Low Risk, High Reward Trading Experiment

Friday November 24 at 9:00 ET

Trade Signal #256 Buy USD/CHF at 1.2050

Stop is 1.1995

Target is 1.2325

Risk is 60 pips

Reward is 270 pips

Reward : Risk ratio is 4.5 to 1

For research purposes only.

We are trading what we believe is the first or A wave of a large Fourth Wave up.

I have been following this thread with great interest. This signal was good, even so I changed the target a little based on my fibs (got cold feet I guess), but when I woke up I had a great profit in my demo.
I am wondering if the signal provider comes out of beta, will you still be able to share, or can we use the same provider?

Thank you very much for this great thread.

For some strange reason my friend who knew about this forum suggested that I say that there was a signal provider from whom these signals originated. So not knowing the drills around here I went along with the notion. But now everyone knows that I am developing the signals with my system which I am developing myself.

If this ever comes out of beta, who knows what will happen? Perhaps I will get rich and retire, or else start a team (if possible) to generate quality signals on a consistent basis to help the traders of the world.

Friday November 24 at 9:30 ET

EUR/CAD did as expected, forming an A-B-C corrective pattern down and then continuing with an extended third wave up to the high of 1.4889, a rise of 134 pips from the bottom of the corrective wave. The price moved 8 pips past our high probability reversal target.

EUR/CAD is either complete on its upwards trend, or is now engaged in a wave 4 correction, after which it will rise again to finish this last and final Fifth Wave of an even larger FIFTH WAVE, at which point we will generate a sell trade signal. The price at that point will be about 1.4900

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Previous update:

EUR/CAD update for Wednesday November 22 at 20:00 ET <hr style="color: rgb(209, 209, 225);" size="1"> EUR/CAD did reverse at the re-entry opportunity short price given earlier today and descended 60 pips to the bottom of the five day consolidation channel. In doing so it formed either an A-B-C or 1-2-3 wave pattern. The conservative trader would have exited at this point with 50 pips of profit and waited to see if there would be one more big move upwards before the reversal of the trend.

Those with a bullish bias could have re-entered a buy trade at 1.4680 , the bottom boundary of the consolidation channel, to trade back up to the top of the consolidation range, or even above.

In fact, the price of EUR/CAD moved up strongly this morning, pulled by the strong rise in EUR/USD, and broke through the top of the consolidation range, which means that another impulse wave is occuring upwards, and went up to a recent high of 1.4783. The rise was 103 pips.

The pattern formed is a 1-2-3 pattern of a 1-2-3-4-5 impulse wave set. An A-B-C corrective wave is now underway, to be followed by a fifth wave. Another alternative interpretation is that there will be an extended third wave, in which case we will see the continuation of Wave 3 after the corrective wave is complete. This is my preferred hypothesis.

The next good trade opportunity will be at the top of the fifth wave, trading downwards.

Itme,

Since you are signaling a buy at 1.2050 and USD/CHF is still above and has not descended to 1.2050, are you saying that you wil wait until the buy level is hit, before opening the order? OR, do you open a trade immediately on the signal regardless of where it is now?

Thanks,

Lyle

Itme,

are you sure this a buy of USD/JPY is possible ?
Looking t the rate, right now it's 115.80.
What is the expire on this one ?

Perhaps a long night took it's toll.

Krkvak

To Lyle and Krkvak,

If this was a real signal service, the instructions would be to enter only and exactly at the entry prices given, or at a more conservative value (closer to the stop). There is no expiry to this type of signal. We might adjust them if the entry is not met. This rarely happens.

The entry prices are the anticipated endpoints of the existing trend; in the cases of USD/JPY and USD/CHF the existing trends are both downtrends. We are placing the entry price at what we calculate to be the end of the downtrend - actually the reversal point of the downtrend into a new uptrend.

Sometimes we issue a trade signal (experimental) when the price is already at or close to the price we expect it to reverse. On other occasions we issue the signal ahead of time, sometimes several days ahead of time.

Itme,


Okay. I understand. This is not an immediate buy signal but more of a "Get ready..get set..." type. If I were to put in a buy limit order with 1.2050 as the price...then it would trigger on your "Signal" price.

Lyle

Could you please post your performance since inception?

thx

Itme,

all clear and correct now, my only point was that you probably moved some decimal places in your original post, that why it was throwing me off. See closer my post 1908.

Looks like it is corrected now.

Krkvak

Yes, Krkvak, it was a long, hard night, but fun nevertheless. All that movement with no reason for it!

Actually, maybe comments by a Chinese government official may have triggered this rise in the non-USD currencies. But why would the Chinese have released this information at a time of low volumes that would obviously trigger an exagerated reaction? Perhaps it was some kind of damage control.

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Could you please make an exception and post this chart? I am trying to figure out where you have the "downward wave 4". I have tried to see how you come up with this downward wave 4, that "could come down as far as 1.8050" but cannot figure it out. I am sure you have your reasons for the above. Thanks

I have been wondering about this 500+ pip move with no retracement. It would seem to me that some retracement, even minor, would be in order. There have only been 2 periods of consolidation without retracement. I have no doubt of the ability of this pair to hit .9500 or more, but without some degree of retracement, it seems unlikely, and in fact already overdue.

I find it interesting that you are seeing an upcoming drop, actually quite a bit more than a retracement for the recent move. The recent high has been 1.9349. Since this is only 11 pips from the point where you believe a turnaround will occur, I wonder whether the lower highs we have seen during the last 2 hours of the trading week represents the beginning of this downward move. I unfortunately know very little about Elliott Waves, certainly nothing beyond the basics.

+1

I'll put a chart of GBP/USD together when I can, but unfortunately I won't be able to for a day or two. Look around on the web. They are here and there by experienced elliotticians.

Yes, we may have reached an ultimate high, or we may go a bit higher, or we could go alot higher. I need to revisit the situation with a fresh mind to come up with an opinion based on what the market has done over the past two days. Until I reassess, my previous analysis stands. Nothing that has transpired since then changes it. But a prediction in this case is not reliable. The best thing will be to watch carefully and wait until clarity emerges at some point, and hold off acting until the dust settles and relatively clear awareness of the reality emerges.

EUR/CAD update for Monday November 27 at 5:30 ET

EUR/CAD fell 92 pips to 1.4797 then rose 103 pips to a new high of 1.4908. That makes a 1-2-3. It has since fallen to 1.4842. The top of Wave 3 at 1.4908 could have been a trade, but the risk would have been too great relative to the potential reward, since it is probably a corrective wave 4.

If EUR/CAD rises to a new high or a triple top, at between 1.4900 and 1.4960, as we suspect it will, then we would have a high probability, low risk : high reward trade opportunity.

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<hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Previous updates:

EUR/CAD update for Friday November 24 at 9:30 ET

Friday November 24 at 9:30 ET

EUR/CAD did as expected, forming an A-B-C corrective pattern down and then continuing with an extended third wave up to the high of 1.4889, a rise of 134 pips from the bottom of the corrective wave. The price moved 8 pips past our high probability reversal target.

EUR/CAD is either complete on its upwards trend, or is now engaged in a wave 4 correction, after which it will rise again to finish this last and final Fifth Wave of an even larger FIFTH WAVE, at which point we will generate a sell trade signal. The price at that point will be about 1.4900

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EUR/CAD update for Wednesday November 22 at 20:00 ET <hr style="color: rgb(209, 209, 225);" size="1"> EUR/CAD did reverse at the re-entry opportunity short price given earlier today and descended 60 pips to the bottom of the five day consolidation channel. In doing so it formed either an A-B-C or 1-2-3 wave pattern. The conservative trader would have exited at this point with 50 pips of profit and waited to see if there would be one more big move upwards before the reversal of the trend.

Those with a bullish bias could have re-entered a buy trade at 1.4680 , the bottom boundary of the consolidation channel, to trade back up to the top of the consolidation range, or even above.

In fact, the price of EUR/CAD moved up strongly this morning, pulled by the strong rise in EUR/USD, and broke through the top of the consolidation range, which means that another impulse wave is occuring upwards, and went up to a recent high of 1.4783. The rise was 103 pips.

The pattern formed is a 1-2-3 pattern of a 1-2-3-4-5 impulse wave set. An A-B-C corrective wave is now underway, to be followed by a fifth wave. Another alternative interpretation is that there will be an extended third wave, in which case we will see the continuation of Wave 3 after the corrective wave is complete. This is my preferred hypothesis.

The next good trade opportunity will be at the top of the fifth wave, trading downwards.

Monday November 27 at 6:15 ET

Exit Trade Signal #251 Buy EUR/JPY at 152.31

EUR/JPY retraced as predicted from its interim high of 151.70 (actual interim high was 151.72) and retraced 52 pips, forming an A-B-C wave pattern, to 151.20. This would have been a good re-entry price, at the bottom of Wave 4. The price then rose to 152.47 recently, in an extended Wave 5. The current price is 152.31. Assuming a re-entry at the correct price of 151.20, and exit at the present price of 152.31, the profit from the second portion of this trade is 108 pips.

The cumulative reward : risk ratio for this two part trade, including augmentation due to strategic Wave 4 exit / re-entry, is about 7.3 to 1.

The future will probably consist of a sizable downwards fourth wave of the extended third wave, followed by an upwards fifth wave of the Third Wave and then a larger Fourth Wave and then a final Fifth Wave carrying the price up to about 155.00. The impulse fifth wave up will be the next low risk : high reward trade opportunity.
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Previous trade signals:

Interim exit Trade Signal #251 Buy EUR/JPY at 151.70 pending Wave 4 down <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Friday November 24 at 7:00 ET

Exit the following EUR/JPY long trade at 151.70 to take 111 pips of profit and re-enter following a large A-B-C corrective wave.
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Trade Signal #251 Buy EUR/JPY at 150.56 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --><!-- message --> Thursday November 23 at 6:30 ET

We did a wrong wave count before on EUR/JPY, but won the trade nonetheless. EUR/JPY rose in a clear five wave set to 151.66, within the range which we expected it to reach. We had temporarily exited the short trade to wait for it to reach the top. We failed to issue a re-entry signal because we were distracted, but for those who recognised the top at 151.66 and took the short position, we believe the bottom of the trend has just been reached at 150.56, 110 pips lower.

It is now possible to enter a buy position at this price of 150.56, with a target of 151.75 or higher. The stop is at 150.19, making the risk 41 pips, and the minimum reward 115 pips. That makes the reward : risk ratio only 2.8, which is not sufficient to comply with our standard for live trades. But for research purposes we will label this Trade Signal #251 Buy EUR/JPY at 150.56

p.s. the lowest price reached was 150.32, 13 pips above the stop.
The latest high is 151.47 as of November 24 at 4:00 ET

Monday November 27 at 7:15 ET

As originally predicted, AUD/USD rose to .7815 today, and shows signs of rising one more time after completing an A-B-C corrective wave pattern to an ultimate high of about .7850. This would be a good short opportunity.
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Previous analysis of AUD/USD:

AUD/USD analysis for Thursday November 23 at 10:45 ET <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Thursday November 23 at 10:45 ET

My most recent analysis of AUD/USD confirms my previous analysis. AUD/USD is heading up to an ultimate high of .7780 to .7800

It was incorrect for us to have exited our long AUD/USD trade at .7736 to make only 46 pips of profit. We sacrificed at least 44 pips of profit, and halved the rate of return on our trade by doing so. We were obviously not of a normal state of mind when we entered our trades yesterday.

p.s. - as of November 24 at 4:30 ET AUD/USD has risen to an interim high of .7776, and has only formed a 1-2-3 wave pattern of an expected 1-2-3-4-5 impulse wave pattern. The most recent prediction for an ultimate high is .7794

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Re-enter Trade Signal #244 Buy AUD/USD at .7686 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --><!-- message --> 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.

EUR/CAD update for Monday November 27 at 7:15 ET

EUR/CAD completed a brief and spiky 93 pip downwards Wave 4 down to 1.4796 from its previous high of 1.4889, which we counted as the top of an extended Wave 3, and then rose 120 pips to a recent high of 149.08, slightly past our target for the ultimate high of 149.00.

But the wave pattern still does not yet resemble a complete 1-2-3-4-5 Wave 5 pattern. EUR/CAD is therefore likely to rise a final time to about 1.4950 after falling in an A-B-C corrective wave to about 1.4800. If it does this, then this will be a good short trade opportunity.
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Previous update:

EUR/CAD update for Friday November 24 at 9:30 ET <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Friday November 24 at 9:30 ET

EUR/CAD did as expected, forming an A-B-C corrective pattern down and then continuing with an extended third wave up to the high of 1.4889, a rise of 134 pips from the bottom of the corrective wave. The price moved 8 pips past our high probability reversal target.

EUR/CAD is either complete on its upwards trend, or is now engaged in a wave 4 correction, after which it will rise again to finish this last and final Fifth Wave of an even larger FIFTH WAVE, at which point we will generate a sell trade signal. The price at that point will be about 1.4900

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EUR/CAD update for Wednesday November 22 at 20:00 ET <hr style="color: rgb(209, 209, 225);" size="1"> EUR/CAD did reverse at the re-entry opportunity short price given earlier today and descended 60 pips to the bottom of the five day consolidation channel. In doing so it formed either an A-B-C or 1-2-3 wave pattern. The conservative trader would have exited at this point with 50 pips of profit and waited to see if there would be one more big move upwards before the reversal of the trend.

Those with a bullish bias could have re-entered a buy trade at 1.4680 , the bottom boundary of the consolidation channel, to trade back up to the top of the consolidation range, or even above.

In fact, the price of EUR/CAD moved up strongly this morning, pulled by the strong rise in EUR/USD, and broke through the top of the consolidation range, which means that another impulse wave is occuring upwards, and went up to a recent high of 1.4783. The rise was 103 pips.

The pattern formed is a 1-2-3 pattern of a 1-2-3-4-5 impulse wave set. An A-B-C corrective wave is now underway, to be followed by a fifth wave. Another alternative interpretation is that there will be an extended third wave, in which case we will see the continuation of Wave 3 after the corrective wave is complete. This is my preferred hypothesis.

The next good trade opportunity will be at the top of the fifth wave, trading downwards.