Low Risk, High Reward Trading Experiment

Having fun! Me too! I love doing market analysis. But I don't like losing money! But, as is more than evident, I enjoy blabbering on at any given opportunity. But, since there are alot of people checking in here and risking hard earned capital, I try to be thorough and precise in offering the best advise I can. Nothing personal! Have a great weekend.

when i was saying playing i actually meant testing. you know, all the time i came up with the same wave-analysis as you described it in your posts.
i was a little bit jumpy in the last few days because your analysis and mine changed a bit. but i think that´s normal with this kind of technique.

you are totally right about having fund and being serious at the same time. i dont wanna loose my money either.

have great weekend

Itme,

Can you share the name of your signal service?

Thanks

I would rather not, as I am still backtesting their performance and evaluating their system.

Thanks itme....

hi itme
wish you are fine >>
it's strange for me to spend a day trading without reading a bost from you

Itme,

In your opinion, has this latest jump in this pair served as the last move prior to a decline? Your thread, by the way, is extremely informative and appreciated. Thanks.

so why not let us evaluate it?

I don't necessarily recommend this service, or claim it is the best available, but if you want to check it yourself, it is forexproalerts.com
There is a thread about it in the Lounge - Classified section of this site.

Monday January 22 at 18:00 ET

Exit Trade Experiment #320 Sell CHF/JPY at 97.30 and re-enter a short position at 97.70

We expect one more wave up. Exit for a 19 pip loss and re-enter at a price 40 pips higher, at 97.70. Raise stop to 98.06
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Previous trade experiment:

Wednesday January 17 at 1:45 ET
Trade Experiment #320 Sell CHF/JPY at 97.20
Stop is 97.51
Target is 95.00
Risk is 40 pips
Reward is 211 pips
Reward / Risk Ratio is 5.3

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

For research purposes only.

This is an attempt to trade the C Wave down of the Fourth Wave down of the Fifth large wave upwards of a very large upwards trend which began October 24, 2000. The current price of CHF/JPY is 97.20.

p.s. - recent high for CHF/JPY is 97.41, 21 pips above our entry price, and just 10 pips off our stop. The system generated high probability reversal point is actually 97.40, so I didn't do proper analysis prior to this entry. Stop should have been set or adjusted to 97.61.

GBP/CHF update for Monday January 22

GBP/CHF seems to be headed up towards 2.4750 - 2.4800, at which point it will correct in what we count as the fourth wave of the expanded third wave, usually a shallow a-b-c zigzag, after which it should rise again to about 2.4825 or higher.

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Previous comments and trade experiments:

We have exited Trade Experiment #322 Sell GBP/CHF for 50 pips profit
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Dragon Slayer, are you long GBP/CHF still? It's coming down, but how far is hard to tell. According to our signals so far, we are out of this trade with 50 pips of profit. The current price is 2.4619. It might be wise to exit soon in anticipation of a further rise.

On the other hand, the recent rise to 2.4685 could represent a failed fifth wave, in which case it is downwards from here. I don't know at this point.

Friday January 19 at 13:30 ET

GBP/CHF fell to 2.4580, 5 pips below our revised target, at 4:15 ET on January 19, 2007 hitting our revised target and earning about 50 pips of profit.
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Previous trade signals:

Thursday January 18 at 20:00 ET

Re: Trade Experiment #322 Sell GBP/CHF at 2.4650
Adjust stop to 2.4705
Adjust target to 2.4585

The recent low is 2.4535. We anticipate one more pulse upwards to a new high at approximately 2.4825. So we will exit at a strategic opportunity at approximately 2.4585 to earn 50 pips of profit.

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Thursday January 18 at 3:30 ET
Trade Experiment #322 Sell GBP/CHF at 2.4650
Stop is 2.4751
Target #1 is 2.4000
Risk is 116 pips
Reward is 635 pips
Reward / Risk Ratio is 5.6

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

For research purposes only.

p.s. - The recent high on GBP/CHF is 2.4687. The wave pattern is very steep and narrow, so it is difficult to assess the completion of the wave pattern. It could rise to 2.4725 if GBP/USD springs back up while USD/CHF stays up near its recent high. USD/CHF is at a recent high of 1.2519, after having jumped up 89 pips in 6 hours.

p.p.s - GBP/CHF fell to 2.4580, 5 pips below our revised target, at 4:15 ET on January 19, 2007 hitting our revised target and earning about 50 pips of profit.

Monday January 22 at 3:30 ET

Trade Experiment #317B Sell GBP/USD at 1.9833

Stop is 1.9883

Target is 1.9550

Risk is 54 pips

Reward is 279 pips

Reward / Risk Ratio is 5.2

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

For research purposes only.

Our wave hypothesis is that we are trading the fourth wave down of an upwards Wave One

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Previous trade experiments:

We adjusted the target and exited Trade Experiment #317 Sell GBP/USD at 1.9760 at 1.9700 to consolidate 56 pips of profits. The interim low was at 1.9636, which is 64 pips lower, as the price dropped much more than expected.

Based on our current favorite wave hypothesis we see a trade opportunity to sell at 1.9766 with a conservative target at 1.9650.

Thursday January 18 at 20:00 ET
Trade Experiment #317A Sell GBP/USD at 1.9766
Stop is 1.9806
Target is 1.9650
Risk is 44 pips
Reward is 112 pips
Reward / Risk Ratio is 2.5

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

For research purposes only.

Our wave hypothesis is that we are going down from our entry price in a Wave C of a Fourth Wave correction, and that GBP/USD will rise again to a new high at 1.9800 or above before a major correction downwards.

A long trade at the bottom of Wave C at about 1.9600 to 1.9650 up to 1.9800 or higher could be a good low risk / high reward trade.

p.s. - the interim low so far is 1.9697, still 47 pips from our "conservative target". A bullish UK consumer confidence report may have caused a shortened downwards Wave C. A person integrating fundamental analysis and announcement trading with my technical models would probably have exited this trade at 1.9700 to collect 62 pips of profit, with gratitude, considering the news.

UK Retail Sales (December) (9:30GMT; 4:30EST)
Actual: 1.1%
Expected: 0.5%
Previous: 0.2%%

How Did the Markets React?

UK Retail Sales handily beat expectations printing at 1.1% versus 0.5% forecast, but almost all the markets reacted negatively to the figure as the good news was well anticipated and profit taking overwhelmed the fundamentals. Bonds rose, the pound fell and equities corrected mildly. The health of the UK consumer is well established, but markets bid up most of the instruments in days prior to the release and traders used today’s results to lock in gains made this week.
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Previous trade experiment:

Thursday January 18 at 4:15 ET

Note: GBP/USD just rose to 1.9777, 17 pips past our entry price. It may have reached its top, based on the wave pattern and the rapid fall to 1.9704. However, there is a distinct possibility that it reached only the top of the third wave of the last (fifth) upwards wave, and that we caught the Wave A - B-C of a zigzag wave 4 down. In this second case we are due for another wave up - wave 5 - to either a new high, or a double top (failed or truncated fifth wave). We will enter another short position at the top of the next upwards wave, wherever that is.

Adjust target for Trade Experiment #317 Sell GBP/USD to 1.9700. That is, exit as close to 1.9700 as possible. We are best to exit here close to 1.9700, take about 56 pips of profit, and assess the future of this trend, as GBP/USD may yet rise to one more new high.
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Previous trade experiment:

Wednesday January 17 at 22:00 ET
Trade Experiment #317 Sell GBP/USD at 1.9760
Stop is 1.9821
Target is 1.9550
Risk is 65 pips
Reward is 206 pips
Reward / Risk Ratio is 3.2
Confidence level: good
Accuracy: fair
Reward / Risk Ratio : fair
For research purposes only.

This is an attempt to trade the Wave A down of a large Fourth Wave down of a large upwards trend.The current price of GBP/USD is 157.30.

Monday January 23 at 3:30 ET

Trade Experiment #324 Sell EUR/USD at 1.2983

Stop is 1.3021

Target #1 is 1.2875

Risk is 41 pips

Reward is 105 pip

Reward / Risk Ratio is 2.6

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

For research purposes only.

Wave hypothesis: Our last trade on EUR/USD was trading up what we theorize is the Wave C of a Wave 4 upwards corrective wave pattern. The actual high was 1.2999.

After reaching the daily high of 1.2999, EUR/USD fell 85 pips quickly to 1.2914 in what we think is Wave 1, then bounced up about 60% again to 1.2970, then down to 1.2924, then up again to 1.2985 to complete Wave 2. We now see the trend going down to between 1.2825 and 1.2875 to finish off the downwards trend with a downwards Wave 5.


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Previous predictions and trade experiments:

EUR/USD prediction for Friday January 19 after market close

Friday January 19 at 22:30 ET

Our last trade on EUR/USD was a buy which earned 8 pips and 59 pips in two stages (see below). This was trading up what we theorize is the Wave C of a Wave 4 upwards corrective wave pattern. The actual high was 1.2999, 14 pips higher than our profit target.

After reaching the daily high of 1.2999, EUR/USD fell 85 pips quickly to 1.2914, then bounced up about 60% again to 1.2970. We now see the trend going down to between 1.2825 and 1.2875 to finish off the downwards trend with a downwards Wave 5.

Then an uptrend will begin, which is the Fifth Wave of a THIRD or FIFTH WAVE, with a target of about 1.3500.
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Previous trade experiments:

Thursday January 18 at 22:30 ET

We exited our long EUR/USD trade (Trade Experiment #323 Buy EUR/USD ) with 8 pips profit in order to enter at a more advantageous position of 1.2923. The low was at 1.2898. No stop price was given. The target of 1.2985 was recently met, for a profit of 59 pips. The actual high was 1.2999, 14 pips higher than our profit target.
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Thursday January 18 at 6:00 ET

Exit Trade Experiment #323 Buy EUR/USD at 1.2946 (collect 8 pips profit) and re-enter long trade at 1.2923

The wave pattern, etc. suggests that there will be one more small wave down, possibly to a new low.
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Thursday January 18 at 5:30 ET
Trade Experiment #323 Buy EUR/USD 1.2935
Stop is 1.2925
Target #1 is 1.2985
Risk is 13 pips
Reward is 47 pips
Reward / Risk Ratio is 3.6
Confidence level: good
Accuracy: good
Reward / Risk Ratio : fair

For research purposes only.

Adjust stop for Trade Experiment #324 Sell EUR/USD at 1.2983 to 1.3032

The previous stop was not calculated properly. I am having trouble with my charts, didn't do a thorough job of setting the stop.

p.s. - the price of 1.3037 was just met. If stopped out, then re-enter. If not stopped out, adjust stop to 1.3063. There are multiple reasons to believe that a reversal is imminent.

Itme:

Thanks for taking the time to post your trade experiments! I have found them to be a very useful tool for validating (or not!) my own trading system.

I am wondering if you have a hypothesis regarding the GBP/JPY. It seems to have the Energizer Rabbit Syndrome!

Thanks again!

Monday January 23 at 6:00 ET

Trade Experiment #325 Buy USD/JPY at 121.30

Stop is 121.09

Target is 122.00

Risk is 24 pips

Reward is 67 pip

Reward / Risk Ratio is 2.8

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

For research purposes only.

Wave hypothesis: This is the fifth wave of the Fifth Wave according to our wave count.

Monday January 23 at 6:00 ET

Trade Experiment #326 Sell GBP/JPY at 241.50

Stop is 242.11

Target is 236.00

Risk is 70 pips

Reward is 540 pip

Reward / Risk Ratio is 7.7

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

For research purposes only.

Wave hypothesis: This is the Fourth Wave correction according to our wave count.

itme
keep in gbp/usd short or exit ?

made 100pips today,

Monday January 22 at 7:30 ET

Raise stop to 1.9911 (from 1.9882) for Trade Experiment #317B Sell GBP/USD at 1.9833

The wave count, wave proportion, and the fact that the price just came up to meet the January 15 upper trendline all favor the chance of a reversal at about 1.9880. We are also at a reversal point according to my Q system.

Also, FFAN analyst said, "Markets will be looking to attack the 2.00 level against the US dollar, but Sterling is increasingly at risk to a sharp corrective retreat back towards 1.9600 and offers poor value above 1.9850.......Sterling will, therefore, look to secure further support in the short term, but the currency will be very vulnerable to a sharp correction weaker if there are doubts over either the domestic interest rate expectations or the global confidence in carry trades.

p.s. - interim high is 1.9914 . The pattern and configuration look very good for a reversal at about this price. We may see a double top to facilitate entry for short position at or near to 1.9914.