Low Risk, High Reward Trading Experiment

Sorry, Wave 4 is a flat Correction (3-3-5) that I mentioned in my chart.

Hi, mates!!!

GBPJPY, as you know, has a range that goes from 230,68 to 231,75/88.

It has been stuck in here during more than 2 days. Now is breaking it.

It is trading at 231,97.

Lets see how it goes, cause it was a clear buy at 231,89.

GBPJPY is going up cause jpy is down all over the place. The problem is if USDJPY will top at 120,00. It is trading now at 119,95. If it does not, it has a huge resistance at 120,27.

But cable could take the lead then.

MARC

Hi,

Isn't that nice. It has made a high at 232,39. My stop now at 231,99.
Target should be 233,82 and 234,80.
We need it always above 230,68 though.

I want to see what USDJPY does at 120,27 if it is the case. If it breaks it, next should be 120,69 without losing 199,80.

Marc

Hi!

High so far on USDJPY: 120,24. 3 pips shy so far.

Stop now on GBPJPY at 231,20. It is trading at 232,46. + 57 pips from entry.

Marc

Hi!

We are going very fast here.

USDJPY has made a high at 120,36.

GBPJPY has made a high at 232,78. + 87 pips.

We are facing the best of the situations: when USDJPY stops; takes the lead GBPUSD.

Lets see where they say they have enough.

Stop now at 231,30.

Marc

Hi!!!

Fast, fast, fast.

High so far on GBPJPY: 233,01. + 112 pips from entry.

Stop now at 232,49. Closed half at 233,00. Locked + 60 pips now for the other half.

Marc

Thank you very much for joining me here. But I think the best thing would be for you to start your own trading journal, and then just make comments on what I am doing on my journal, and occasionally comment on your strategies or opinions about market direction, not give us a running commentary on your trades and your trading system. You seem to know what you are doing. But people come here primarily to follow my trading journal, and if too many people post their trades and their ideas here, then it won't be my trading journal any more. Also, it will get so diluted by comments from other trading systems and traders that my trades and comments get harder and harder to follow.

Hi!

Sorry, Itme.

You are right.

Marc

Thursday January 11 at 4:15 ET

Trade Experiment #309 Sell EUR/JPY at 156.05

Stop is 156.21

Target is 154.00

Risk is 20 pips

Reward is 201 pips

Reward / Risk Ratio is 10.0

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

For research purposes only.

This is a plan to trade a downwards Wave C of a Wave 4 downwards trend.

If I'm not mistaken, isn't this pair a so-called "synthetic"? And if it is why has it been run up to a staggering 2.4180? Your comments would be appreciated. Thanks.

Re:

Trade Experiment #309 Sell EUR/JPY at 156.05

(Sorry, I haven't yet been able to figure out how to quote previous posts)

Does this mean that GBP/JPY is also at a reversal point? Since the wave pattern is almost identical to EUR/GBY.....

For those interested in cross-correlations between currencies, the link below is worth a look:

http://www.mataf.net/en<WBR>/analysis-correlation.htm

Exit Trade Experiment #309 Sell EUR/JPY at 156.00

I meant to share this earlier, but got distracted analysing GBP/USD. However, we entered this trade too early, and we would have exited it at break even to re-enter at a higher price according to a more careful wave analysis.
_________________________________________________
_________________________________________________

Thursday January 11 at 4:15 ET

Trade Experiment #309 Sell EUR/JPY at 156.05

Stop is 156.21

Target is 154.00

Risk is 20 pips

Reward is 201 pips

Reward / Risk Ratio is 10.0

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

For research purposes only.

This is a plan to trade a downwards Wave C of a Wave 4 downwards trend.

BOE Shocks With Rate Hike to 5.25%

Thursday, 11 January 2007
In a surprise move, the Bank of England raised rates by 25 basis points to 5.25% stating that "growth continues at a firm pace" and risks to inflation appear more to the upside. The UK economy has shown remarkable resiliency over the past several months as the consumer sector led by a strong rebound in retail sales firm labor market and near double digit increase in housing has provided a solid base for economic growth.

What has been even more impressive is UK recovery in the manufacturing sector with today's release showing upside surprises in Industrial production and the first positive reading in manufacturing production in three months. The MPC is clearly trying to nip any inflationary pressures in the bud. Today's shocker should prove beneficial for the pound especially against the yen - where expectations of any rate hike by the BOJ have been put on hold. Last time the BoE surprised with a rate hike the GBP/JPY cross moved 700 points higher within two weeks. While such a spurt is unlikely given the lofty levels that the pair currently trades at, the news should continue to attract more carry capital in to the cross now that the interest rate differential has increased.
_________________________

On the other hand:

January 10, 2007

The dollar remains firm across the board, holding steady near its highest levels since late November against the euro around 1.2930. The recent upturn in US economic reports have resulted in an overall reassessment in Fed policy, with many not expecting the FOMC to shift its stance until the second half of 2007. Interestingly, the sharp pullback in oil prices will further alleviate trade imbalances and inflationary pressure in the US, as evidenced with yesterday's shrinking US deficit figure.

So possible that gbp/jpy can break former high?234.90???

<table class="tborder" style="margin-top: 12px;" align="center" border="0" cellpadding="3" cellspacing="0" width="100%"><thead><tr><td class="alt2" nowrap="nowrap">Thu. 01/11</td> <td class="alt2"> 12:00am </td> <td class="alt2" align="center">JPY</td> <td class="alt2">Leading Index m/m</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">20.0%</td> <td class="alt2" align="center">20.0%</td> <td class="alt2" align="center">54.5%</td> <td class="alt2" id="collapsecal_eventanalysis_3485" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3485" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<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>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 1:00am </td> <td class="alt2" align="center">JPY</td> <td class="alt2">Machine Tool Orders y/y</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">-2.4%</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">4.9%</td> <td class="alt2" id="collapsecal_eventanalysis_3486" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3486" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

Measures the total value of new orders placed with machine tool manufacturers. A rising trend has a positive effect on the nation's currency. When manufacturers increase their purchasing of machine tools it signals that the manufacturing industry is in an expansion phase.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 4:30am </td> <td class="alt2" align="center">GBP</td> <td class="alt2">Industrial Production m/m</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">0.5%</td> <td class="alt2" align="center">0.2%</td> <td class="alt2" align="center">-0.8%</td> <td class="alt2" id="collapsecal_eventanalysis_3466" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3466" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

Measures the total value of output produced by factories, mines, and utilities. A rising trend has a positive effect on the nation's currency because high levels of production are a sign of a strong economy. Industrial Production reacts quickly to the ups and downs of the business cycle and can be a leading indicator of manufacturing employment, average earnings, and personal income. Traders pay special attention to Industrial Production because it's one of the few growth indicators that is produced directly by the Federal Reserve.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 4:30am </td> <td class="alt2" align="center">GBP</td> <td class="alt2">Manufacturing Production m/m</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">0.3%</td> <td class="alt2" align="center">0.2%</td> <td class="alt2" align="center">-0.4%</td> <td class="alt2" id="collapsecal_eventanalysis_3467" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3467" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

Measures the total value of output produced by manufacturers. Manufacturing Production differs from Industrial Production in that it only measures the 13 sub-sectors of production that relate directly to manufacturing. Manufacturing industries make up about 80% of total Industrial Production.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 7:00am </td> <td class="alt2" align="center">GBP</td> <td class="alt2">Interest Rate Statement</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">5.25%</td> <td class="alt2" align="center">5.00%</td> <td class="alt2" align="center">5.00%</td> <td class="alt2" id="collapsecal_eventanalysis_3468" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3468" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>

The bank is usually very reluctant to change rates in January

</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

The central bank's governing body, the Bank of England (BOE) Monetary Policy Committee, releases an Interest Rate Statement each month. The statement contains the latest decision regarding changes to the nation's short term interest rate ("Bank rate"). A rising trend has a positive effect on the nation's currency. Short term interest rates are the paramount factor in currency valuation; traders look at most other indicators merely to predict how interest rates may change in the future. What makes interest rates so important is that high rates attract foreigners looking for the best "risk-free" return on their money, which significantly increases demand for the nation's currency. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 2%, they will respond by raising interest rates in an attempt to bring prices down. This is what makes inflation-predicting indicators so important. Traders know that rising prices will lead the central bank to raise interest rates, which ultimately leads to a more valuable currency.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 7:45am </td> <td class="alt2" align="center">EUR</td> <td class="alt2">Interest Rate Statement</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">3.50%</td> <td class="alt2" align="center">3.50%</td> <td class="alt2" align="center">3.50%</td> <td class="alt2" id="collapsecal_eventanalysis_3469" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3469" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>

Rates should be left on hold at 3.5%

</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

The European Central Bank (ECB) Governing Council releases an Interest Rate Statement each month. The statement contains the latest decision regarding changes to the euro area's short term interest rate ("minimum bid rate"). A rising trend has a positive effect on the nation's currency. Short term interest rates are the paramount factor in currency valuation; traders look at most other indicators merely to predict how interest rates may change in the future. What makes interest rates so important is that high rates attract foreigners looking for the best "risk-free" return on their money, which significantly increases demand for the nation's currency. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 2%, they will respond by raising interest rates in an attempt to bring prices down. This is what makes inflation-predicting indicators so important. Traders know that rising prices will lead the central bank to raise interest rates, which ultimately leads to a more valuable currency.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 8:00am </td> <td class="alt2" align="center">USD</td> <td class="alt2">NY Fed President Geithner Speaks</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" id="collapsecal_eventanalysis_3487" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3487" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

New York Federal Reserve President Timothy Geithner will speak about the global economy, in New York.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 8:30am </td> <td class="alt2" align="center">EUR</td> <td class="alt2">ECB President Trichet Speaks</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" id="collapsecal_eventanalysis_3470" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3470" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Investica Analysis</legend>

Hints over February's policy will be crucial.

</fieldset> <fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

European Central Bank (ECB) President Jean-Claude Trichet will speak at a press conference following the Governing Council's meeting in Frankfurt. The ECB Interest Rate Statement is void of commentary, so traders usually focus on Trichet's post-release press conference for clues about future rate decisions. Because these clues can sometimes be obscure, the market tends to experience heavy volatility during this press conference.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 8:30am </td> <td class="alt2" align="center">USD</td> <td class="alt2">Unemployment Claims</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">299K</td> <td class="alt2" align="center">320K</td> <td class="alt2" align="center">329K</td> <td class="alt2" id="collapsecal_eventanalysis_3471" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3471" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<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>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 10:15am </td> <td class="alt2" align="center">USD</td> <td class="alt2">Fed Governor Bies Speaks</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">
</td> <td class="alt2" id="collapsecal_eventanalysis_3498" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3498" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

Federal Reserve Governor Susan Schmidt Bies will speak at the Enterprise Risk Management and Mortgage Lending National Credit Union Administration's Risk Mitigation Summit, in Washington DC.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 10:30am </td> <td class="alt2" align="center">GBP</td> <td class="alt2">Leading Index m/m</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">0.1%</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">-0.1%</td> <td class="alt2" id="collapsecal_eventanalysis_3488" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3488" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<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>

</td> </tr> </tbody><thead> <tr> <td class="alt2" nowrap="nowrap">
</td> <td class="alt2"> 6:50pm </td> <td class="alt2" align="center">JPY</td> <td class="alt2">M2+CD Money Supply y/y</td> <td class="alt2" align="center">
</td> <td class="alt2" align="center">0.8%</td> <td class="alt2" align="center">0.8%</td> <td class="alt2" align="center">0.7%</td> <td class="alt2" id="collapsecal_eventanalysis_3489" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3489" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

Measures the annual change in currency outstanding. Higher levels of currency can have a devaluing effect on the currency. M2+CD is calculated as follows:

M1 = currency in circulation + overnight deposits
M2+CD = M1 + Quasi-Money (Time Deposits etc.) + CDs

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt1" nowrap="nowrap">Fri. 01/12</td> <td class="alt1"> 12:00am </td> <td class="alt1" align="center">JPY</td> <td class="alt1">Eco Watchers Survey</td> <td class="alt1" align="center">
</td> <td class="alt1" align="center">48.9</td> <td class="alt1" align="center">49.8</td> <td class="alt1" align="center">48.9</td> <td class="alt1" id="collapsecal_eventanalysis_3482" style="" align="center"> [read] </td> </tr> </thead> <tbody id="collapseobj_eventanalysis_3482" style="display: none;"> <tr> <td class="alt1" style="background-color: rgb(240, 254, 237); padding-bottom: 11px;" colspan="9" width="100%">

<fieldset class="smallfont" style="padding: 4px 10px 2px; width: 70%; margin-bottom: 9px;"> <legend>Definition</legend>

Measures the mood of businesses that directly service consumers, such as barbers, taxi drivers, and waiters. A reading above 50 signals an improvement in sentiment.

</fieldset>

</td> </tr> </tbody><thead> <tr> <td class="alt1" nowrap="nowrap">
</td> <td class="alt1"> 2:45am </td> <td class="alt1" align="center">EUR</td> <td class="alt1">French CPI m/m</td> <td class="alt1" align="center">
</td> <td class="alt1" align="center">0.2%</td> <td class="alt1" align="center">0.1%</td> <td class="alt1" align="center">0.1%</td></tr></thead></table>

We anticipate to see a good selling opportunity in GBP/JPY at about 235.50.

sorry i couldn´t answer earlier cause i was in college, god damn.

anyway it appears wave-c did its move up and will soon revers for the final large C-wave of a larger wave-4

Thursday January 11, 2006 at 8:45 ET

Trade Experiment #310 Sell USD/CAD at 1.1800

Stop is 1.1821

Target is 1.1700

Risk is 26 pips

Reward is 95 pips

Reward / Risk Ratio is 3.6

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

For research purposes only.

This is an attempt to trade down the b Wave of the C Wave of Wave 4, or the second wave down of a new upwards 5 wave set - Wave 5.

__________________________________________________
__________________________________________________

Previous trade experiment:

Update Trade Experiment #304A Sell USD/CAD <hr style="color: rgb(209, 209, 225);" size="1"> Monday January 8 at 11:15 ET

Upon reflection, I believe that it is probable that USD/CAD is currently engaged in a Wave 4 pattern. Our trade should have been exited at the bottom of the 5-wave pattern at 1.1722, which was a high probability reversal target, to take 58 pips of profit. I believe that this was a wave A of a Wave 4, which was then followed by an upwards wave B, and which will now be followed by a downwards wave C.

Wave C should be reversing at about 1.1780, which is another entry opportunity for a short (few pips) trade downwards. Target is about 1.1710.

p.s. - The upwards wave C reversed at 1.1782 as predicted, and has fallen to 1.1729 so far, on its way to about 1.1722. In case it doesn't make it all the way to 1.1722, traders may elect to exit earlier.

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Friday January 5 at 6:45 ET
Trade Experiment #304A Sell USD/CAD at 1.1785
Stop is 1.1861
Target is 1.1300
Risk is 80 pips
Reward is 481 pips
Reward / Risk Ratio is 6.0

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

For research purposes only.

This is an attempt to trade down from the top of a large trend - Wave 1 down.
<!-- / message --><!-- sig --> __________________

Hi Itme,
What is ur insight on EUR/GBP? Looks like it has collapsed below the triangle. Will it dive from now on? Thanks alot!

GBP/USD and EUR/USD both spiked up, but GBP/USD more, in reaction to the surprise BOE interest rate hike. Then EUR/USD fell to a new low while GBP/USD only fell about 40% so far. So EUR/GBP ended up falling 120 pips in one week, which is alot for that pair. .6645 may be the low for now, or we could be in the Wave 3 down, so more declines could occur.

The big triangle is broken, so more downwards movement is likely in the long term. In the short term we could have a rise to about .6750 if it doesn't fall past .6640.

p.s. - my lower target for EUR/GBP is .6608