Low Risk, High Reward Trading Experiment

No problem itme!

I am strong follower of your system and a admirer. No problem about sharing avatar! Accomplishment here!

I have been wondering, in some post here you said that "me and another scientist..." are you a math scientist? I am really interested in how you developed your system...

Unfotunately I do not like to take tops and bottoms... my best results have been only following trends... but I would like to know someday how was your Q system developed and integrated to the Elliot Wave count...

Regards itme...

iiivb

Exit Trade Experiment #329 Sell EUR/USD at 1.2895 - 1.2900
(Profit approx. 100 pips)

Re-enter Trade Experiment #329A Sell EUR/USD (short position) if / when price rises to 1.2925.
Target after re-entry is 1.2830
Stop is 1.3002
(note - this is a continuation of the previous trade, with exit at or near the bottom of Wave 3, and re-entry at or near the top of Wave 4)

p.s. - EUR/USD has risen to 1.2965, which is 40 pips higher than our entry price 1/29 12:45 ET
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Previous Trade Experiment:

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.
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Prediction from Wednesday January 24:

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.

Sunday January 28 at 23:55 ET

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. However, the trend is now up, not down, and there is a good chance the stop will be hit today unless we exit and re-enter at a better price. Therefore exit Trade Experiment #311 Sell USD/CHF at 1.2505 at break even and re-enter when / if the price rises to 1.2590 -1.2625.
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Previous trade experiment:

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 Israelis or U.S. neocons will drop some nuclear bombs on Iran ( ), which will precipitate a rapid decline in USD/CHF.

GBP/CHF update for Monday January 29 at 00:30 ET

The current price of GBP/CHF is 2.4570. It will likely rise to 2.4645 (the top of Wave C of Wave 4) and then fall to 2.4450. Then it will begin a large upwards impulse wave.
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Last update:

GBP/CHF update for Wednesday January 24

On January 22 we predicted that GBP/CHF would reach the top of either Wave 3 or the third wave of Wave 3 at between 2.4750 and 2.4800. In fact the reversal price (top of Wave 3) was 2.4755.

Our high probability reversal values at the time were 2.4747, 2.4767, 2.4780, and 2.4800. So a short trade taken at 2.4747 could have survived with a high probability with a stop at 2.4825.

A conservative target for this trade would have been 2.4550, which would have given it a risk of 93 pips and a reward of 182, and a RRR of 2.0. The interim (and possible ultimate) actual low was 2.4518, so the trade would have succeeded. But although this trade would have succeeded, it had relatively low strategic merit (RRR<5.0).

It has subsequently completed Wave A of Wave 4 and wave a of Wave B. Wave C may or may not go lower than the bottom of Wave A. At the bottom of Wave C, wherever it is, which may be 2.4500, there may be an opportunity for a low risk / high reward trade up to the top of the trend at 2.4800 or higher.

p.s. - GBP/CHF has fallen to a new low of 2.4500, forming a possible mishapen A-B-C upwards and a 1-2-3 of a Wave C down, and part of a wave 4 up. It is generally range bound between 2.4500 and 2.4600.

Monday January 29 at 00:30 ET

Trade Experiment #331 Sell GBP/USD at 1.9610

Stop is 1.9655

Target is 1.9530

Risk is 49 pips

Reward is 76 pips

Reward / Risk Ratio is 1.5

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

For research purposes only.

The wave hypothesis is that we are in the last small wave down (wave 5 of wave C) of a Wave 2 (A-B-C) down. Following this we expect a Wave 3 upwards of a final Wave 5 up of an even larger upwards trend. This is not a great trade, unless the accuracy of entry can be improved, because of a relatively low RRR.

p.s. - when some good news for the UK economy, considered an important indicator, was released at 6:00 ET, instead of rising, the price of GBP/USD dropped 40 pips. Just now, at 12:00 ET, the price rose to 1.9609/10 to trigger the entry for this trade

The CBI retail survey remained firm with a reading of +30 in January from +25, but only part of the survey was taken after the interest rate increase.

Mon. 1/29
6:00 GBP CBI Distributive Trades Realized http://www.forexfactory.com/images/m...mpact_high.gif 30 18 25 http://www.forexfactory.com/images/m...l_analysis.gif

lol Itme, did you follow my avatar last time before changing to this? Just curious.
Btw, what wave are you trying to ride with your last trade experiment on cable? Thanks, and keep up the good work!

hi , i am new to forex trading...

i seen that your trading signal has generated many winning trades...

do you have any recent trading signal for current market?

pls let me know

thanks

Hi Itme, I, too, would be interested in hearing your wavecount on this / which wave you're attempting to trade in this signal.
I'm still on the ABC after completion of a Wave 5 theory, alternatively we might be in a wave 2 after a 1.....well, either way, inside a corrective wave down, FE 100 for normal Wave C being 1.9460, failed / weak Wave C was where we just paused at 1.9566 in my count.
Either a normal C should be reached, i.e. lower than the last low, like your signal, or we resume the move up. I'm currently a bit unsure, as I don't really know where in a higher count we are...hence asking about your count

Regards,

SeekingLight

Yes, Traex, I also pirated your avatar, because it is so beautiful and apropros to what we are up to. Here is my wave hypothesis on GBP/USD right now. From practise I have learnt to come up with possible wave hypotheses, judge the likelihood of them being true, and then think strategically (logically, considering various hypotheses and probabilities). Then I look for situations with a better than 50% probability of going the way my trade assumes.

The wave hypothesis is that we are in the last small wave down (wave 5 of wave C) of a Wave 2 (A-B-C) down. Following this we expect a Wave 3 upwards of a final Wave 5 up of an even larger upwards trend. This is not a great trade, unless the accuracy of entry can be improved, because of a relatively low RRR.

First of all, if you want trade signals, there are dozens of much better places to look than this thread - I recommend researching professional signal services and finding a good one. I think that all newbies should do that while they are learning to trade, which will probably take about 20 years as far as I can tell (maybe I'm just tired). Next, there are no big opportunities right now to get in near the beginning of a long, fast trend, that I know of.

do you think the the markets will be relatively quiet due to the big wednesday thursday and friday news releases. I want to trade so bad today i thought about attending an AA meeting. Markets are very slow today.

Monday January 29 at 11:45 ET

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. However, the trend is now up, not down, and there is a good chance the stop will be hit today unless we exit and re-enter at a better price. Therefore exit Trade Experiment #311 Sell USD/CHF at 1.2532 with a 25 pip loss and re-enter when / if the price rises to 1.2590 -1.2625. We hoped earlier that the price might fall to 1.2505, but that doesn't seem likely any more, based on the wave pattern.

The current price is 1.2537

p.s. - a few minutes after modifying the target from 1.2505 to 1.2532, the price quickly dropped to 1.2510

p.p.s - On January 30 at 8:45 the price of USD/CHF fell to 1.2499
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Previous trade experiment:

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 Israelis or U.S. neocons will drop some nuclear bombs on Iran ( ), which will precipitate a rapid decline in USD/CHF.

Monday January 29 at 1:30 ET

Regarding Trade Experiment #325A Buy USD/JPY, USD/JPY descended more than expected, to 120.20, thus triggering our stop which was placed at 120.69. USD/JPY subsequently rose to hit our target at 122.00, and appears poised to rise higher, to about 122.50, where there will be a potential low risk / high reward trade opportunity to short USD/JPY.

The current price is 121.92 .
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Previous trade experiment:

Exit Trade Experiment #325 Buy USD/JPY at 121.40 and re-enter at 121.00

Monday January 23 at 11:00 ET

Exit Trade Experiment #325 Buy USD/JPY at 121.40 (or higher) to take min. 7 pips profit and re-enter long position at 121.00

Stop is 120.69

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Previous trade experiment:

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 29 at 1:30 ET

USD/CAD is likely rising to between 1.1874 and 1.2000, at which point we may have a good low risk / high reward trading opportunity.

The current price is 1.1825

Tuesday January 30 at 2:30 ET

Trade Experiment #331A Sell GBP/USD at 1.9673

Stop is 1.9711

Target is 1.9530

Risk is 42 pips

Reward is 139 pips

Reward / Risk Ratio is 3.3

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

For research purposes only.

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Previous Trade Experiment (stopped out):

Monday January 29 at 00:30 ET

Trade Experiment #331 Sell GBP/USD at 1.9610
Stop is 1.9655
Target is 1.9530
Risk is 49 pips
Reward is 76 pips
Reward / Risk Ratio is 1.5

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

For research purposes only.

The wave hypothesis is that we are in the last small wave down (wave 5 of wave C) of a Wave 2 (A-B-C) down. Following this we expect a Wave 3 upwards of a final Wave 5 up of an even larger upwards trend. This is not a great trade, unless the accuracy of entry can be improved, because of a relatively low RRR.

p.s. - when some good news for the UK economy, considered an important indicator, was released at 6:00 ET, instead of rising, the price of GBP/USD dropped 40 pips. Just now, at 12:00 ET, the price rose to 1.9609/10 to trigger the entry for this trade

The CBI retail survey remained firm with a reading of +30 in January from +25, but only part of the survey was taken after the interest rate increase.

Mon. 1/29
6:00 GBP CBI Distributive Trades Realized http://www.forexfactory.com/images/m...mpact_high.gif 30 18 25 http://www.forexfactory.com/images/m...l_analysis.gif

Tuesday January 30 at 5:00 ET

Exit Trade Experiment #331A Sell GBP/USD at the price of 1.9640 and re-enter short position at the top of wave 5 at about 1.9690 - 1.9700

p.s. - In accordance to our new ultra-conservative strategy, we exited this trade with about 30 pips profit in anticipation of either 1) a fifth minor upwards wave up to a new high, or alternatively a second top, or 2) a wave B bounce on an A-B-C Wave 2 downwards wave.

We favored the notion that we were in a Wave 2 downtrend targeting 1.9530 when we entered the trade, but could tell by the wave pattern that at least a substantial correction was due to occur at the time we exited, which would permit us to re-enter the short trade at a better price. In fact, the price did bounce from 1.9636 up to 1.9666 and then fell and rose a second time to 1.9664. We were not monitoring the market at that time, but if we had been we would have recognised the pattern of a Wave 2 downtrend and re-entered a short position with our original stop and target. Since then the price has dropped to 1.9600, and shows signs of further decline, perhaps to 1.9530 - 1.9580 .
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Previous Trade Experiment:

Tuesday January 30 at 2:30 ET
Trade Experiment #331A Sell GBP/USD at 1.9673
Stop is 1.9711
Target is 1.9530
Risk is 42 pips
Reward is 139 pips
Reward / Risk Ratio is 3.3

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

For research purposes only.

hi item,
Pls help me since i am not good at english while i am reading elliott book, but the translation is not very good.
i want to know is that motive wave = impluse wave? coz i am reading chinese eillott book says that motive wave are not equal to impluse wave, but when i read your link " the basic of eillott theory" move and impluse are the same!
and also while in correction of ABC, usually how many percentage will it retrace? because when i read the book, it says wave 2 usually retrace 50 to 78%, and wave 4 usually retrace 38.2 - 50%, but did not mention the correction of ABC after Wave 5!
pls help me and thank you very much!

Target of 1.9530 Hit for Trade Experiment #331A - Sell GBPUSD at 1.9673

Trade Experiment #331A Sell GBP/USD at 1.9640 hit its target of 1.9530 at 9:00 ET January 31, 2007. The ultimate low was 1.9480, the October 16 trendline, 50 pips lower than the target.

The unaugmented (not factoring the increase of RRR (Reward / Risk Ratio) from the strategic Wave 4 exit / re-entry) is 3.3:1. The augmented effective RRR factoring in the exit / re-enter strategy is 7.1:1. Note that we temporarily exited this short trade at exactly the correct price in anticipation of either a Wave 4 bounce or a rise to a new high, but failed to issue a re-entry instruction because we were not monitoring the currency at the time, though it formed a clear A-B-C Wave 4 pattern that would have clearly signaled a re-entry 30 pips higher than our temporary exit price:

Previous Trade Experiment:

Exit Trade Experiment #331A Sell GBP/USD at 1.9640

Tuesday January 30 at 5:00 ET

Exit Trade Experiment #331A Sell GBP/USD at the price of 1.9640 and re-enter short position at the top of wave 5 at about 1.9690 - 1.9700

p.s. - In accordance to our new ultra-conservative strategy, we exited this trade with about 30 pips profit in anticipation of either 1) a fifth minor upwards wave up to a new high, or alternatively a second top, or 2) a wave B bounce on an A-B-C Wave 2 downwards wave.

We favored the notion that we were in a Wave 2 downtrend targeting 1.9530 when we entered the trade, but could tell by the wave pattern that at least a substantial correction was due to occur at the time we exited, which would permit us to re-enter the short trade at a better price. In fact, the price did bounce from 1.9636 up to 1.9666 and then fell and rose a second time to 1.9664. We were not monitoring the market at that time, but if we had been we would have recognised the pattern of a Wave 2 downtrend and re-entered a short position with our original stop and target. Since then the price has dropped to 1.9600, and shows signs of further decline, perhaps to 1.9530 - 1.9580 .
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Previous Trade Experiment:

Tuesday January 30 at 2:30 ET
Trade Experiment #331A Sell GBP/USD at 1.9673
Stop is 1.9711
Target is 1.9530
Risk is 42 pips
Reward is 139 pips
Reward / Risk Ratio is 3.3

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

For research purposes only.

Wednesday January 31 at 11:00 ET

Trade Experiment #332 Sell GBP/USD at 1.9636

Stop is 1.9686

Target is 1.9480 - 1.9425

Risk is 54 pips

Reward is min. 152 pips

Reward / Risk Ratio is min. 2.8

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

For research purposes only.

p.s. - our short term wave count was wrong, and GBPUSD went up one more time, very abruptly (64 pips in 3 minutes), to an interim high of 1.9669 at 14:20 ET, fortunately short of our stop (so far at least). This jump in GBP/USD coincided in time with the FOMC rate decision announcement, which was apparently USD bearish:

FOMC Statement Analysis: FOMC upgrades its view on growth, saying that recent indicators have suggested somewhat firmer growth with signs of stabilization in the housing market. On inflation, the FOMC tempered its language saying that recent readings on core inflation have improved modestly in recent months, while last time the FOMC wrote that "reading on core inflation have been elevated."

- FOMC maintains its hiking bias in stating that the extent and timing of any additional firming that may be needed depends on the inflation and economic outlook.
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Previous preditions:

Some predictions for Wednesday January 24

Wednesday January 24 at 14:30 ET

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.
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What it did: GBP/USD corrected upwards to 1.9733 from its then current price of 1.9670 and then carried on downwards to 1.9548, 37 pips lower than predicted, then up to 1.9696, where we sold it again, and then on down to its recent low at 1.9481, which may or may not be its ultimate low for this midrange trend.

Wed. 1/31
0:00 JPY Housing Starts y/y 10.2% 9.0% 4.0%
2:00 EUR German Retail Sales m/m 2.4% 1.2% -0.7%
3:55 EUR German Unemployment Rate 9.5% 9.7% 9.8%
5:00 EUR CPI y/y (p) 1.9% 2.1% 1.9%
5:30 CHF KOF Leading Index m/m 1.71 1.55 1.75
5:30 GBP Consumer Confidence -7 -8 -8
8:15 USD ADP Nonfarm Employment Change http://www.forexfactory.com/images/m...mpact_high.gif 152K 135K -40K
8:30 USD GDP Annualized q/q (p) http://www.forexfactory.com/images/m...mpact_high.gif 3.5% 3.0% 2.0%
8:30 USD GDP Deflator Annualized q/q (p) http://www.forexfactory.com/images/m...mpact_high.gif 1.5% 1.7% 1.9%
8:30 USD ECI q/q 0.8% 1.0% 1.0%
8:30 CAD GDP m/m 0.2% 0.3% 0.0%
9:45 USD Chicago PMI http://www.forexfactory.com/images/m...mpact_high.gif 48.8 52.0 51.6
10:00 USD Construction Spending m/m -0.4% -0.1% -0.2%
10:30 USD Crude Oil Inventories 2.7M 0.7M
14:15 USD Interest Rate Statement http://www.forexfactory.com/images/m...mpact_high.gif 5.25% 5.25% 5.25%

"A barrage of incoming economic data has taken the currency markets on a rollercoaster ride in the European and US trading sessions. Retail sales and unemployment rate from Germany beat the market expectations but were subsequently negated by a sub-2.0% CPI data from the Eurozone. Meanwhile, the US side gave the dollar an initial push following stronger than expected 1st Q4 GDP reading that came in well above consensus estimates at 3.5%. However, the low inflation component tempered the initial dollar bullishness with sentiment turning against USD after the Chicago PMI figure came in below the neutral 50 level, signaling manufacturing contraction."

-- FFAN Analyst
FOMC Statement Analysis: FOMC upgrades its view on growth, saying that recent indicators have suggested somewhat firmer growth with signs of stabilization in the housing market. On inflation, the FOMC tempered its language saying that recent readings on core inflation have improved modestly in recent months, while last time the FOMC wrote that "reading on core inflation have been elevated."

- FOMC maintains its hiking bias in stating that the extent and timing of any additional firming that may be needed depends on the inflation and economic outlook.