High Risk/Low Reward Ratio Trading System 108 replies
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Low Risk, High Reward Trading Experiment
Quoting WallboroffDislikedhi itme, do you think we could see another down move for the gbp/usd? i know we are in the fith wave upwards. in this fith wave, a smaller wave 1 has astablished with a a-b-c corrective zigzag. so far so good, but, i have price projection of 1.9503 with trendlines.
any idea?Ignored
Quoting itmeDislikedYes, you are absolutely right, Wallboroff. Wave 2 is an a-b-c, not a 1-2-3-4-5, so in case we experienced a 1-2-3-4-5 (which is what it generally looks like) instead of an a-b-c (which is also also possible, and how I saw it yesterday) then we are due for a "c" wave down now before the third wave up begins. The "c" wave is a 1-2-3-4-5 structured wave.
Therefore,
Exit Trade Experiment #293 Buy GBP/USD at 1.9584 at the market price of 1.9642 (taking a 54 pip profit) and re-enter at about 1.9520 to 1.9555 - or at the bottom of a downwards small five wave pattern.
_____________________________________________________________________________________________________________________________________
Previous trade experiment:
Thursday December 21 at 8:45 ET
Trade Experiment #293 Buy GBP/USD at 1.9584
Stop is 1.9548
Target is 1.9900
Risk is 40 pips
Reward is 312 pips
Reward : Risk ratio is 7.8 to 1
For research purposes only.
We are trading the Fifth Wave of GBP/USD up. The entry price is a very precise, highly confirmed, high probability reversal value from the Q system. The Elliott Wave count is fairly clear, and represents the bottom of an a-b-c corrective wave (wave 2 ) of what we think is a new impulse wave (Wave 5 of WAVE 3 of an extended Third Wave ) upwards. This large Wave 5 follows a large A-B-C corrective wave down (Wave 4 ) . In our second to last trade experiment we narrowly missed winning our long trade entering at the bottom of wave 1 of Wave 5 upwards by entering the trade a little too early as discussed above. We entered the short trade at the top of wave 1 yesterday at the correct price, but chickened out because we weren't convinced that the ultimate top had been reached, when in fact the evidence was clear and strong. Perhaps we got skittish from having entered prematurely on the previous trade.
p.s. - When we counted the Elliott Wave on the last small (fifth) wave down on the one minute chart we didn't take too much care. It turned out that it had only completed a 1-2-3 when we entered out trade. It subsequently went 4-5 and fell to 1.9557, missing our stop by 9 pips. We expect it not to go any further down, but the stop is in some jeopardy right now and could be adjusted slightly downwards.
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Previous trade experiment:
Wednesday December 20 at 5:15 ET
Exit Trade Experiment #292 Sell GBP/USD at 1.9693 to capture a small profit and re-enter at approximately 1.9760 to 1.9780
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Tuesday December 19 at 19:45 ET
Trade Experiment #292 Sell GBP/USD at 1.9726
Stop is 1.9771
Target is 1.9400
Risk is 49 pips
Reward is 322 pips
Reward : Risk ratio is 6.6 to 1
We are trading the "C" wave down.
p.s. - According to my micro-Elliott Wave analysis and Q analysis, 1.9737 is the precise top of this trend. The current price is 1.9735.
p.p.s - the ultimate high for this trend was actually 1.9746, 25 pips from our stop. The downwards interim limit of this downtrend was 1.9558, which would have allowed 164 pips of profit, if I hadn't bailed out of this trade due to being too finicky about the precise pattern on the one minute chart. The wave patterns on the one minute chart are very difficult to accurately interpret, and shouldn't be over-emphasised when everything else is in good order.Ignored
<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the difference in value between imported and exported goods and services. A positive Trade Balance indicates that more goods and services were exported than imported over a given period. A rising trend has a positive effect on the nation's currency. When higher levels of exports are sold to the world, demand for the nation's currency is elevated as foreigners convert their native currency to purchase the exports. The Trade Balance also has a sizable impact on GDP because high demand for exports creates increased employment and production, as domestic factories work to fill this demand.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation's currency.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation's currency.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the value of sales at the retail level. A rising trend has a positive effect on the nation's currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>
Underlying sales should be firm
</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation's currency.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
The Gross Domestic Product (GDP) Deflator measures the annualized quarterly implied rate of inflation for all economic activity. The deflator is used to calculate the difference between nominal and real GDP. The Federal Reserve takes special note of this indicator because it is the economy's broadest measure of inflation.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the number of individuals who filed for unemployment insurance for the first time over the past week. A falling trend has a positive effect on the nation's currency. Working people tend to spend more, and consumer spending is a major driver of the economy. However, unemployment usually draws little attention because traders view it as a lagging indicator.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures overall economic health by combining ten leading indicators including average weekly hours, new orders, consumer expectations, housing permits, stock prices, and interest rate spreads. The index is published monthly by The Conference Board, a leading private US research group, but traders tend to pay little attention because the components that make up the index are reported at an earlier date.
</fieldset>
Quoting ia4xDislikedHello all. I am new to elliot wave theory. I have a lot of time to give to learn the theory and have a fair understanding on how the market works.
But I am having trouble finding detailed documents and learning the theory from head to toe.
ITME, if you have the resources I would be very glad if your able to send me any info where I can master (hopfully) this meathod/theory.
Thanks alot to everyone who contributes to this thread. You all are a great help by asking questions.
And a special thanks to you ITME.
Sincerely: IA4x
Anyone can also send me info at my email @ [font=Georgia][email protected][/font] THANKS GUYS!Ignored
<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
The Bank of Japan (BOJ) Meeting Minutes are a verbatim record of the bank's meeting held about one month earlier. The minutes give traders insight into the latest interest rate decision and policy shifts.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the monthly rate of inflation for imported goods.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the total amount spent by consumers on goods and services. A rising trend has a positive effect on the nation's currency because consumer spending is a major driver of the economy, accounting for about two-thirds of GDP.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the quarterly difference in value between imported and exported goods, services, income flows, and unilateral transfers. A rising trend has a positive effect on the nation's currency. The Current Account is a comprehensive accounting of the nation's trade with other countries. It includes the previously reported Trade Balance (which covers trade of goods and services), so traders focus on the income flows and unilateral transfer portions of the report.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the gross value added (GVA) of all service sectors. GVA is the difference between the value of a service provided (output), and the value of the goods and services used up in providing that service (intermediate consumption).
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the total value of new purchase orders placed with domestic manufacturers for hard goods with a life expectancy of more than 3 years, such as automobiles, computers, appliances, and airplanes. A rising trend has a positive effect on the nation's currency because an increased level of purchase orders signals that manufacturers will be busy in the months to come as they work to fill the orders. Traders watch this indicator closely because of it's predictive abilities.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>
Recent capital spending data has been disappointing
</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>Derivative of Durable Goods Orders that excludes the Transportation components. Orders for aircraft occur in periodic burst and can severely distort the underlying trend, so traders tend to focus more on this indicator than the overall Durable Goods Orders.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the total amount spent by consumers on goods and services. A rising trend has a positive effect on the nation's currency because consumer spending is a major driver of the economy, accounting for about two-thirds of GDP.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the total amount of income received by individuals. A rising trend has a positive effect on the nation's currency because higher levels of income allow consumers to spend more.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
The Personal Consumption Expenditures (PCE) Price Index measures the rate of inflation experienced by consumers when purchasing goods and services. Like CPI, it reflects the price change in consumer goods and services. PCE differs slightly from CPI in that it only measures goods and services targeted towards and consumed by individuals. Traders watch the PCE Price Index closely because it's the Federal Reserve's preferred consumer inflation indicator.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>
The Fed watches the core rate closely.
</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>Derivative of the PCE Price Index that excludes the Food and Energy items. Food and Energy account for roughly 25% of PCE, but they can be very volatile from month to month and can distort the overal picture. PCE with the exclusion of these volatile components is thought to be a better indicator of the underlying inflation trend.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the difference in value between imported and exported goods and services. A positive Trade Balance indicates that more goods and services were exported than imported over a given period. A rising trend has a positive effect on the nation's currency. When higher levels of exports are sold to the world, demand for the nation's currency is elevated as foreigners convert their native currency to purchase the exports. The Trade Balance also has a sizable impact on GDP because high demand for exports creates increased employment and production, as domestic factories work to fill this demand.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation's currency.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation's currency.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>
Measures the value of sales at the retail level. A rising trend has a positive effect on the nation's currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.
</fieldset><fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>
Underlying sales should be firm
</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.
</fieldset>Quoting itmeDislikedFriday December 22 at 20:30 ET
Given the lateness of the hour, the day (Friday), the closeness to our first target, and the wave pattern, we feel it is better to exit this trade 3 pips prematurely to book 118 pips of profit. The price will probably fall to 1.9543, but there is a chance that it won't. We would rather deal in near certainties than probabilities.
To be safe, exit Trade Experiment #296 Sell GBP/USD at 1.9680 at 1.9558.
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Friday December 22 at 5:00 ET
Trade Experiment #296 Sell GBP/USD at 1.9680
Stop is 1.9716
Target #1 is 1.9555
Target #2 is 1.9500
Risk is 40 pips
Reward is 121 / 176 pips
Reward : Risk ratio is 3.0 / 4.4 to 1
For research purposes only.
Our wave hypothesis is that this is wave "C" of a downwards wave 2.
The upwards "B" wave on GBP/USD may have gone up more than it otherwise might have due to the very poor Fed Manufacturing Index and somewhat disappointing US GDP data yesterday at 12:00 pm.Ignored
