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Low Risk, High Reward Trading Experiment

  • #1,821
  • Edited 5:21am Nov 21, 2006 4:55am | Edited 5:21am
Tuesday November 21 at 5:45 ET

GBP/JPY reversed direction at 222.48 as we recognised at the time, and rose about 90 pips to 223.36, then corrected down to 222.75 - just 5 pips past the point where we predicted it would turn around, and which we stated would be a viable entry for a buy trade. It then rose 149 pips to a recent high of 224.27. We now believe that it will reverse again and fall in a downwards Wave 4 A-B-C corrective wave, to about 223.50, and then reverse again and resume its climb to the ultimate high about 225.00 to 226.00.

The target of this corrective A-B-C wave is 223.50

The current price is 224.15
_________________________________________________

Previous predictions and analysis:

Analysis of GBP/JPY for Friday November 17 at 5:30 ET

GBP/JPY did indeed rise as predicted from the reversal point at 222.48 to a recent high of 223.36 and is now engaged in a downwards A-B-C corrective wave.

The current price is 223.20.

The bottom of this wave at about 222.80 could be a viable low risk : high reward long trade with a target of 225.00 to 226.00. The safest trade will be the trade down from this ultimate high point, however.
__________________________________________

Analysis of GBP/JPY for Wednesday November 15 9:30 ET <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message -->
GBP/JPY has fallen this morning to 222.48, which appears to be the low for this downwards trend which took it down 280 pips from its recent high of 225.28. It is now headed back up to about 225.00 again as GBP/USD rises strongly.

The current price is 222.68
  • #1,822
  • Nov 21, 2006 5:57am Nov 21, 2006 5:57am
Tuesday November 21 at 5:45 ET

In case this is not the beginning of a five wave set down, but the price goes back up to the top again, we recommend exiting Trade Signal #243 Sell EUR/GBP at .6787 at the current price of .6752 or so.

Profit is 32 pips, and risk was 18 pips, so the reward / risk ratio is 1.78

______________________________________________

Previous trade signal:

Wednesday November 15 at 10:00 ET

Trade Signal #243 Sell EUR/GBP at .6787
Stop is .6802
Target is .6680
Risk is 18 pips
Reward is 94 pips
Reward : Risk ratio is 5.2 to 1

For research purposes only.

This may be the beginning of a Wave 5 downwards.
  • #1,823
  • Nov 21, 2006 7:12am Nov 21, 2006 7:12am
Tuesday November 21 at 8:00 ET

I wasn't watching it at the time, but AUD/USD descended as predicted after our temporary exit signal at .7702 and fell 16 pips to .7686 at 3:20 ET this morning, comprising a 38.2% retracement exactly, and forming an obvious A-B-C pattern. It also met our exact high probability reversal number at this value. We should therefore have re-entered a long trade at .7702, and be holding for our target at about .7725 to .7800, and most likely .7800.
_______________________________________________

Previous trade signal and temporary exit signal:

Temporarily Exit Trade Signal #244 Buy AUD/USD at .7702 <hr style="color: rgb(209, 209, 225);" size="1"> Monday November 20 at 15:00 ET

I was busy expostulating on my approach to Elliott Wave theory on the Elliott Wave thread ( http://www.forexfactory.com/forexfo...rket#post143001 ), but meant to share this advise here a little while ago. My wave analysis indicates that there is likely to be a substantial retracement of AUD/USD at .7702. So the more active trader could exit their long AUD/USD trade at that price in order to get a chance of increasing their profits on their trade. Re-enter after the market has descended the proper amount and formed an A-B-C pattern.

After more careful study it looks like the price will descend to only about .7690 to .7695 before reversing and continuing upwards towards a probable high of .7715 to .7745 , which would be the top of the first part of the Fifth Wave. Re-enter a buy trade at the bottom of the small retracement, or better yet, wait for the top of the first of the fifth wave at about .7745 to sell for the downwards A-B-C wave which will have a target of about .7670. This downwards trade, being a corrective wave, is not an ideal trade either, as the reward / risk ratio will be quite low.

Trading upwards from the bottom of the second wave of the fifth wave is the next good trade opportunity, with an entry at about .7670 and a target of about .7800 . The third wave is usually the largest and fastest wave.

The best and ideal trade will be entering a sell trade at the top of the fifth wave at about .7800 to .7850, with a target at about .7550.
_____________________________________________
Friday November 17 at 8:15 ET

Trade Signal #244 Buy AUD/USD at .7644

We recently sold AUD/USD twice, obtaining 60 and 44 pips of profit. Since we last exited AUD/USD fell to .7614, thirty pips lower than we expected, and the price has subsequently risen in two impulse waves and fallen in two corrective waves. We believe that it has just finished its fourth wave down which means that we can buy it at the current market price of .7644 and hold for a target of about .7800.

The stop is .7628
Target is .7800
Risk is 18 pips
Reward is 162 pips
Reward : Risk ratio is 9.0 to 1
  • #1,824
  • Nov 21, 2006 9:10am Nov 21, 2006 9:10am
Tuesday November 21 at 10:00 ET

Trade Signal #233C Buy GBP/CHF at 2.3520 entered on November 15 reached the top of Wave 3 at the price of 2.3620. This would have been a good place to execute an interim exit of the trade, securing 85 pips of profit, pending re-entry of the buy trade at the bottom of Wave 4 following an A-B-C wave pattern and 50% to 62.9% retracement.

We intended to post this elert earlier, but we were unable to due to being busy trading the USD/CAD while it moved in response to today's news releases. The target for the re-entered GBP/CHF trade is 2.3730

____________________________________________________________________

Previous comments and trade signals:

Wednesday November 15 at 10:15 ET
Trade Signal #233C Buy GBP/CHF at 2.3520
Stop is 2.3494
Target is 2.3730
Risk is 40 pips
Reward is 196 pips
Reward : Risk ratio is 4.9 to 1

For research purposes only.
________________________________________________

Update on Trade Signal #233B Buy GBP/CHF at 2.3580 <!-- / icon and title --> <!-- message -->

Tuesday November 15 at 7:30 ET
The current price is 2.3558.

This Trade Signal #233B Buy GBP/CHF at 2.3580 would have been stopped out by 1 pip when the price fell to 2.3548, except that our stop adjustment procedure would have lowered the stop to 2.3543 and allowed us to squeak by. The price then rose to 2.3643, 63 pips above our entry price, when USD/CHF rose strongly, which would have been an excellent exit price that someone studying the Elliott Waves on the 1 minute chart might have discerned, and then the price of GBP/CHF fell to 1.1953 when GBP/USD fell strongly.

We expect GBP/USD to rise strongly, which could propel GBP/CHF up to a conservative target of 2.3650, or an ambitious target of 2.3685. The original target of Target is 2.3730 is not likely to be met before the price goes down to a new low to finish off the downtrend.
______________________________________________

Tuesday November 14 at 5:15 ET
Trade Signal #233B Buy GBP/CHF at 2.3580
Stop is 2.3549
Target is 2.3730
Risk is 46 pips
Reward is 135 pips
Reward : Risk ratio is 2.9 to 1

For research purposes only.

Note: due to the fact that the reward : risk ratio for this trade signal is not very high, and the trade is counter-trend (Wave 4 upwards), this is not an advised trade, just a research study.
________________________________________________

Delay re-entry of long GBP/CHF trade in case it goes further south

After buying GBP/CHF according to Trade Signal #233A Buy GBP/CHF at 2.3630 the price rose to 2.3729, and we advised a temporary exit at 2.3724 to capture 80 pips of profit. The price has since fallen 72 pips to 2.3652.

After reviewing the situation it looks like there is a chance that GBP/CHF has not finished its downtrend yet, and may fall once more in a fifth and final wave to a new low at about 2.3565. We could re-enter our buy trade at about 2.3650, but this would be a little bit risky. There will be a better entry position for a low risk / high reward buy trade if the price falls to about 2.3565.
______________________________________________

Temporary Exit of Trade Signal #233A Buy GBP/CHF at 2.3630

Friday November 10 16:45 ET

We believe that USD/CHF is due to fall quite strongly about now (current high about 1.2417), bringing down GBP/CHF. Therefore we advise temporary exit of GBP/CHF long trade at 1.3724 to capture 80 pips of profit.
Re-enter long position following completion of A-B-C corrective downwards wave.
__________________________________________________

Friday November 10 2:00 ET
Trade Signal #233A Buy GBP/CHF at 2.3630
Stop is 2.3597
Target #1 is 2.3865
Risk is 48 pips
Reward is 220 pips
Reward : Risk ratio is 4.6 to 1

For research purposes only.
_____________________________________

Comment on Trade Signal #233 Buy GBP/CHF at 2.3666
The trade concept Trade Signal #233 Buy GBP/CHF at 2.3666 was predicated on a failed fifth wave down. This turned out not to be the case, as a fifth wave materialised, carrying the price down to 2.3643 - precisely our stop . The problem is that I didn't calculate the most probable reversal values, and it turns out that 2.3643 is the most probable reversal value exactly . So, in a conservative strategy, we would not enter a trade before the most probable reversal value is reached, and furthermore, we would never place a stop precisely on a most probable reversal value, but 10 to 15 pips on the far side of it .
__________________________________________________ ___

Thursday November 9 12:00 ET
Trade Signal #233 Buy GBP/CHF at 2.3666
Stop is 2.3634
Target #1 is 2.3840
Risk is 47 pips
Reward is 160 pips
Reward : Risk ratio is 3.4 to 1

For research purposes only.
  • #1,825
  • Nov 21, 2006 7:59pm Nov 21, 2006 7:59pm
any thought on uchf? is it time to long uchf?
  • #1,826
  • Nov 21, 2006 10:14pm Nov 21, 2006 10:14pm
hi
EUR-USD & GBP-USD are rising pretty fast in the asian session, that's why i would like to ask you if you still consider to enter these trades as Low Risk High Reward

1- short EUR-USD @ 1.2876 area
2- short GBP-USD @ 1.9050 area

as I've been reading on your prevoius posts here.
is that correct, or am i missing something ?
thanks for sharing us your hard work
  • #1,827
  • Edited 1:17am Nov 22, 2006 1:01am | Edited 1:17am
Hi Blondy101.

First of all, thanks for the question.

Secondly, I would like to make a clear distinction between my predictions, which are for practising my system of analysis and learning only, and my actual formal numbered trade signals, which are more carefully analysed, viable trade opportunities according to my system. Sometimes a prediction is also a viable trade opportunity, but I just don't have time to do all the analysis to define the numbers and document it on this thread.

A viable trade has to have an entry point that is met, a stop that is not met, and a target that is met. And the distance to the target from the entry should be at least five times the distance from the entry point to the stop. Each setup is different. Sometimes we can use a small stop, and other times we need a much larger one, according to the particular setup and our ever evolving system. So we never know whether we have a viable trade until the situation totally evolves. Also, the wave pattern has to represent a viable completion pattern on ALL time scales. The actual entry price, stop, and target can be estimated ahead of time, but the closer we get to the entry price, the more information we have and the better able we are to assess the situation and perfect the actual numbers.

A built in protective aspect of our system is that when a setup is not compliant due to a small reward : risk ratio, then often the price will move further in the direction of the trend, bringing it to another probable reversal value, and a price where a smaller stop is needed, and a larger reward is possible, and a much better reward : risk ratio is available, and a much more clear Elliott Wave pattern has formed.

Regarding your question about the top of this trend, I will need to do another intensive analysis to confirm the predicted reversal figures. On the face of it, however, they look plausible.

However, the fact that the market is trending steadily upward towards our target does not have any bearing on the validity of the reversal target. Sometimes the market forms a steep parabolic rise as it rises to its turnaround point. Our system involves predicting the top point of a long trend. This is considered impossible by most traders. It is like stepping in front of a speeding race car, at the exact point where it is going to come to a screaming halt. It is not an advised method of trading.
  • #1,828
  • Nov 22, 2006 2:07am Nov 22, 2006 2:07am
Wednesday November 22 at 3:00 ET

Everything looks good for a perfect touchdown at 1.9050 on the following trade where we bought GBP/USD at a price of 1.8850 with an adjusted target of 1.9050.

The recent high is 1.9047, just 3 pips short of our adjusted target.

_____________________________________________________

Previous trade signal and target adjustment:

Trade Signal #240 Buy GBP/USD Adjust target to 1.9050 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --><!-- message --> Tuesday November 21 at 1:15 ET

A conservative re-interpretation of the wave patterns on GBP/USD causes us to change our wave count and adjust our target. The upwards trend may be finished, and a downwards trend underway, so the target for this corrective wave should be closer. As the price patterns unfold, then we may increase the target later. The recent high is 1.8994 .

Trade Signal #240 Buy GBP/USD at 1.8850

Adjust target to 1.9050
__________________________________________________ _________

Thursday November 16 at 4:00 ET

Re-entry opportunity Trade Signal #240 Buy GBP/USD at 1.8850
____________________________________________________

Previous trade signal:

Wednesday November 15 at 5:45 ET
Trade Signal #240 Buy GBP/USD at 1.8850
Stop is 1.8809
Target is 1.9150
Risk is 44 pips
Reward is 297 pips
Reward : Risk ratio is 6.8 to 1

For research purposes only.

We believe that this will be Wave B up of a downwards corrective Wave 4. Note that there is another very high probability reversal value at about 1.8820. The very conservative trader should wait in hopes that the price will descend to this level and enter there with a proportionately lower stop. Given that GBP/USD frequently travels long distances and overshoots our estimated reversal values, it is not too farfetched that it could reach this lower price. Also, the time of day is somewhat early for a reversal of the trend.

p.s. - GBP/USD subsequently fell to 1.8836, still clear of our stop, but 14 pips past our entry price. This may be the turnaround point.
  • #1,829
  • Edited 3:20am Nov 22, 2006 2:41am | Edited 3:20am
Wednesday November 22 at 3:30 ET

Trade Signal #247 Sell GBP/USD at 1.9060

Stop is 1.9093

Target is 1.8750

Risk is 37 pips

Reward is 306 pips

Reward : Risk ratio is 8.3 to 1

For research purposes only.<!-- / message --><!-- controls -->
  • #1,830
  • Edited 4:02am Nov 22, 2006 2:55am | Edited 4:02am
Wednesday November 22 at 3:30 ET

Re-entry opportunity to sell EUR/CAD at 1.4739

The adjusted stop is 1.4762
 ________________________________________________

Previous trade signal and comments:

 Tuesday November 21 at 3:00 ET

Re-entry opportunity for Trade Signal #245A Sell EUR/CAD at 1.4710

The recent high on November 20 at 11:00 ET was 1.4717. This may be the top of the trend, so this is a re-entry opportunity to short EUR/CAD.

Entry price is 1.4710
The stop is 1.4752
Target is 1.4425
Risk is 52 pips
Reward is 285 pips
Reward : Risk ratio is 5.5 to 1

For research purposes only.

Note: there is another very high likelihood reversal target at about 1.4875. The conservative trader will wait and see if EUR/CAD makes it up there, which will be a far superior trade if it materialises.
 _______________________________________
EUR/CAD update for Monday November 20 at 6:00 ET <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> As we stated above "Now another two impulsive waves have formed, so EUR/CAD is nearing completion at the current price of about 1.4715. The only remaining question is where the top of this last wave is. My charts are down so I cannot confirm the exact details. A re-entry for a short trade will be possible now [price at the time was about 1.4705, not 1.4715 according to my charts] or soon, with the stop above 1.4750."

The price fell subsequently to 1.4680 and then rose in what may have been the final wave up to 1.4714. The Elliott Wave pattern was potentially complete, but fuzzy towards the very end, but our trend reversal prediction system gave us 1.4713 as the most probable reversal number, only 1 pip off the actual reversal value. The ultimate high has probably been met, and the trend is therefore downwards from here.
__________________________________________________ __
EUR/CAD - Error in Wave Count <hr style="color: rgb(209, 209, 225);" size="1"> Friday November 17 at 19:00 ET

I made an honest error in counting the waves in EUR/CAD. In the final or fifth wave the internal count was seemingly complete when I entered Trade Signal #245 Sell EUR/CAD at 1.4678. There was a five wave set up to the entry price, but then a breakout above that price indicated that the wave we counted was only the first of three impulse waves in the impulsive five wave set, not the entire wave. Now another two impulsive waves have formed, so EUR/CAD is nearing completion at the current price of about 1.4715. The only remaining question is where the top of this last wave is. My charts are down so I cannot confirm the exact details. A re-entry for a short trade will be possible now or soon, with the stop above 1.4750.
______________________________________

Friday November 17 at 10:15 ET
Trade Signal #245 Sell EUR/CAD at 1.4678
The stop is 1.4712
Target is 1.4425
Risk is 44 pips
Reward is 243 pips
Reward : Risk ratio is 5.5 to 1

For research purposes only.
__________________________________________________ ___
EUR/CAD commentary for Friday November 17 at 5:30 ET <hr style="color: rgb(209, 209, 225);" size="1">Friday November 17 at 5:30 ET

EUR/CAD rose just now to 1.4634. Wave analysis suggests that it will now fall about 100 pips to 1.4520 to 1.4550 and then rise to a new high at about 1.4650. This new high will be a good low risk / high reward trade opportunity to sell EUR/CAD for a long move downwards. By then it will have been range bound for about a week, and be ready for a good run.

_______________________________________________

<hr style="color: rgb(209, 209, 225);" size="1">On November 13 , 2006 I said " According to my analysis, if EUR/CAD rises to between 1.4645 and 1.4665 from its current price of 1.4555, and finishes a small upwards five wave pattern (starting at 1.4518), then it will possibly be a good short for a Wave 4 corrective wave down to about 1.4350."

_____________________________________

As of Wednesday November 15, this is the situation:

The price subsequently rose to 1.4631, close to the target entry price, then fell to 1.4550. The price may rise again to between 1.4645 and 1.4665 after it falls to about 1.4535, and present a good low risk : high reward opportunity to short this volatile pair. The current price is 1.4605, and appears poised to fall.
  • #1,831
  • Nov 22, 2006 2:58am Nov 22, 2006 2:58am
Quoting itme
Wednesday November 22 at 3:30 ET

Re-entry opportunity to sell EUR/CAD at 1.4739
________________________________________________

Previous trade signal and comments:

Tuesday November 21 at 3:00 ET

Re-entry opportunity for Trade Signal #245A Sell EUR/CAD at 1.4710

The recent high on November 20 at 11:00 ET was 1.4717. This may be the top of the trend, so this is a re-entry opportunity to short EUR/CAD.

Entry price is 1.4710
The stop is 1.4752
Target is 1.4425
Risk is 52 pips
Reward is 285 pips
Reward : Risk ratio is 5.5 to 1

For research purposes only.

Note: there is another very high likelihood reversal target at about 1.4875. The conservative trader will wait and see if EUR/CAD makes it up there, which will be a far superior trade if it materialises.
_______________________________________


EUR/CAD update for Monday November 20 at 6:00 ET <HR style="COLOR: rgb(209,209,225)" SIZE=1><!-- / icon and title --><!-- message -->As we stated above "Now another two impulsive waves have formed, so EUR/CAD is nearing completion at the current price of about 1.4715. The only remaining question is where the top of this last wave is. My charts are down so I cannot confirm the exact details. A re-entry for a short trade will be possible now [price at the time was about 1.4705, not 1.4715 according to my charts] or soon, with the stop above 1.4750."


The price fell subsequently to 1.4680 and then rose in what may have been the final wave up to 1.4714. The Elliott Wave pattern was potentially complete, but fuzzy towards the very end, but our trend reversal prediction system gave us 1.4713 as the most probable reversal number, only 1 pip off the actual reversal value. The ultimate high has probably been met, and the trend is therefore downwards from here.
__________________________________________________ __


EUR/CAD - Error in Wave Count <HR style="COLOR: rgb(209,209,225)" SIZE=1>Friday November 17 at 19:00 ET


I made an honest error in counting the waves in EUR/CAD. In the final or fifth wave the internal count was seemingly complete when I entered Trade Signal #245 Sell EUR/CAD at 1.4678. There was a five wave set up to the entry price, but then a breakout above that price indicated that the wave we counted was only the first of three impulse waves in the impulsive five wave set, not the entire wave. Now another two impulsive waves have formed, so EUR/CAD is nearing completion at the current price of about 1.4715. The only remaining question is where the top of this last wave is. My charts are down so I cannot confirm the exact details. A re-entry for a short trade will be possible now or soon, with the stop above 1.4750.
______________________________________

Friday November 17 at 10:15 ET
Trade Signal #245 Sell EUR/CAD at 1.4678
The stop is 1.4712
Target is 1.4425
Risk is 44 pips
Reward is 243 pips
Reward : Risk ratio is 5.5 to 1

For research purposes only.

__________________________________________________ ___


EUR/CAD commentary for Friday November 17 at 5:30 ET <HR style="COLOR: rgb(209,209,225)" SIZE=1>Friday November 17 at 5:30 ET


EUR/CAD rose just now to 1.4634. Wave analysis suggests that it will now fall about 100 pips to 1.4520 to 1.4550 and then rise to a new high at about 1.4650. This new high will be a good low risk / high reward trade opportunity to sell EUR/CAD for a long move downwards. By then it will have been range bound for about a week, and be ready for a good run.

_______________________________________________



<HR style="COLOR: rgb(209,209,225)" SIZE=1>On November 13 , 2006 I said " According to my analysis, if EUR/CAD rises to between 1.4645 and 1.4665 from its current price of 1.4555, and finishes a small upwards five wave pattern (starting at 1.4518), then it will possibly be a good short for a Wave 4 corrective wave down to about 1.4350."


_____________________________________

As of Wednesday November 15, this is the situation:

The price subsequently rose to 1.4631, close to the target entry price, then fell to 1.4550. The price may rise again to between 1.4645 and 1.4665 after it falls to about 1.4535, and present a good low risk : high reward opportunity to short this volatile pair. The current price is 1.4605, and appears poised to fall.
Hey ITME,

The AUD/USD and EUR/USD look ripe for a short, what say you???

Regards

Alex
  • #1,832
  • Nov 22, 2006 3:29am Nov 22, 2006 3:29am
Wednesday November 22 at 4:15 ET

EUR/USD, according to our system, should rise to 1.2875 which is a high probability reversal point. The recent high is 1.2873, 2 pips short of our reversal target.

According to the Elliott Wave pattern on the 1 minute chart, EUR/USD should rise up one more time to slightly higher than before.

EUR/USD just rose about 110 pips, compared to GBP/USD - which rose about 220 pips. I would prefer to trade GBP/USD in a downwards direction, as the profits are likely to be higher compared to shorting EUR/USD.
  • #1,833
  • Edited 4:18am Nov 22, 2006 3:39am | Edited 4:18am
Wednesday November 22 at 4:15 ET]

Re-enter buy trade on Trade Signal #233C Buy GBP/CHF at 2.3535

A clear A-B-C downwards corrective wave is now complete, and the most high probability reversal value of 2.3530 was met as predicted yesterday November 21.
 ______________________________________________________

Previous comments and trade signals:

Temporarily Exit Trade Signal #233C Buy GBP/CHF <hr style="color: rgb(209, 209, 225);" size="1"> Tuesday November 21 at 10:00 ET

Trade Signal #233C Buy GBP/CHF at 2.3520 entered on November 15 reached the top of Wave 3 at the price of 2.3620. This would have been a good place to execute an interim exit of the trade, securing 85 pips of profit, pending re-entry of the buy trade at the bottom of Wave 4 following an A-B-C wave pattern and 50% to 62.9% retracement.

We intended to post this elert earlier, but we were unable to due to being busy trading the USD/CAD while it moved in response to today's news releases. The target for the re-entered GBP/CHF trade is 2.3530

__________________________________________________ __________________

Wednesday November 15 at 10:15 ET
Trade Signal #233C Buy GBP/CHF at 2.3520
Stop is 2.3494
Target is 2.3730
Risk is 40 pips
Reward is 196 pips
Reward : Risk ratio is 4.9 to 1

For research purposes only.
________________________________________________

Update on Trade Signal #233B Buy GBP/CHF at 2.3580 <!-- / icon and title --> <!-- message -->

Tuesday November 15 at 7:30 ET
The current price is 2.3558.

This Trade Signal #233B Buy GBP/CHF at 2.3580 would have been stopped out by 1 pip when the price fell to 2.3548, except that our stop adjustment procedure would have lowered the stop to 2.3543 and allowed us to squeak by. The price then rose to 2.3643, 63 pips above our entry price, when USD/CHF rose strongly, which would have been an excellent exit price that someone studying the Elliott Waves on the 1 minute chart might have discerned, and then the price of GBP/CHF fell to 1.1953 when GBP/USD fell strongly.

We expect GBP/USD to rise strongly, which could propel GBP/CHF up to a conservative target of 2.3650, or an ambitious target of 2.3685. The original target of Target is 2.3730 is not likely to be met before the price goes down to a new low to finish off the downtrend.
______________________________________________

Tuesday November 14 at 5:15 ET
Trade Signal #233B Buy GBP/CHF at 2.3580
Stop is 2.3549
Target is 2.3730
Risk is 46 pips
Reward is 135 pips
Reward : Risk ratio is 2.9 to 1

For research purposes only.

Note: due to the fact that the reward : risk ratio for this trade signal is not very high, and the trade is counter-trend (Wave 4 upwards), this is not an advised trade, just a research study.
________________________________________________

Delay re-entry of long GBP/CHF trade in case it goes further south

After buying GBP/CHF according to Trade Signal #233A Buy GBP/CHF at 2.3630 the price rose to 2.3729, and we advised a temporary exit at 2.3724 to capture 80 pips of profit. The price has since fallen 72 pips to 2.3652.

After reviewing the situation it looks like there is a chance that GBP/CHF has not finished its downtrend yet, and may fall once more in a fifth and final wave to a new low at about 2.3565. We could re-enter our buy trade at about 2.3650, but this would be a little bit risky. There will be a better entry position for a low risk / high reward buy trade if the price falls to about 2.3565.
______________________________________________

Temporary Exit of Trade Signal #233A Buy GBP/CHF at 2.3630

Friday November 10 16:45 ET

We believe that USD/CHF is due to fall quite strongly about now (current high about 1.2417), bringing down GBP/CHF. Therefore we advise temporary exit of GBP/CHF long trade at 1.3724 to capture 80 pips of profit.
Re-enter long position following completion of A-B-C corrective downwards wave.
__________________________________________________

Friday November 10 2:00 ET
Trade Signal #233A Buy GBP/CHF at 2.3630
Stop is 2.3597
Target #1 is 2.3865
Risk is 48 pips
Reward is 220 pips
Reward : Risk ratio is 4.6 to 1

For research purposes only.
_____________________________________

Comment on Trade Signal #233 Buy GBP/CHF at 2.3666
The trade concept Trade Signal #233 Buy GBP/CHF at 2.3666 was predicated on a failed fifth wave down. This turned out not to be the case, as a fifth wave materialised, carrying the price down to 2.3643 - precisely our stop . The problem is that I didn't calculate the most probable reversal values, and it turns out that 2.3643 is the most probable reversal value exactly . So, in a conservative strategy, we would not enter a trade before the most probable reversal value is reached, and furthermore, we would never place a stop precisely on a most probable reversal value, but 10 to 15 pips on the far side of it .
__________________________________________________ ___

Thursday November 9 12:00 ET
Trade Signal #233 Buy GBP/CHF at 2.3666
Stop is 2.3634
Target #1 is 2.3840
Risk is 47 pips
Reward is 160 pips
Reward : Risk ratio is 3.4 to 1

For research purposes only.
  • #1,834
  • Nov 22, 2006 3:43am Nov 22, 2006 3:43am
Do you keep an eye on the AUD/USD pair?

Alex
  • #1,835
  • Nov 22, 2006 3:49am Nov 22, 2006 3:49am
Wednesday November 22 at 4:45 ET

Adjust target on Trade Signal #239 Sell USD/CHF at 1.2507 to 1.2358.

It is possible for the original target of 1.2350 to be reached, but the conservative position is to have adjusted this target to 1.2358 as there are high probability reversal values at this price according to several vectors of analysis.

Recent low is 1.2357
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Previous trade signal:

 Friday November 17 at 5:00 ET

Re-entry opportunity at 1.2520 for Trade Signal #239 Sell USD/CHF at 1.2507
Revised stop is 1.2546
Revised target is 1.2350
Revised risk is 30 pips
Revised reward is 166 pips

Revised reward : risk ratio is 5.5 to 1
 <hr style="color: rgb(209, 209, 225);" size="1"> Previous trade signal:

 Wednesday November 15 at 5:30 ET
Trade Signal #239 Sell USD/CHF at 1.2507
Stop is 1.2536
Target is 1.2315
Risk is 32 pips
Reward is 189 pips
Reward : Risk ratio is 5.9 to 1

For research purposes only.
  • #1,836
  • Nov 22, 2006 4:05am Nov 22, 2006 4:05am
Wednesday November 22 at 5:00 ET

Trade Signal #248 Buy USD/CHF at 1.2350

Stop is 1.2325

Target is 1.2545

Risk is 29 pips

Reward is 191 pips

Reward : Risk ratio is 6.6 to 1

For research purposes only.
  • #1,837
  • Nov 22, 2006 4:32am Nov 22, 2006 4:32am
Hi itme,

I just see ur forecast. Based on what indicators u made these?

Thanks!!
  • #1,838
  • Nov 22, 2006 4:40am Nov 22, 2006 4:40am
The basis of all of my forecasts is my personal interpretation of Elliott Wave theory, based on the fundamentals of that theory and my careful observations of price movements in the forex market for 13 months (full time), plus another analytical model which I invented based on the patterns of price movement, which generate high probability of reversal values on various time frames.
  • #1,839
  • Nov 22, 2006 4:50am Nov 22, 2006 4:50am
Wednesday November 22 at 5:45 ET

USD/CAD rose to a recent high of 1.1493 as predicted November 20 ("The best trade is to short USD/CAD at the top of this Third Upwards Wave at about 1.1490 to 1.1515, with the target between 1.1350 and 1.1400.") and it now seems to be approaching a reversal point at the bottom of its current Wave 4 downtrend, and is preparing to rise to about 1.1500 or higher one more time in its fifth wave before it begins its long downtrend.

The most probable reversal value is 1.1428. The recent low is 1.1431, and it may not go any lower than this again. If we were to make a buy trade out of this, then the stop would be at 1.1408, which would make the risk about 24 pips. The probable reward would be only about 70 pips, so the reward : risk ratio would be only about 3.0, which is inadequate. The entry point may or may not be met.

A better trade opportunity will arise if the price rises to 1.1500 or higher, and a complete Elliott Wave pattern develops on the fifth upwards wave. Then we could go short with a large potential reward, trading the large downtrend from the beginning.
____________________________________________
Previous trade signals:

Exit USD/CAD sell trade at about 1.1445 to 1.1460 - wrong wave count <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Monday November 20 at 17:00 ET

Trade Signal #242A Sell USD/CAD at 1.1450 / 1.1472 was a sell at the top of an upwards Wave 3, and not the top of an upwards Wave 5 which it should have been to qualify as a low risk : high reward trade. Not being the top of Wave 5, it was not the top of a trend. This was actually very obvious.

Therefore we should not have entered this trade, and failing that, we should have exited this trade at the bottom of Wave 4 at 1.1421, which was very precisely specified by our trend reversal system as well as Elliot Wave Theory. This way we would have made a profit of either 25 or 45 pips, depending on our entry price.

We could have then entered a buy trade at 1.1421, with a target between 1.1490 and 1.1515. However, this would not have been a great trade because the reward : risk ratio would be somewhat low.

The best trade is to short USD/CAD at the top of this Third Upwards Wave at about 1.1490 to 1.1515, with the target between 1.1350 and 1.1400.

If anyone is still short USD/CAD, then they should exit at about 1.1460, or wherever the current small downtrend ends.
__________________________________________

Friday November 17 at 4:45 ET

Especially good trade opportunity to short USD/CAD right now <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> At the current price of 1.1472, USD/CAD is an especially good short opportunity. The stop should be adjusted to 1.1491. The original entry price was too low, and the stop should have been in a more conservative location.
Trade Signal #242A Sell USD/CAD at 1.1450
Stop is 1.1474
Target is 1.1210
Risk is 28 pips
Reward is 236 pips
Reward : Risk ratio is 8.4 to 1

For research purposes only.
  • #1,840
  • Nov 22, 2006 5:11am Nov 22, 2006 5:11am
Quoting itme
Wednesday November 22 at 3:30 ET

Trade Signal #247 Sell GBP/USD at 1.9060

Stop is 1.9093

Target is 1.8750

Risk is 37 pips

Reward is 306 pips

Reward : Risk ratio is 8.3 to 1

For research purposes only.<!-- / message --><!-- controls -->
I think the UK Minutes meeting which came out was positive for GBP, which might trigger this SL.
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