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Low Risk, High Reward Trading Experiment

  • #1,941
  • Nov 28, 2006 3:44am Nov 28, 2006 3:44am
I used fibonnaci planetary alignment voodoo based on the Mayan calendar. SeekingLight cheated, he looked at the 1 day chart apparently.
  • #1,942
  • Edited 4:39am Nov 28, 2006 4:16am | Edited 4:39am
Tuesday November 28 at 4:00 ET

Trade Signal #258 Sell GBP/CHF at 2.3453

 Stop is 2.3486

 Target is 2.3300 to 2.3265

 Risk is 45 pips

Reward is minimum 141 pips

Reward : risk ratio is minimum 3.1 to 1

For research purposes only.

Due to a substandard RRR, this trade is not system-compliant; it is simply an experiment. We are trading the fifth wave of the Fifth Wave of GBP/CHF down to the very bottom of this trend, which if it reaches our first target of 2.3300, will have travelled a total of 564 pips down.
  • #1,943
  • Nov 28, 2006 5:15am Nov 28, 2006 5:15am
Tuesday November 28 at 6:00 ET

Trade Signal #259 Sell CHF/JPY at 96.44

Stop is 96.77

Target is 92.50

Risk is 41 pips

Reward is 386 pips

Reward : Risk ratio is 9.4 to 1

For research purposes only.
  • #1,944
  • Edited 5:42am Nov 28, 2006 5:32am | Edited 5:42am
Tuesday November 28 at 6:30 ET

Exit Trade Signal #228B Buy CAD/JPY at 102.96

A re-evaluation of the wave count on this trade indicates that we may be trading a corrective wave. Our Q system gives 102.96 as a high probability reversal point.

The conservative strategy is thus to exit here at 102.96, collect 132 pips of profit (the effective RRR is 3.0. ), and wait for the price to fall to about 101.40 where we can re-enter a long trade with the larger trend.

_____________________________________________________________
_____________________________________________________________

Previous comments and trade signal:

Re-enter CAD/JPY long trade at 101.64 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message -->

Thursday November 23 at 1:15 ET

CAD/JPY continued to fall after we entered our buy trade yesterday. ( Trade Signal #228A Buy CAD/JPY at 102.97 ). We were Elliott Wave blind yesterday it seems - very poor at evaluating the wave counts. ) The price subsequently fell to 101.61 this afternoon.

Various aspects of our system lead us to believe that the price of 101.61 is the bottom of the trend 456 pip downtrend that began on October 9.

Trade Signal #228B Buy CAD/JPY at 101.64
The stop is 101.29
Target #1 is 106.10

Target #2 is 106.70
Risk is 45 pips
Reward is 436 / 496 pips
Reward : Risk Ratio is 9.7 / 11.0

For research purposes only.
 __________________________________________________ _______
__________________________________________________ _______
Adjust stop Trade Signal #228A Buy CAD/JPY at 102.97 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --><!-- message --> Wednesday November 22 at 6:45 ET

The most likely reversal point for CAD/JPY is 102.36. Therefore the stop on our long trade should be adjusted to 101.98

For those not long CAD/JPY already, 102.36 is a low risk / high reward trade opportunity (risk is 48 pips), with far off targets:

Target #1 is 106.10
Target #2 is 106.70

__________________________________________________ ______
Friday November 17 at 20:00 ET

When we entered a buy trade on CAD/JPY the conditions looked favorable. However, it turned out that the wave count was incorrect, since there seems to be an extended five wave set downwards connected to the big move in the market this morning. The next cluster of high probability reversal points is at 102.35 to 103.45. The recent low is 103.52, slightly short of our stop at 103.48. This means that we will need to adjust the stop to 102.19
  • #1,945
  • Nov 28, 2006 5:50am Nov 28, 2006 5:50am
Tuesday November 28 at 6:45 ET

Trade Signal #260 Sell CAD/JPY at 103.00

Stop is 103.31

Target is 101.40

Risk is 41 pips

Reward is 150 pips

Reward : Risk ratio is 3.6 to 1

For research purposes only.

The price may not rise again to reach our entry price on this trade. Furthermore, the RRR is less than 5.0 to 1. This trade is simply an experiment to test our theory and to practise our skills in implementing it.
  • #1,946
  • Nov 28, 2006 12:18pm Nov 28, 2006 12:18pm
Quoting itme
I expect GBP/USD to descend from the current price of 1.9395 to about 1.9300 to finish its current consolidation before it rises one more time to a higher high, before a more substantial correction downwards.

p.s. - GBP/USD has just risen to 1.9453, and shows signs of reversing at about 1.9463. It isn't clear whether this is an extended B wave of a downwards consolidation, or a new impulse wave. We had better wait and see. There may be a viable trade at the top of this move, whatever it is. We will have to make an assumption about the status of this wave, and perform our calculations accordingly.
Can a wave b have the velocity that this pair is showing? Is this not past the point of an extended b already?
  • #1,947
  • Nov 28, 2006 12:49pm Nov 28, 2006 12:49pm
The first try to do a wave count. Any comments ? Positive or negative, I can take it ! I can already tell by some previous comments that I'm off, but still, please kick me in the right direction if you can.

Thanks
Attached File(s)
File Type: zip gdbusd_idea.zip   25 KB | 234 downloads
  • #1,948
  • Nov 28, 2006 12:58pm Nov 28, 2006 12:58pm
Itme,

If you look at the 1 Day 10 Year "Candle Chart" at the Wave 5 top you will see the High was 1.3666 on 12/30/04, and with the corrective A Wave the Low was 1.2730 on 2/8/05.

If you subtract the low from the high you will come up with 936 pips difference, divide that by two and you have the middle of the High/Low which is 468 pis. Add that to the Low - or subtract if from the high - and you will come up with the price of 1.3198 for the center of the High/Low. We just hit that mark in the past 15 minutes.

Would you consider this in any of your studying?

Monarch
  • #1,949
  • Nov 28, 2006 1:04pm Nov 28, 2006 1:04pm
Quoting krkvak
The first try to do a wave count. Any comments ? Positive or negative, I can take it ! I can already tell by some previous comments that I'm off, but still, please kick me in the right direction if you can.

Thanks
I am on your side
  • #1,950
  • Nov 28, 2006 1:15pm Nov 28, 2006 1:15pm
itme,

As per my last question of finding the center of the Currency Pairs, I also examined the EUR/USD 1 Month 30 Year Chart and came up with the following:

The High was 10/31/1978 @ 1.8924
The Low was 2/28/1995 @ .7155

Difference of 1.1769 pips
Divided by two = .5884 pips

Add .5884 to the Low price = 1.2739

We were just at this junction on November 6th, 2006.

Could we be possibly be heading for a long run up by looking at the long range charts?

Monarch
  • #1,951
  • Nov 28, 2006 1:18pm Nov 28, 2006 1:18pm
i have a question about your count. see attached pic
Attached Image
  • #1,952
  • Edited 2:59pm Nov 28, 2006 2:47pm | Edited 2:59pm
clam61,

my idea for not considering that drop you point out is that it seems a too little of a move for a corrective wave. It looks like a complex A correction, then there is a fairly simple B and complex C again. Also if we would say that the wave C ended on Nov 17, what would be the count after that ? It probably cannot be 1-2-3-4, simply because 2 retraces more than 100% of 1 and 4 touches the price of 1. Just an idea. Looking forward the responses.

Do you propose an alternative count ? Can you post it ? Can anybody else post theirs ?

An finaly, be aware that I started reading about EW a week ago, so I can be totaly wrong, but your and others input helps me learn. Thank you for that !

Krkvak.

Quoting clam61
i have a question about your count. see attached pic
  • #1,953
  • Nov 28, 2006 3:20pm Nov 28, 2006 3:20pm
well i guess im just trying question the validity of EW.

your statement in red is a correct logical argument, based on the postulate that EW is a valid theory. you are assuming EW exists, and therefore this must be a correct wavecount because it is the only wavecount that will satisfy EW rules.

but from the standpoint of a person who does not necessarily trust EW (yet), the statement in red says nothing. it seems that this might be an example of MAKING the waves fit the count, to fit this theory. to a person who does not subscribe to EW, the subjectivity in the drop point being "too little" (which is very subjective) is troubling.

im not saying i dont believe EW is valid...i actually feel that there is something definitely behind it. ok im rambling now.

sorry itme if these posts interrupt your journal

Quoting krkvak
clam61,

my idea for not considering that drop you point out is that it seems a too little of a move for a corrective wave. It looks like a complex A correction, then there is a fairly simple B and complex C again. Also if we would say that the wave C ended on Nov 17, what would be the count after that ? It probably cannot be 1-2-3-4, simply because 2 retraces more than 100% of 1 and 4 touches the price of 1. Just an idea. Looking forward the responses.

Do you propose an alternative count ? Can you post it ? Can anybody else post theirs ?

An finaly, be aware that I started reading about EW a week ago, so I can be totaly wrong, but your and others input helps me learn. Thank you for that !

Krkvak.
  • #1,954
  • Nov 28, 2006 3:34pm Nov 28, 2006 3:34pm
Quoting clam61
well i guess im just trying question the validity of EW.

your statement in red is a correct logical argument, based on the postulate that EW is a valid theory. you are assuming EW exists, and therefore this must be a correct wavecount because it is the only wavecount that will satisfy EW rules.

but from the standpoint of a person who does not necessarily trust EW (yet), the statement in red says nothing. it seems that this might be an example of MAKING the waves fit the count, to fit this theory. to a person who does not subscribe to EW, the subjectivity in the drop point being "too little" (which is very subjective) is troubling.

im not saying i dont believe EW is valid...i actually feel that there is something definitely behind it. ok im rambling now.

sorry itme if these posts interrupt your journal
Trust your eyes and enjoy the profits.
  • #1,955
  • Nov 28, 2006 3:38pm Nov 28, 2006 3:38pm
unless your a genius like itme, dont people's eyes fool them a lot?

it seems the safest way would be to only trade one wave out of a sequence. this way there is less probability to have incorrect wave counts.

Quoting wwwin
Trust your eyes and enjoy the profits
  • #1,956
  • Nov 28, 2006 3:42pm Nov 28, 2006 3:42pm
Quoting clam61
unless your a genius like itme, dont people's eyes fool them a lot?

it seems the safest way would be to only trade one wave out of a sequence. this way there is less probability to have incorrect wave counts.
A tsunami has been underway since Thursday, I don't know what else you need to see. It is never gonna get any clearer than what happened since Thursday. Look at the steepness of the angle, at the velocity, if this is not an impulse wave than they don't exist.
  • #1,957
  • Nov 28, 2006 3:43pm Nov 28, 2006 3:43pm
Quoting itme
Tuesday November 28 at 4:00 ET

Trade Signal #257 Sell GBP/JPY at 226.06

 Stop is 226.51

 Target is 224.00

Risk is 54 pips

Reward is minimum 197 pips

Reward : risk ratio is 3.6 to 1

For research purposes only.

This is not a system compliant trade because the R:R ratio is too small. But it is a good experiment to learn from. We are trading a Wave 4 down, following what we believe is a completed extended Third Wave.
well, i got kicked out of this trade as soon GBP-JPY touched the SL (and kept rising a few more pips).
do you still consider to take the same trade @ 226.70 area, or maybe we must accept it as a bad signal?
  • #1,958
  • Nov 28, 2006 4:06pm Nov 28, 2006 4:06pm
i didnt say it wasnt an impulse wave.

nevermind...

Quoting wwwin
A tsunami has been underway since Thursday, I don't know what else you need to see. It is never gonna get any clearer than what happened since Thursday. Look at the steepness of the angle, at the velocity, if this is not an impulse wave than they don't exist.
  • #1,959
  • Nov 28, 2006 4:13pm Nov 28, 2006 4:13pm
Quoting clam61
i didnt say it wasnt an impulse wave.

nevermind...
Clam, did you get in Friday morning when I posted this
http://members.aol.com/f8222/gbpusd11-24-06.jpg
on the other thread??? That is what I mean, enjoy this ride if you got in then. Hopefully you did.
  • #1,960
  • Nov 28, 2006 4:18pm Nov 28, 2006 4:18pm
"im not saying i dont believe EW is valid...i actually feel that there is something definitely behind it."


Elliott built his concepts and theories upon the work of Charles Dow, who was the original architect of the wave theory. Charles determined that the markets do move in a wave pattern, and Elliott built upon it to explain why and predict future movement. These are sound theories that have been used and respected in financial markets since the early 1900's.

Any discrepency in price action Vs. current wave theory is not the fault of the theory; just as if a Ford Bronco rear ends me, it's not the fault of the Bronco, but of the person driving the Bronco; either in driving performance or maintenance upkeep on the vehicle.

Anyone wanting to understand what Elliott saw in market movement would do well to understand the founding principles that Dow laid out; as many ideas stem from his original concepts.

BTW, this was only in response to the bolded comment, not the thread in general.....
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