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Low Risk, High Reward Trading Experiment

  • #2,741
  • Edited Jan 25, 2007 1:17pm Jan 24, 2007 9:42pm | Edited Jan 25, 2007 1:17pm
GBP/JPY Update for Wednesday January 24 at 22:30 ET

Regarding Trade Experiment #326 Sell GBP/JPY at 241.50 , we exited our short GBP/JPY trade at 237.60 to collect 381 pips of profit, in anticipation of a sizeable bounce on the downwards path.

In fact, a bounce occured, from the interim low of 237.50, just 10 pips below our recommended exit price.

The bounce took the form of a clear A-B-C wave and brought the price of GBP/JPY up 120 pips to 238.70, exactly to our Q system reversal value. This would have been the time to re-enter the short trade. We would have made that recommendation if we had been able to.

The price of GBP/JPY subsequently fell another 195 pips to 236.75, precisely to our Q high probability reversal target again. We recommend an exit from the short trade at this value also.

We now predict a rise in GBP/JPY from 236.75 up to 237.75 - 238.00, and then possibly another sell opportunity from the top of the bounce, and on down to the bottom of the Wave 4 correction at 235.00 to 236.00.

p.s. - GBP/JPY did not bounce up very much in the wave 4 correction from 236.75 as expected, but a quick drop in USD/JPY during this Asian session while GBP/USD remained static produced a fast fall in GBP/JPY to 236.33. This could be the bottom of Wave A here, or there could be one small wave down more to go.

p.p.s. - A strong rise in USD/JPY coupled with a stagnant GBP/USD caused GBP/JPY to rise 225 pips to about 238.60 today (Thursday the 25th) from the low of 236.33. This could be the first wave of the last (fifth) large Elliott Wave up to the ultimate trend high.
_____________________________________________
_____________________________________________

Previous trade experiments:

Adjust target for Trade Experiment #326 Sell GBP/JPY to 237.60

Wednesday January 24 at 12:00 ET

Trade Experiment #326 Sell GBP/JPY at 241.50 has already progressed 400 pips towards its target.

Adjust target to 237.60 (from 236.00, a rough estimate entered at the time of the trade, and a later estimate of travel, 237.30) to collect 381 pips of profit

Based on the wave pattern, it is likely to bounce up substantially before finishing its downwards path.
_____________________________________
_____________________________________

Previous trade experiments:

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.
  • #2,742
  • Edited Jan 25, 2007 1:17pm Jan 24, 2007 11:58pm | Edited Jan 25, 2007 1:17pm
Thursday January 25 at 00:45 ET

My wave count and other considerations lead me to believe that exiting the short GBP/JPY trade at 1.9630 is the sensible thing to do. We should have exited it when it reached 1.9633 a few minutes ago, but we were not keeping up minute by minute with the developments, particularly as we were expecting it to rise strongly before it came down again, and to fall when GBP/USD fell later in the day, not when USD/JPY just fell recently, while GBP/USD is still likely to do a strong upwards correction (wave C). Now both USD/JPY and GBP/USD are likely to rise, lifting up GBP/JPY strongly, which is what we expected to happen earlier.

p.s.- What we predicted happened. GBP/JPY bounced off of 236.30, then rose strongly 170 pips to 238.00, forming a perfect A-B-C pattern ending in a crown on a pole finish. It may come down again as GBP/USD falls strongly, or a strong rise in USD/JPY could take it up. We will have to watch and see where the next strategic opportunity might arise. If it falls again to form a double bottom when GBP/USD nears the bottom of its travel, then we will have a strategic buy opportunity. It may come down to a lower low also.
p.p.s. - A strong rise in USD/JPY coupled with a stagnant GBP/USD caused GBP/JPY to rise 225 pips to about 238.60 today (Thursday the 25th) from the low of 236.33. This could be the first wave of the last (fifth) large Elliott Wave up to the ultimate trend high.
_______________________________________

Fundamental factors influencing the rapid fall in GBP/JPY and EUR/JPY today and yesterday:

Japanese Yen Ends 2 Week Losing Streak on Carry Trade Liquidation
Kathy Lien, Chief Strategist

The US dollar is higher today against most of the other major currencies, but this was not due to any dollar positive news. Instead, the lack of any US data actually helped the dollar benefit from weakness elsewhere. The Australian dollar, British pound and Japanese Yen were the big movers of the day. Exceptionally weak Australian consumer prices and less hawkish minutes from the latest Bank of England monetary policy meeting triggered a wave of carry trade liquidation that put an end to the Japanese Yen’s close to two week slide. The one currency that the dollar did not rally against was the Japanese Yen as it too fell victim to carry trade liquidation.
_____________________________________________________
_____________________________________________________

Previous trade experiments:

GBP/JPY Update for Wednesday January 24 at 22:30 ET

Regarding Trade Experiment #326 Sell GBP/JPY at 241.50 , we exited our short GBP/JPY trade at 237.60 to collect 381 pips of profit, in anticipation of a sizeable bounce on the downwards path.

In fact, a bounce occured, from the interim low of 237.50, just 10 pips below our recommended exit price.

The bounce took the form of a clear A-B-C wave and brought the price of GBP/JPY up 120 pips to 238.70, exactly to our Q system reversal value. This would have been the time to re-enter the short trade. We would have made that recommendation if we had been able to.

The price of GBP/JPY subsequently fell another 195 pips to 236.75, precisely to our Q high probability reversal target again. We recommend an exit from the short trade at this value also.

We now predict a rise in GBP/JPY from 236.75 up to 237.75 - 238.00, and then possibly another sell opportunity from the top of the bounce, and on down to the bottom of the Wave 4 correction at 235.00 to 236.00.

p.s. - GBP/JPY did not bounce up very much in the wave 4 correction from 236.75 as expected, but a quick drop in USD/JPY during this Asian session while GBP/USD remained static produced a fast fall in GBP/JPY to 236.33. This could be the bottom of Wave A here, or there could be one small wave down more to go.
_____________________________________________
_____________________________________________

Previous trade experiments:

Adjust target for Trade Experiment #326 Sell GBP/JPY to 237.60

Wednesday January 24 at 12:00 ET

Trade Experiment #326 Sell GBP/JPY at 241.50 has already progressed 400 pips towards its target.

Adjust target to 237.60 (from 236.00, a rough estimate entered at the time of the trade, and a later estimate of travel, 237.30) to collect 381 pips of profit

Based on the wave pattern, it is likely to bounce up substantially before finishing its downwards path.
_____________________________________
_____________________________________

Previous trade experiments:

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.
  • #2,743
  • Edited 3:26am Jan 25, 2007 2:09am | Edited 3:26am
Thursday January 25 at 3:00 ET

Trade Experiment #328 Sell GBP/USD at 1.9706

Stop is 1.9753

Target is 1.9600

Risk is 51 pips

Reward is 102 pip

Reward / Risk Ratio is 2.0

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

For research purposes only.
_____________________________________________________
_____________________________________________________

Previous trade experiment:

Story of a missed entry (close call).

On January 15, when the price of GBP/USD was only about 1.9600, and after the Bank of England unexpectedly raised its interest rate, which had already caused a large surge in price of GBP/USD, I said:

"GBP/USD is expected to continue its current uptrend to about 1.9700 before reversing for a Wave 4 reversal, carrying the price down to about 1.9550, before heading up to the ultimate high of about 1.9800 for the Wave 3 segment of this upwards pattern."

The top of the wave 3 was at exactly 1.9700, as predicted, and the bottom of wave 4 was at 1.9590, 40 pips higher than our predicted reversal point. The ultimate Wave C of Wave 4 trend high, however, was considerably higher than our estimate of 1.9800, as GBP/USD made a spectacular finish to this trend by shooting up 200 pips on January 22 / 23 to hit a high of 1.9914.

On Tuesday January 16 at 11:00 ET my trading system gave me this trade set-up, with a conservative target of 1.9750:

Trade Experiment #313 Buy GBP/USD at 1.9602
Stop is 1.9558
Target is 1.9750
Risk is 48 pips
Reward is 144 pips
Reward / Risk Ratio is 3.0
Confidence level: good
Accuracy: good
Reward / Risk Ratio : fair

On Monday January 22 at 7:30 ET, after the .25% interest rate hike and a two week rise in price of almost 650 pips, in attempting to determine the reversal point of the upwards Wave C trend, we said:

Quote:
Originally Posted by itme http://www.forexfactory.com/images/buttons/viewpost.gif
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.

There was no double top at 1.9914. That price was the one and only top. Often there is no second chance to enter at the precise top. Our stop had previously been adjusted to 1.9911 - just 3 pips short of the high point. At the time we made the above journal entry we could have advised entry to what we had waited a long time for - the anticipated large Wave 5 short trade - at the market price at the time, at about 1.9900, but we were striving for perfection. Thus technically we are not in this trade, due to an error of 3 pips in setting the stop. Thus our new "striving for perfection" policy cost us this rare large trend trade by a few pips.

The price subsequently fell 250 pips to an interim low of 1.9645. Plus there is more downside potential in this trend according to my system.
  • #2,744
  • Edited 1:37pm Jan 25, 2007 2:44am | Edited 1:37pm
Thursday January 25 at 3:00 ET

Trade Experiment #329 Sell EUR/USD at 1.3000

Stop is 1.3026

Target is 1.2830

Risk is 29 pips

Reward is 167 pip

Reward / Risk Ratio is 5.7

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

For research purposes only.

p.s. - At 14:00 ET January 25 EUR/USD broke through the lower 2 week trendline and quickly dropped 25 pips. This confirms that it will be likely carrying on down to at least 1.2900, and likely lower. However, the news today has not been strong, so the movement is somewhat lackadaisacal.

The movement in GBP/USD has also paralleled the above. The two large European currencies are gradually getting back onto sych after the huge recent rise in GPB/USD caused by the unexpected Bank of England rate hike.
__________________________________________________
__________________________________________________

Prediction from yesterday:

EUR/USD will correct upwards now to about 1.2980 from its current price of 1.2955 and then carry on downwards to about 1.2780 to 1.2840. A failed fifth wave down would stop at about 1.2880.
  • #2,745
  • Edited 1:38pm Jan 25, 2007 2:50am | Edited 1:38pm
Thursday January 25 at 3:30 ET

Adjust target for Trade Experiment #327 Sell USD/CHF to 1.2445, 5 pips short of the original target

The wave count indicates that it may have reached the bottom of its travel.

p.s. - The wave that ended at 1.2443 turned out not to be the bottom of the downwards Wave C, but the bottom of the first wave within Wave C. Thus there followed two more downwards waves, wave three and wave five, carrying the price of USD/CHF down to 1.2422. After reaching this pivot point, there was a clear and unequivocal complete downwards wave pattern, so there was a buy trade opportunity. The price of 1.2422 is also a high probability reversal point according to my Q system. Subsequently, the price rose 65 pips quickly to 1.2487 in a 1-2-3 wave pattern.
___________________________________________________
___________________________________________________

Previous trade experiment:

Wednesday January 24 at 3:30 ET

Trade Experiment #327 Sell USD/CHF at 1.2490
Stop is 1.2503
Target is 1.2440
Risk is 17 pips
Reward is 46 pips
Reward / Risk Ratio is 2.7

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

For research purposes only.

Wave hypothesis: This is the Fourth Wave correction of an uptrend according to our wave count.
  • #2,746
  • Jan 25, 2007 3:09am Jan 25, 2007 3:09am
Yesterday at 16:00 I provided a rationale for why I thought GBP/USD would probably bounce up to 1.9725, which it did. But in all the hustle and bussell of following so many currency pairs, I forgot this detailed analysis, so I entered the short GBP/USD just now prematurely, at 1.9706.

If I had waited until 1.9725, however (which would have been the logical thing to do), then with the same stop at 1.9753 and target at 1.9600, then the risk would fallen to 32 and the reward would risen to 121, bringing the RRR up to 3.8.

By waiting another 6 pips and entering at the high of 1.9731, then the RRR would increase to 4.9, which brings it to within range of a viable trade according to my strategic merit criteria.

I have often found that by adjusting the entry to my minimum RRR criteria, I have approximated the high of the trend.

Quoting itme
Trending markets often retrace in a wave 4 during the Asian session. Also, according to my count, we are due for an upwards wave 4 correction of this downtrend, which can carry the price up to between 1.9725 and 1.9800. It I was short, I might consider taking my profits and waiting for a good re-entry opportunity.

Also, the GBP news today was pretty good:

Wed.1/24
4:30 GBPGDP q/q (p) http://www.forexfactory.com/images/m...mpact_high.gif 0.8% 0.7% 0.7%
4:30 GBPBOE Meeting Minutes http://www.forexfactory.com/images/m...mpact_high.gif 5-4 8-1 9-0
4:30 GBPIndex of Services 3m/3m http://www.forexfactory.com/images/m...impact_low.gif 1.0% 0.9% 0.8%http://www.forexfactory.com/images/m...us_revised.gif

p.s. - GBP/USD just corrected up to 1.9732
__________________________________________________ ___
__________________________________________________ ___

Previous trade experiment:

Thursday January 25 at 3:00 ET
Trade Experiment #327 Sell GBP/USD at 1.9706
Stop is 1.9753
Target is 1.9600
Risk is 51 pips
Reward is 102 pip
Reward / Risk Ratio is 2.0

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

For research purposes only.
  • #2,747
  • Edited 1:41pm Jan 25, 2007 3:23am | Edited 1:41pm
The wave count on the one hour chart was extremely clear, indicating a probable bottom of the downwards USD/CHF trend at 1.2445, which coincided with our predicted bottom at about 1.2440. It isn't that often that the wave patterns on the one minute chart are this clear.

Thursday January 25 at 3:00 ET

Trade Experiment #330 Buy USD/CHF at 1.2445

Stop is 1.2416

Target is 1.2600

Risk is 33 pips

Reward is 151 pip

Reward / Risk Ratio is 4.6

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

For research purposes only.

p.s. - The wave that ended at 1.2443 turned out not to be the bottom of the downwards Wave C, but the bottom of the first wave within Wave C. Thus there followed two more downwards waves, wave three and wave five, carrying the price of USD/CHF down to 1.2422, just above our stop. After reaching this pivot point, there was a clear and unequivocal complete downwards wave pattern, so there was a buy trade opportunity. The price of 1.2422 is also a high probability reversal point according to my Q system. Subsequently, the price rose 65 pips quickly to 1.2487 in a 1-2-3 wave pattern.

_______________________________________________________
__________________________________________________________

Prediction from yesterday:

Some predictions for Wednesday January 24
Wednesday January 24 at 2:30 ET

USD/CHF will likely correct down now to about 1.2440 and then proceed on upwards to about 1.2550 to 1.2600. Current price is 1.2490.

GBP/USD will correct upwards now to about 1.9725 from its current price of 1.9670 and then carry on downwards to about 1.9585.

EUR/USD will correct upwards now to about 1.2980 from its current price of 1.2955 and then carry on downwards to about 1.2780 to 1.2840. A failed fifth wave down would stop at about 1.2880.

USD/JPY will likely correct down now to about 120.60 to 120.70 and then proceed on upwards to about 122.00 to 123.25. Current price is 121.00.

This is a general outlook only, and very approximate, not a trade recommendation or trade experiment, based on Elliott Wave theory as I currently understand and apply it. I do this to practise my prediction methods, and to anticipate future favorable trade set-ups.
  • #2,748
  • Edited 4:50pm Jan 25, 2007 4:15am | Edited 4:50pm
Some poor news out of Europe at 4:00 ET almost correlated with the top of Wave C of the Wave 4 on EUR/USD and GBP/USD.

Thursday 1/25

2:10 EUR German Consumer Confidence 4.8 8.6 8.7
4:00 EUR German Ifo Business Climate Index http://www.forexfactory.com/images/m...mpact_high.gif 107.9 108.9 108.7
4:00 EUR German Ifo Business Expectations Index http://www.forexfactory.com/images/m...act_medium.gif 103.2 103.0 102.5
4:00 EUR Current Account http://www.forexfactory.com/images/m...impact_low.gif -2.0B 0.7B 1.8B
8:30 USD Unemployment Claims http://www.forexfactory.com/images/m...impact_low.gif 325K 310K 289K
10:00 USD Existing Home Sales http://www.forexfactory.com/images/m...act_medium.gif 6.22M 6.25M 6.27M

The economic calendar is light today with existing home sales and jobless claims due for release. Sales of previously owned homes increased for 2 months in a row, suggesting a potential bottom in the housing market. Analysts are projecting a decrease but given the trend of mortgage applications in the month of December, sales could have held steady. Jobless claims are also projected to rise but that is primarily due to the surprise improvements that we have seen over the past week. Therefore these projections are mostly based upon adjustments rather than expected deterioration in the US economy. Should these reports come out strongly, the dollar could extend its move in what is already a dollar positive environment.

The IFO survey from Germany has slipped slightly below last month’s record to 107.9. Nevertheless, the expectations index for business conditions over the next 6 months kept climbing, reassuring Eurozone bulls that the impact of the increase in value-added tax will be minimal and thus preventing a euro decline. Meanwhile, fundamentals driven pressure on the dollar resurfaced when US existing homes housing data came in at a disappointing 6.22 mln sold. As such, we return to Neutral bias on both the EURUSD and USDCHF. Thus pure technicals will move the market.

To quote another forex journalist saying the same thing:

"The dollar strengthens versus the euro and sterling after consolidating in the tight range around 1.2970 and 1.9690 respectively. The data from US this morning had limited impact on the market, and the movements in the foreign exchange market this week were mainly technical driven.

US jobless claims rose from 290k to 325k, worse than the estimate of 310k. US Existing home sales fell from an annual rate of 6.28 million units to 6.22 million in December, the biggest decline since 1989. The market will wait new home sales due tomorrow to further judge the housing market conditions of the nation.

Meanwhile, the data from the euro zone were not as good as expected with Germany IFO current assessment index fell from 115.3 to 112.8 and business climate index down from 108.7 to 107.9.

----- by Yan Xu"
  • #2,749
  • Jan 25, 2007 4:56am Jan 25, 2007 4:56am
hi itme

do u think gbp will breakout 9646.
if breakout this point 9646 it is mean the gbp will go to 9374

thanks
  • #2,750
  • Jan 25, 2007 5:04am Jan 25, 2007 5:04am
Quoting gody6000
hi itme
do u think gbp will breakout 9646.
if breakout this point 9646 it is mean the gbp will go to 9374
thanks
What makes you say the above things? Here is my prediction, incorporating a conservative target. It can go further, but it will very likely hit my conservative target:
Thursday January 25 at 3:00 ET
Trade Experiment #328 Sell GBP/USD at 1.9706
Stop is 1.9753
Target is 1.9600
  • #2,751
  • Jan 25, 2007 7:54am Jan 25, 2007 7:54am
Quoting itme
What makes you say the above things? Here is my prediction, incorporating a conservative target. It can go further, but it will very likely hit my conservative target:
Thursday January 25 at 3:00 ET
Trade Experiment #328 Sell GBP/USD at 1.9706
Stop is 1.9753
Target is 1.9600
Hi I think gu may not go that deep cause of gold rising.....
just if gold do retrace may go 1/9600 which will be a good buy....
Good work
THX
  • #2,752
  • Edited 11:47am Jan 25, 2007 8:33am | Edited 11:47am
Quoting itme
The wave count on the one hour chart was extremely clear, indicating a probable bottom of the downwards USD/CHF trend at 1.2445, which coincided with our predicted bottom at about 1.2440. It isn't that often that the wave patterns on the one minute chart are this clear.

Thursday January 25 at 3:00 ET

Trade Experiment #330 Buy USD/CHF at 1.2445

Stop is 1.2416

Target is 1.2600

__________________________________________________________

Prediction from yesterday:

Some predictions for Wednesday January 24
Wednesday January 24 at 2:30 ET

USD/CHF will likely correct down now to about 1.2440 and then proceed on upwards to about 1.2550 to 1.2600. Current price is 1.2490.

GBP/USD will correct upwards now to about 1.9725 from its current price of 1.9670 and then carry on downwards to about 1.9585.

Hi again
Wowowowow itme, we're currently totally synched
Although I hadn't read your signals I shorted 1.3000 EURUSD and 1.9730 on GBPUSD. In my theory 1.9732 was the exact top of an abc or 123 off the 1.9645 low and hence offerend a good chance to either enter a new trend or a wave 4 trade. I see 1.9630 for the current mini-wave count as target and 1.9550 roughly for some larger wave degrees. Well, basically they're all just Fib Expansions, but whaddayaknow. It's all chop chop until the next news hits anyway and they seem to like blowing stops away

I don't know if you noticed, but USDCHF is doing the same pattern as Cable. Just some days delayed. Have a look at a zoomed out 4h chart for example.
In my theory: It's currently finishing wave 4 and will do a surge up for wave 5, like cable did to almost 2.0. 1.2400-1.2420 was my theory for a kickoff. My current idea is: either it will now go to 1.2467, reverse to 1.2400-15 and kick off from there OR it will kick off right now from 1.2420.
Since the crosses have been melting I'm a bit uncertain.

I'm sorry if I'm intruding, I just was very amazed we both were looking at the same thing on USDCHF =)
Btw, you shouldn't have given up on your original GBPJPY conservative targetof 237.30, the 236.60-237.00 fib cluster and FE 100 target was hit just fine =)
You seem to have a LOT of great initial targets and ideas and - very much like myself - tend to find reasons why it might end prematurely.
I hope you as well as I can figure out how to get around that and end up letting the profits run as far as they can

Best wishes,

SeekingLight
Trust price. Know yourself.
  • #2,753
  • Jan 25, 2007 8:56am Jan 25, 2007 8:56am
i think G/U is in consolidation period today....friday we may see another low
{Link Removed}]
  • #2,754
  • Jan 25, 2007 2:32pm Jan 25, 2007 2:32pm
Quoting SeekingLight
Hi again
Wowowowow itme, we're currently totally synched
Although I hadn't read your signals I shorted 1.3000 EURUSD and 1.9730 on GBPUSD. In my theory 1.9732 was the exact top of an abc or 123 off the 1.9645 low and hence offerend a good chance to either enter a new trend or a wave 4 trade. I see 1.9630 for the current mini-wave count as target and 1.9550 roughly for some larger wave degrees. Well, basically they're all just Fib Expansions, but whaddayaknow. It's all chop chop until the next news hits anyway and they seem to like blowing stops away

I don't know if you noticed, but USDCHF is doing the same pattern as Cable. Just some days delayed. Have a look at a zoomed out 4h chart for example.
In my theory: It's currently finishing wave 4 and will do a surge up for wave 5, like cable did to almost 2.0. 1.2400-1.2420 was my theory for a kickoff. My current idea is: either it will now go to 1.2467, reverse to 1.2400-15 and kick off from there OR it will kick off right now from 1.2420.
Since the crosses have been melting I'm a bit uncertain.

I'm sorry if I'm intruding, I just was very amazed we both were looking at the same thing on USDCHF =)
Btw, you shouldn't have given up on your original GBPJPY conservative targetof 237.30, the 236.60-237.00 fib cluster and FE 100 target was hit just fine =)
You seem to have a LOT of great initial targets and ideas and - very much like myself - tend to find reasons why it might end prematurely.
I hope you as well as I can figure out how to get around that and end up letting the profits run as far as they can

Best wishes,

SeekingLight
Thanks for your comments, SeekingLight. We have alot in common. We are both truth seekers, and have found similar insights. You are right, I need to trust my initial insights more often, yet still be free to revise them when there is sufficient evidence. However, the risk is to become a nervous trader, exiting good trades before they hit their probable targets, because I am suddenly looking for more certainty than is possible.
  • #2,755
  • Jan 25, 2007 2:35pm Jan 25, 2007 2:35pm
This position trade in USD/CHF we entered January 11, 2007 is still good, waiting for some geopolitical instability to propel USD/CHF into a nosedive:

Thursday January 11, 2006 at 10:45 ET
Trade Experiment #311 Sell USD/CHF at 1.2513
Stop is 1.2586
Target is 1.1900
Risk is 77 pips
Reward is 609 pips
Reward / Risk Ratio is 7.9

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

For research purposes only.

This is an attempt to trade the third wave of Wave 3 down (see one day chart). Perhaps the Zionists or neocons will drop some nuclear bombs on Iran ( ), which will precipitate a rapid decline in USD/CHF.
__________________________________________________ _
__________________________________________________ ____

Previous predictions:

USD/CHF Wave Hypothesis for December 26, 2006 at 17:00 ET:

A downwards impulse wave since October 16, 2006 at 1.2770 is carrying USD/CHF towards 1.1450 in a few months (an 11.5% decline). This is part of a larger downtrend that began February 28, 2006 at 1.3235. At that time, employing Elliott Wave and Q System analysis, I predicted a strong downturn targetting about 1.1300, a 17% decline.

The current uptrend that began December 5, 2006 is headed to between 1.2300 and 1.2400, at which point we will be blessed by a very favorable short trading opportunity with low risk and high reward potential.

The short term current pattern is amenable to a variety of different wave interpretations, so the certainty level is low. We could see a decline from here to the 1.2100 area, as Trade Experiment #297 Sell USD/CHF at 1.2220 is predicated upon. Or we could see a rise to 1.2300

My guess is that the price of USD/CHF will rise from its current value at 1.2230 up to 1.2250, then fall to 1.2205, then rise to about 1.2300. Then it will begin its larger move down to about 1.2050, which would present a favorable trading opportunity.
  • #2,756
  • Edited 5:27pm Jan 25, 2007 4:22pm | Edited 5:27pm
It is very easy to lose a trade. Common reasons for a lost trade are:

1) Incorrect wave count (this has happened to me many times, especially with GBP/JPY and GBP/CHF)

2) Premature entry, causing stop to be hit, sometimes by only a few pips

3) Stop in wrong place

4) Error in calculating entry price, resulting in stop being hit.

5) Targeting error (target too far away)

6) Announcement that throws a wrench in the works

7) Loss of faith in original analysis, then pulling out of winning trade (this has happened several times lately)

8) Effort to exit trade and re-enter at a slightly better price, resulting in lost opportunity after one has already entered a winning trade (this has happened several times lately)

9) Several other causes that I can't think of right now, I'm sure.

Considering all the potential challenges in executing a winning trade of the kind that I am attempting (low risk / high reward), I like to highlight my successes. The recent GBP/JPY short trade was an astonishing success. If we had factored the correct bounce analysis into the equation, we might have earned over 500 pips in the past two days, and a very high rate of compounded return.

On the other hand, here is a recent humble, little successful trade on the USD/CHF which went exactly according to plan and didn't take too much time:

Wednesday January 24 at 3:30 ET
Trade Experiment #327 Sell USD/CHF at 1.2490
Stop is 1.2503
Target is 1.2440
Risk is 17 pips
Reward is 46 pips
Reward / Risk Ratio is 2.7

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

For research purposes only.

Wave hypothesis: This is the Fourth Wave correction of an uptrend according to our wave count.
  • #2,757
  • Jan 26, 2007 3:52pm Jan 26, 2007 3:52pm
GBP/USD and EUR/USD continued to fall as expected after two reports from the US showed improvements from the previous period. Durable goods orders rose 3.1% in December, up from a 2.2% reading in the previous month. New home sales increased at an annual rate of 1.12 million units, beating the forecast of 1.05 million units. The euro dipped to a session low at 1.2875 and the sterling fell to 1.9555.

Orders for big-ticket manufactured goods in the US hit a 3-month high in December. The rise was the second in a row after plunging in October. New orders for durable goods rose by 3.1 pct in December after rising a revised 2.2 pct in November. While the gain was the fastest since September, it was slightly slower than the 3.5 pct rise economists had expected. Excluding transportation goods, durable goods orders rose at the fastest pace since March, posting a 2.3 pct increase in December after falling 1.0 pct in the prior month.

Sales of new homes in the US rose 4.8 pct to 1.120 mln units in December from November's upwardly revised 1.069 mln units, the second straight month of rises, though the full year figure came in below 2005's record. Sales have fallen 11.0 pct since December 2005, when 1.259 mln units were sold. For the year, sales totaled 1.061 mln units, the second highest on record and 17.3 pct lower than 2005's record levels.

Fri. 1/26
2:00 EUR German Import Price Index m/m -0.3% 0.1% -0.4%
4:00 CHF Consumption Indicator 1.896 1.860 1.886
Tentative EUR ECB President Trichet Speaks
4:00 EUR M3 Money Supply y/y 9.7% 9.2% 9.3%
4:30 GBP Mortgage Approvals m/m http://www.forexfactory.com/images/m...impact_low.gif 45.5K 68.5K 78.7K
8:30 USD Durable Goods Orders m/m http://www.forexfactory.com/images/m...act_medium.gif 3.1% 3.2% 2.2%
8:30 USD Core Durable Goods Orders m/m http://www.forexfactory.com/images/m...mpact_high.gif 2.3% 0.5% -1.0%
10:00 USD New Home Sales http://www.forexfactory.com/images/m...mpact_high.gif 1.12M 1.05M 1.07M
  • #2,758
  • Jan 27, 2007 5:13pm Jan 27, 2007 5:13pm
Man I love thread! Keep up the great work.
  • #2,759
  • Jan 28, 2007 5:28pm Jan 28, 2007 5:28pm
LOL itme!

I see we use the same avatar... I will take that like an accomplishment!

iiivb
  • #2,760
  • Jan 28, 2007 5:42pm Jan 28, 2007 5:42pm
Quoting iiivb
LOL itme!
I see we use the same avatar... I will take that like an accomplishment!
iiivb
I wondered when you'd notice! Maybe we're now a team! The Golden Mean Team! Thanks for understanding. The picture was too nice not to use (for a while)! How goes it?
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