning to .7530, the current price. This would be a low risk / high reward opportunity to short AUD/USD, if the original trade signal was not acted upon. The stop should be at .7546"



itme, I follow your signal very interestingly and I found report about AUD/USD at Bloomberg. Its very interesting. Report says that Aussie will go up. Also just very humble suggestion to you. Bloomberg Currency news is good place to watch fundamentals. Below is the link.

http://www.bloomberg.com/apps/news?p...efer=australia



Australian Dollar May Gain on Outlook for Higher Interest Rates
By Chris Young
Oct. 16 (Bloomberg) -- The Australian dollar may gain as it continues to benefit from speculation the Reserve Bank of Australia will raise interest rates by year-end.

Traders are betting on the central bank lifting its overnight cash rate target a quarter-point to 6.25 percent as soon as next month, whereas no change is expected in the Federal Reserve's key lending rate of 5.25 percent. The Australian dollar has gained 0.8 percent in the past week as prospects of higher rates drives demand for the currency.

``Expectations of an RBA interest-rate hike in November are supporting the Australian dollar,'' said John Kyriakopoulos, a currency strategist at National Australia Bank Ltd. in Sydney.

A rally last week against the U.S. currency was made as the dollar posted a third weekly rise against the yen and euro as investors slashed bets on a Fed rate cut.

``The Australian dollar held its gains from Thursday despite it being a good U.S. dollar night,'' said Peter Pontikis, a treasury strategist at Suncorp-Metway Ltd. in Brisbane. ``The rate-hike story has tightened up a bit in the last week or so.''

Australia's central bank will raise its benchmark rate on Nov. 8 to curb inflation, according to 18 of 25 economists surveyed by Bloomberg News after Reserve Bank Governor Glenn Stevens on Oct. 11 said he was more likely to raise borrowing costs than cut them.

The central bank's ``main job'' is to make sure inflation is ``successfully resisted,'' Stevens said in a speech.

`Performing Impressively'

Speculation of higher rates was also bolstered after a government report on Oct. 12 showed an 11th month of job gains and a 30-year low for the unemployment rate.

The next major economic report due is the third-quarter consumer-price index, which will be released Oct. 25. Stevens said he would be looking for guidance from the price report.

``The Australian dollar is performing impressively, considering broad U.S. dollar strength,'' said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. ``It should remain supported this week ahead of the key CPI.''

Uridashi Issuance

Australia's dollar also may benefit from demand for uridashi, bonds targeted at individual Japanese investors.

Toyota Motor Credit Corp. offered A$1.18 billion ($885 million) of three-year uridashi on Oct. 13 for sale until Oct. 30 and France's Caisse d'Amortissement de la Dette Sociale sold A$48.5 million of two-year uridashi today.

``A factor that may lift the Australian dollar higher this coming week is fresh Australian-dollar-denominated uridashi bond issuance,'' said Besa Deda, a currency strategist at Commonwealth Bank of Australia in Sydney. ``Net Australian dollar uridashi issuance is positive.''

Australian government bonds fell for a third day, pushing up yields of 10-year bonds 4 basis points to 5.737 percent, the highest since Aug. 18.

The price of the 6 percent bond maturing in February 2017 fell 0.259, or A$2.59 per A$1,000 face amount, to 102.018. Bond yields move inversely to price.

To contact the reporter on this story: Chris Young in Sydney at [color=#0000ff][email protected][/color] .

As far as I can determine, hurricanes, earthquakes, ice storms, droughts and the like have little or no effect on the prospect of US and ECB interest rate adjustments, and thus are irrelevant to the investors who influence price movements on the Forex market. Terrorist violence, whether private, institutional, or state sponsored, is more likely to trigger exchange rate fluctuations.

thanks itme..
btw after bernanke spoke..how do u prediction with cable?
is it still short?
thanks..

waskito

Monday October 16 at 16:30 ET

The price of AUD/USD rose to a high of .7546 today, hitting our stop exactly. On reflection, this stop was placed much too low, only 16 pips above the entry price, and not in a truly safe place. In fact, according to our trading system, we should not be entering this short trade unless the price reaches .7560. So the trade signal #208A is system non-compliant.

We are rising in a corrective Wave 4 of a large downtrend. The current Wave C of the Wave 4 up is not complete until it has completed 1-2-3-4-5. It is currently either in the third or fifth wave up of Wave C . Earlier when we shorted the AUD/USD we mistook the pattern for a completed Wave 4 "abc" up. Subsequent price patterns invalidated this interpretation. We also ignored our targetting reversal criteria, which is the reason we lost this trade.

In addition to the above technical problems with our short AUD/USD trade, fundamentals support a strong upwards movement, as fspirani brought to our attention above. (thanks, fspirani!). It is better to enter trades when both technicals and fundamentals are in agreement. It is not necessary, but it is preferable. If the technical conditions are truly fulfilled, then a trade taken contrary to prevailing sentiments is often successful.
______________________________________________________

Previous trade signal and comments:

Update Trade Signal #208A Sell AUD/USD at .7506 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Monday October 16 at 7:00 ET

Since Re-entering Trade Signal #208A Sell AUD/USD at .7506 the price fell to .7488 and then rose this morning to .7530, the current price. This would be a low risk / high reward opportunity to short AUD/USD, if the original trade signal was not acted upon. The stop should be at .7546
__________________________________________________ ___
Re-enter Trade Signal #208A Sell AUD/USD at .7506 <hr style="color: rgb(209, 209, 225);" size="1"> Thursday October 12 at 10:30 ET

The small upwards Wave c of the corrective Wave 4 trend in AUD/USD (which according to EW Theory was inevitable) received a medium sized boost from the favorable employment data yesterday, exacerbating the upwards wave, causing our stop to be hit. It carried AUD/USD higher than the first likely reversal value, and then past two more values to the fourth which is a very high probability reversal value of .7509. As Newstrader says below, the dollar currencies move in their own sphere independent for the most part from the European and Asian currencies. It is common for one of the dollar currencies to rise while GBP and EUR are falling relative to the USD. This accounts for the large swings in EUR/CAD, EUR/AUD, AUD/JPY, etc.

As reason and previous experience indicates, the likelihood of success of this re-entry trade is higher than the previous, initial trade, and it is a better trade in terms of reward: risk ratio also. The entry price is higher, the upwards trend is larger, increasing the probability of reversal; and also the potential earnings are larger, improving the reward : risk ratio, even though the stop size is larger.

Re-enter Trade Signal #208A Sell AUD/USD at .7506
Stop is .7541
Target#1 is .7350
Risk is 40 pips
Reward is 151 pips
Reward : Risk ratio is 3.8 to 1

For research purposes only.

Hi,

itme what do you think Elliott wave analysis from this website?
Here is the link http://www.alpari-idc.com/en/analyti...ly/061016.html
Thanks

Hi Itme,

You wave analysis and signal is very impressive. When you count the wave, what timeframe do you use, especially when you give signal? Daily or H4?

thank you
futurefuture

To count the Elliott Waves properly is a science. Shortcuts, laziness and imprecision will prevent the correct answer being arrived at. One must study the waves on all time frames from one month candles to the one minute chart and tabulate all the results to accurately know what the correct wave count is. One must know the accurate count on the previous wave in order to know where to begin the count on the present wave. To be off on the count is usually to lose the trade. The rules are not always strictly adhered to by the real world market, but the underlying principles are adhered to with astonishing consistency.

That being said, the most useful charts to me are the :

1 month
1 day
3 hours, 1 year
1 hour, 30 days
5 min, 5 days
1 min, 24 hours

Monday October 16 at 22:15 ET

Trading daily Wave 1 down:

Trade Signal #211 Sell AUD/CAD at .8600

Stop is .8626

Target is .8300

Risk is 35 pips

Reward is 291 pips

Reward : Risk ratio is 8.3 to 1

For research purposes only.

I think you might mean GBPUSD...

Actually, I meant AUD/CAD -check out the pattern. I think it's ideal from the perspective of our trend reversal system. But out of habit I stuck in the 1's!

The CAD has been depreciating while the AUD has been appreciating meaning- opportunity on the cross pairs.

Thanks for the heads up.