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Low Risk, High Reward Trading Experiment

  • #2,561
  • Jan 9, 2007 1:54am Jan 9, 2007 1:54am
Tuesday January 9 at 2:45 ET

Exit Trade Experiment #303D Buy GBP/USD at 1.9282 at 1.9450 if not already exited to accept 264 pips of profit

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Previous trade experiment:

Monday January 8 at 9:00 ET
Trade Experiment #303D Buy GBP/USD at 1.9282
Stop is 1.9258
Target is 1.9350
Risk is 28 pips
Reward is 64 pips
Reward / Risk Ratio is 2.3
 Confidence level: good
Accuracy: good
Reward / Risk Ratio : poor

For research purposes only.

This is an attempt to trade an upwards wave c of an upwards Wave 4 of the very strong downtrend.
Alternatively, it could be the beginning of a wave 3 upwards of the first wave of a final large Wave 5 leading to a new high.

p.s. - GBP/USD hit 1.9371 at 10:10 ET on January 8 to complete a successfull experiment
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Previous trade signal:

Monday January 5 at 3:30 ET

Exit Experiment #303C Buy GBP/USD at 1.9342

This is the apparent top of an upwards mini-wave. If it is the first wave of a new large Wave 3, then it will probaby retrace considerably before it resumes its upwards travel. If it is the Wave A of a Wave 4 correction, then it will also correct downwards a considerable amount. Since the wave count is now uncertain, it is prudent to take 51 pips of profit and see how the patterns unfold.
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Previous Trade Experiment:

Friday January 5 at 9:00 ET
Trade Experiment #303C Buy GBP/USD at 1.9286
Stop is 1.9239
Target is 1.9735
Risk is 51 pips
Reward is 445 pips
Reward / Risk Ratio is 8.7

 Confidence level: good
Accuracy: good
Reward / Risk Ratio : excellent

For research purposes only.

This is an attempt to trade an upwards wave 1 of an upwards Wave 5 of the very large uptrend.
  • #2,562
  • Edited 2:18am Jan 9, 2007 2:00am | Edited 2:18am
Tuesday January 9 at 2:45 ET

Trade Experiment #307 Sell GBP/USD at 1.9450

Stop is 1.9481

Target is 1.9250

Risk is 35 pips

Reward is 196 pips

Reward / Risk Ratio is 5.6

Confidence level: good
Accuracy: good
Reward / Risk Ratio : good

For research purposes only.

This is an attempt to trade a downwards wave 5 of a very strong downtrend.
Alternatively, it could be the wave 4 of a Wave 1 of a new uptrend.

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Tuesday January 9 at 2:45 ET

Exit Trade Experiment #303D Buy GBP/USD at 1.9282 at 1.9450 if not already exited to accept 264 pips of profit

______________________________________________________
______________________________________________________

Previous trade experiment:

Monday January 8 at 9:00 ET
Trade Experiment #303D Buy GBP/USD at 1.9282
Stop is 1.9258
Target is 1.9350
Risk is 28 pips
Reward is 64 pips
Reward / Risk Ratio is 2.3
 Confidence level: good
Accuracy: good
Reward / Risk Ratio : poor

For research purposes only.

This is an attempt to trade an upwards wave c of an upwards Wave 4 of the very strong downtrend.
Alternatively, it could be the beginning of a wave 3 upwards of the first wave of a final large Wave 5 leading to a new high.
  • #2,563
  • Jan 9, 2007 2:46am Jan 9, 2007 2:46am
Quoting itme
Monday January 8 at 20:15 ET

Trade Experiment #307A Sell GBP/JPY at 231.00

Stop is 231.41

Target is 228.00

Risk is 50 pips

Reward is 291 pips

Reward / Risk Ratio is 5.8 : 1

Confidence level: good
Accuracy: good
Reward / Risk Ratio : good

For research purposes only.

This is an attempt to enter at the top of the A wave of the fourth wave and trade the B wave down.

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Previous trade experiment (stopped out):

Correction - the correct entry price is 229.85, not 229.75. Sorry.

Also - Adjust stop up to 230.35

Monday January 8 at 1:00 ET

Trade Experiment #307 Sell GBP/JPY at 229.85

Stop is 230.14

Target is 228.00

Risk is 38 pips

Reward is 176 pips

Reward / Risk Ratio is 4.6 : 1

Confidence level: good
Accuracy: good
Reward / Risk Ratio : fair

For research purposes only.

This is an attempt to enter at the top of the A wave of the fourth wave and trade the B wave down.

Adjust stop - the stop here for GBP/JPY is too small. this pair requires a larger stop due to its extreme volatility.

Adjust stop up to 230.35
Hi!

I bought GBPJPY yesterday at 230,32 (23:23cet). Target is 231,75. Stop now at 230,89.
If it breaks 231,75, it will be set to go to 233,83 again.

Marc.
  • #2,564
  • Jan 9, 2007 3:06am Jan 9, 2007 3:06am
Quoting marc
Hi!

I bought GBPJPY yesterday at 230,32 (23:23cet). Target is 231,75. Stop now at 230,89.
If it breaks 231,75, it will be set to go to 233,83 again.

Marc.
I think you have a better grasp on this pair, Marc. What logic are you applying to set your targets? My approach breaks down here, because it is adapted better to the majors, and always seems to get me into GBP/JPY too early!
  • #2,565
  • Jan 9, 2007 3:46am Jan 9, 2007 3:46am
Quoting itme
I think you have a better grasp on this pair, Marc. What logic are you applying to set your targets? My approach breaks down here, because it is adapted better to the majors, and always seems to get me into GBP/JPY too early!
Hi!

As you know, this is a crazy pair. If you get it when USDJPY and GBPUSD go up together, you get enough pips for the year.

Now, for instance, while above 230,89-68, we'll see it at 231,75 at least.

The logic is looking at TF4h.

I was late buying iy yesterday. The right price to buy it was at 229,93.

Marc
  • #2,566
  • Jan 9, 2007 4:30am Jan 9, 2007 4:30am
Itme - back on 6th Jan your original long trade for GBP/JPY was: enter long at 228.65, stop 228.24, target 231.45. Went down to almost 228 on 8 Jan so would have been stopped out - but the target was pretty spot on - latest high was at 231.55 (8:30 GMT) and looks like may be turning (whether for the long haul or not, remains to be seen - but still, this was an amazingly accurate projection of the top, even if just a minor swing high).
Trust your analysis!
  • #2,567
  • Jan 9, 2007 9:03am Jan 9, 2007 9:03am
Quoting marc
Hi!

As you know, this is a crazy pair. If you get it when USDJPY and GBPUSD go up together, you get enough pips for the year.

Now, for instance, while above 230,89-68, we'll see it at 231,75 at least.

The logic is looking at TF4h.

I was late buying iy yesterday. The right price to buy it was at 229,93.

Marc
Hi,

GBPJPY has made a high so far at 231,87.
Now is trading at 231,65.
While below 231,75, the risk is to the downside.

Marc
  • #2,568
  • Jan 9, 2007 9:10am Jan 9, 2007 9:10am
So that is a strong indacation for it to sell how low do you think?the next support on the 4hr?
Quoting marc
Hi,

GBPJPY has made a high so far at 231,87.
Now is trading at 231,65.
While below 231,75, the risk is to the downside.

Marc
  • #2,569
  • Jan 9, 2007 9:14am Jan 9, 2007 9:14am
and if it goes above 231.87-90 it will be a good sign to be bullish??for a while?
Quoting marc
Hi,

GBPJPY has made a high so far at 231,87.
Now is trading at 231,65.
While below 231,75, the risk is to the downside.

Marc
  • #2,570
  • Jan 9, 2007 10:11am Jan 9, 2007 10:11am
Quoting turn1to100
and if it goes above 231.87-90 it will be a good sign to be bullish??for a while?
Hi!!!

While above 230,89-68, I said we'd see 231,75 at least. Above that level and holding always above 230,68, we should go to last yearly highs.

Marc
  • #2,571
  • Jan 9, 2007 10:27am Jan 9, 2007 10:27am
Basically what you mean is that it should go up?Bullish and go no lower than 230,89-68.and try 2 stay above 231.75...the bullish should reach high of last year234.80??
Quoting marc
Hi!!!

While above 230,89-68, I said we'd see 231,75 at least. Above that level and holding always above 230,68, we should go to last yearly highs.

Marc
  • #2,572
  • Jan 9, 2007 11:07am Jan 9, 2007 11:07am
Quoting turn1to100
Basically what you mean is that it should go up?Bullish and go no lower than 230,89-68.and try 2 stay above 231.75...the bullish should reach high of last year234.80??
Hi!

Do not make it difficult.

As long as it holds above 230,68, the pair will hit this year's high. Of course, 231,75/231,92 is where it has stopped now. So, it should break those resistances first. Therefore, while below those, we could go down again.

Marc
  • #2,573
  • Jan 9, 2007 11:25am Jan 9, 2007 11:25am
Hi Marc,

Interesting to look at TF4HR, are you in agreement with itsme that this may be Wave B? Just wondered what your wave count was. Thanks.
  • #2,574
  • Edited 2:02pm Jan 9, 2007 1:46pm | Edited 2:02pm
Tuesday January 9 at 14:30 ET

The current price of GBP/CHF is 2.4083. This is a concessionary entry value.

We have been stopped out twice already trying to identify the top of the large (300 pips), fast GBP/CHF uptrend. It is evident now, based on the Elliott Wave count and other criteria, that 2.4102 was the top of this trend. Unfortunately we were not at the computer to recognise it at the time, but if we had been we would have issued a sell signal at 2.4100 based on our system criteria.

2.4100 is the top of a super extended Elliott Wave count, and the most probable reversal point on three different timeframes according to my targeting system. I should have realised this before and refrained from entering a trade before this value was met. Live and learn. When I identified what I believed was (and probably actually was) the top of the GBP/USD trend, then I assumed that it was also the top of the GBP/CHF and GBP/JPY trends. Often this correlation is true, but sometimes it isn't, so I must be carefull not to jump to invalid conclusions.

The price of GBP/CHF has subsequently fallen in a small 1-2-3 wave pattern and is currently rising in an a-b-c wave 4 pattern. After this comes a small wave 5 of the downwards Wave 1, then an upwards Wave 2 which is often able to carry the price back up to the top of the trend to form a second high.

For experimental testing purposes, we will assume we were able to record the short trade at the top of the trend, then we will exit at the bottom of we believe is Wave 1, then re-enter at the top of Wave 2 and hold our short trade until the bottom of Wave 3, which will be a long trade.

Trade Experiment #306B Sell GBP/CHF at 2.4100 / 2.4083

Stop is 2.4141

 Target is 2.3800

 Risk is 56 pips

Reward is 285 pips

Reward / Risk Ratio is 5.1 : 1

Confidence level: good
Accuracy: good
Reward / Risk Ratio : good

For research purposes only.

This is an attempt to enter at the top of the trend and trade the Wave 1 down.

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Previous trade experiments:

That being said, we try again, knowing that if we can be correct 50% of the time, due to our relatively high reward / risk ration, then we are "in the money", as they say.

Note that any trade with a reward : risk ratio of less than 5:1 is not, in our opinion, worth the risk, as there are plenty of superior trades available.

Tuesday January 9 at 2:00 ET
Trade Experiment #306A Sell GBP/CHF at 2.4032
Stop is 2.4061
Target is 2.3800
Risk is 44 pips
Reward is 217 pips
Reward / Risk Ratio is 4.8 : 1

Confidence level: fair
Accuracy: fair
Reward / Risk Ratio : good

For research purposes only.
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Previous trade experiment (stopped out):

Monday January 8 at 12:00 ET

Trade Experiment #306 Sell GBP/CHF at 2.3949
Stop is 2.4007
Target is 2.3800
Risk is 68 pips
Reward is 139 pips
Reward / Risk Ratio is 2.0 : 1

Confidence level: good
Accuracy: good
Reward / Risk Ratio : poor

For research purposes only.

This is an attempt to enter at the top of the c wave of the fourth wave and trade the 5th wave down.
  • #2,575
  • Jan 9, 2007 2:27pm Jan 9, 2007 2:27pm
Tuesday January 9 at 14:30 ET

I entered a short trade prematurely at 1.5320 on EUR/CAD rather foolishly at the top of wave 3 of the 1-2-3-4-5 Wave A of an upwards Wave 4. I should have waited for an evident wave 4 and wave 5 before entering the short trade. The price continued upwards to 1.5345, just 1 pip short of the stop - an extremely close call. The B wave down which we are trying to trade has progressed downwards in the a wave and up again in the b wave, then downwards again.

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Monday January 8 at 9:45 ET
Trade Experiment #300A Sell EUR/CAD at 1.5320
Stop is 1.5346
Target is 1.5250
Risk is 36 pips
Reward is 60 pips
Reward / Risk Ratio is 1.7 : 1

Confidence level: good
Accuracy: good
Reward / Risk Ratio : poor

For research purposes only.

This is an attempt to enter at the top of the a wave of the fourth wave and trade the b wave down - not a preferred wave configuration. Estimating the target is not reliable for this kind of trade with my current system.

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Previous successful trade experiment:

Adjust entry price for Trade Experiment #300 Sell EUR/CAD at 1.5510 <hr style="color: rgb(209, 209, 225);" size="1"> I just did a short term target analysis of EUR /CAD and found that the correct precise entry price according to our trading system is 1.5503, not 1.5510 as previously estimated. This price was recently met, so theoretically we should be in this short trade at the adjusted price.

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Tuesday January 2, 2006 at 5:45 ET

Trade Experiment #300 Sell EUR/CAD at 1.5510
Stop is 1.5561
Target is 1.5300
Risk is 51 pips
Reward is 200 pips
Reward / Risk Ratio is 4.0 : 1

Confidence level: fair
Accuracy: fair
Reward / Risk Ratio : fair

For research purposes only.

This is an attempt to enter at the top of the third wave and trade the fourth wave down - not a preferred wave configuration. Estimating the target is not reliable for this kind of trade with my current system.
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Previous comment:

No smart long trade on EUR/CAD (yet)
EUR/CAD Update for Monday December 18 at 20:00 ET
When things get this far along in a trend, my preference shifts to the short trade at the very, very end of the uptrend. I feel that probabilities of success decrease the further we get towards the end of a trend. So we don't expect to go long unless a very clear pattern emerges indicating the bottom of the downwards corrective wave we are now on and good trend reversal values are met.

Generally, my prediction is for a fall to about 1.5020 to 1.5040, then a rise to 1.5530 to 1.5740. 1.5690 is a possible reversal value. When the price reaches the very top, as evidenced by an Elliott Wave completion pattern and the intersection with high probability reversal values, we will have a good low risk / high probability short trade opportunity. We expect a Fifth Wave upwards, with the top of its internal third wave at 1.5530, and the top of its internal fifth wave at 1.5740.

The current price is 1.5145. We are in a short term corrective downwards fourth wave A-B-C of an upwards third wave of an upwards extended Third Wave according to our current wave hypothesis. Alternatively, we could be in a short term corrective downwards fourth wave A-B-C of an upwards first wave of an upwards B Wave.
  • #2,576
  • Jan 9, 2007 9:00pm Jan 9, 2007 9:00pm
WOW


I just noticed you got 200k + posts. Congrats itme

did you catch the ride down from 1.3200?

Dave
  • #2,577
  • Jan 10, 2007 1:55am Jan 10, 2007 1:55am
Quoting marc
Hi!

Do not make it difficult.

As long as it holds above 230,68, the pair will hit this year's high. Of course, 231,75/231,92 is where it has stopped now. So, it should break those resistances first. Therefore, while below those, we could go down again.

Marc
Hi!

GBPJPY went donw to 230,70 and from there has gone up to where it is now: 231,45.

As you've seen, 230,68 is an important support.

Good luck!

Marc
  • #2,578
  • Jan 10, 2007 2:26am Jan 10, 2007 2:26am
Hi!

GBPJPY is trading now at 231,61.

It needs to break 231,75 and 231,88 as you can imagine to keep going up.

Marc
  • #2,579
  • Jan 10, 2007 2:49am Jan 10, 2007 2:49am
Why don't you explain your reasoning, Marc? GBP/JPY looks to me like it has topped and is having trouble pushing through resistance at 231.60-70 to retest the high - but you seem pretty sure it is going up?
  • #2,580
  • Jan 10, 2007 3:01am Jan 10, 2007 3:01am
Quoting Miguel
Hello Itme. I don't see you trading Eur,Aud pair very often. Do you have any recent view over this pair? Have a nice weekend!
Sorry, Miguel, but I am trying to improve the quality of my analysis, which means that I am unable to spend the time to study as many currency pairs as I used to. If you or anyone else spots a potential opportunity for a low risk / high reward trade setup on any currency pair, or an impending one, then please bring it to the attention of all of us here. Meanwhile, I will continue with the analysis of GBP/USD, USD/CAD, and any other pairs which seem to show promise at any given time.
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