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Low Risk, High Reward Trading Experiment

  • #2,821
  • Feb 3, 2007 1:09am Feb 3, 2007 1:09am
Saturday February 3 at 2:00 ET

USD/JPY rose yesterday to 121.35 propelled by the US non-farm payrolls volatility. It then sank to 120.93 in either a wave 4 of an upwards wave or a wave 1 of a downwards wave. Either way, we expect a rise to about 121.30 - 121.50 over the next day or two, followed by a fall of about 150 pips to 119.80. If the correct configuration emerges in the entry price zone at about 121.30 - 121.50, a low risk / high reward trade opportunity could emerge.
  • #2,822
  • Feb 3, 2007 2:13am Feb 3, 2007 2:13am
Saturday February 3 at 2:00 ET

The current price of GBP/JPY is 238.05. It should fall to about 237.85 then rise to complete the wave 5 (at about 239.00) of the Wave C of the Wave 4 of the larger downwards Wave C of the very large downwards WAVE 4.

Then GBP/JPY will drop in a fifth wave of the C Wave approximately 465 pips from 239.00 to 234.35.
_________________________________________________________
_________________________________________________________
Previous Trade Experiment:

Modify Entry Price for GBP/JPY impending short trade
Friday February 2 at 0:00 ET
Change entry price for Trade Experiment #335 Sell GBP/JPY at 237.80 to 238.30 from 237.80.
Change stop to 239.11.
New risk is 90 pips
New reward is 246 pips
New RRR is 2.7

For research purposes only.

Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4. (Traex, I see a 1-2-3 where you see 1-2-3-4-5, but it's messy!)
  • #2,823
  • Feb 3, 2007 4:04pm Feb 3, 2007 4:04pm
[quote=itme;206612]Saturday February 3 at 2:00 ET

The current price of GBP/JPY is 238.05. It should fall to about 237.85 then rise to complete the wave 5 (at about 239.00) of the Wave C of the Wave 4 of the larger downwards Wave C of the very large downwards WAVE 4.

Then GBP/JPY will drop in a fifth wave of the C Wave approximately 465 pips from 239.00 to 234.35.





ITME:

In approximately what timeframe do you expect this to happen?

thanks
  • #2,824
  • Feb 4, 2007 12:54am Feb 4, 2007 12:54am
Quoting itme
Saturday February 3 at 2:00 ET

The current price of GBP/JPY is 238.05. It should fall to about 237.85 then rise to complete the wave 5 (at about 239.00) of the Wave C of the Wave 4 of the larger downwards Wave C of the very large downwards WAVE 4.

Then GBP/JPY will drop in a fifth wave of the C Wave approximately 465 pips from 239.00 to 234.35.
_________________________________________________________
_________________________________________________________
Previous Trade Experiment:

Modify Entry Price for GBP/JPY impending short tradeFriday February 2 at 0:00 ET
Change entry price for Trade Experiment #335 Sell GBP/JPY at 237.80 to 238.30 from 237.80.
Change stop to 239.11.
New risk is 90 pips
New reward is 246 pips
New RRR is 2.7

For research purposes only.

Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4. (Traex, I see a 1-2-3 where you see 1-2-3-4-5, but it's messy!)
i think 234.70 will be next support and this is my target . How is your view on UJ? can go below 119?
{Link Removed}]
  • #2,825
  • Feb 4, 2007 2:46pm Feb 4, 2007 2:46pm
Quoting kenari05
i think 234.70 will be next support and this is my target . How is your view on UJ? can go below 119?
Hi Kenari05. I see that we substantially agree on the GBP/JPY lower target. Note that my targets are approximate, conservative estimates. As we approach them the greater information available can allow us to firm up our estimates. (Please make explicit reference to the currency pair when throwing out numbers, in order to avoid confusion.)

I put forth my opinion about USD/JPY a few posts above. Yes, the price can always go further than we state, if the fundamentals provide the needed strength and momentum to the trend. On the other hand, the injection of new energy into the market in the form of news and events can ameliorate the strength of a trend also, and cause a wave to stop short of its normal target.
  • #2,826
  • Edited 7:10pm Feb 4, 2007 6:44pm | Edited 7:10pm
My analytic models indicate that EUR/USD will trace out the following movements over the coming year(s):

The current price of EURUSD is 1.2960

We predict a rise in a A-B-C pattern to about 1.2975 - 1.3000 (wave 2 up) today followed by a downwards wave 3, 4 and 5 constituting a Wave C with a target of 1.2790 to 1.2850.

Then we expect a strong rise to 1.3800 to 1.3830 for a fifth wave of a Wave "c" of a large upwards Wave B.

Following this will come a prolonged downwards trend which is called a large Wave C with a 5 wave structure targeting about 1.1500 to 1.2500, which could take about 1 year.

Following this we expect a strong rise in the largest scale WAVE FIVE with a target of about 1.5000 to 1.6500.
  • #2,827
  • Feb 4, 2007 7:10pm Feb 4, 2007 7:10pm
USD/CAD is predicted to rise to about 1.1900 (after it falls somewhat from its current price of 1.1850) which will be the ultimate top of a long upwards A-B-C trend since May 31, 2006. For the coming months it will be trending downwards.
  • #2,828
  • Feb 5, 2007 3:10am Feb 5, 2007 3:10am
Quoting itme
USD/CAD is predicted to rise to about 1.1900 (after it falls somewhat from its current price of 1.1850) which will be the ultimate top of a long upwards A-B-C trend since May 31, 2006. For the coming months it will be trending downwards.

Hi itme, hope you got through the weekend ok
I just spotted a similiar setup on NZDUSD that I saw too late(ABC off the high with a normal FE 100 C) and should already be unfolding. Shame.

I agree with USDCAD about to reach an extended C, completing an ABC off the low and offering a potential low risk/high reward setup. I will however first confirm a reversal by looking at price behavior / whether there is a setup on the 4h or daily before entering. Strong C end is about 1.1888 here and usually there's a +-25 pip overshoot chance it'd seem, so you're spot on

Since oil has risen quite a bit lately, I'm waiting for this to sink in and to enact this expected reversal, so let's see what is to come =)


Keep up the good work =)

Best regards,

SeekingLight
Trust price. Know yourself.
  • #2,829
  • Feb 5, 2007 11:44am Feb 5, 2007 11:44am
Mon. 2/5
3:55am EUR German Services PMI 58.3 57.1 57.6
4:00am EUR Services PMI 57.9 56.8 57.2
4:30am GBP Services PMI 59.2 60.0 60.6

10:00am USD ISM Non-Manufacturing Index http://www.forexfactory.com/images/m...mpact_high.gif 59.0 56.8 57.1
10:00am USD ISM Non-Manufacturing Prices http://www.forexfactory.com/images/m...act_medium.gif 55.2 58.0 59.1

10:00am CAD Ivey PMI http://www.forexfactory.com/images/m...act_medium.gif 53.8 52.0 49.4
  • #2,830
  • Feb 5, 2007 4:23pm Feb 5, 2007 4:23pm
Quoting itme
My analytic models indicate that EUR/USD will trace out the following movements over the coming year(s):

The current price of EURUSD is 1.2960

We predict a rise in a A-B-C pattern to about 1.2975 - 1.3000 (wave 2 up) today followed by a downwards wave 3, 4 and 5 constituting a Wave C with a target of 1.2790 to 1.2850.

Then we expect a strong rise to 1.3800 to 1.3830 for a fifth wave of a Wave "c" of a large upwards Wave B.

Following this will come a prolonged downwards trend which is called a large Wave C with a 5 wave structure targeting about 1.1500 to 1.2500, which could take about 1 year.

Following this we expect a strong rise in the largest scale WAVE FIVE with a target of about 1.5000 to 1.6500.
good job. i agree
{Link Removed}]
  • #2,831
  • Edited Feb 7, 2007 2:10am Feb 6, 2007 4:43am | Edited Feb 7, 2007 2:10am
Tuesday February 6 at 5:00 ET

Trade Experiment #337 Sell GBP/USD at 1.9670

Stop is 1.9706

Target is 1.9500
Risk is 40 pips

Reward is 166 pips

RRR is 4.2 to 1

For research purposes only.

Wave hypothesis : GBPUSD is expected to move in Wave 5 down of a larger Wave C of an even larger Wave 4.

p.s. - After our entry at 1.9670 the price fell to 1.9650. This would have been a good time to possibly adjust the stop to Break Even, in case there would be another wave up. There was another wave up, and at 8:25 on February 6 the price rose to 1.9705, 1 pip short of our stop. There was another high probability reversal value at about 1.9700, which is why we placed our stop 6 pips higher. In actuality, we really should have placed it at 1.9716, but we were being over-confident that we had already found the top of the Wave C based on wave proportions, wave count, etc. If we are very lucky this trade experiment may be successful, by a hair's breadth.

p.p.s - GBPUSD apparently completed one more pulse upwards in the form of a 5 wave pattern on the one minute chart reaching a new high of 1.9717, taking out our stop in the process. The new high of 1.9717 would have been a good re-entry price. A price rise to about 1.9710 will provide another re-entry opportunity. The stop should be 1.9761. Target is 1.9500.
  • #2,832
  • Edited 6:02am Feb 6, 2007 5:49am | Edited 6:02am
I was hoping for that GBPUSD reversal as well, got stopped out. Currently I'm waiting to see whether it will got to the strong C at 1.9720 (to complete a wave 4 correction up of the larger C down of the even larger wave 4 down)and what will happen there. If we turn back around here all the better, but I'm starting to worry about cable's 4.C down.

I've also tried to catch the end of wave 4 of the large C down of EURJPY to get in on wave 5 down. Currently waiting for 155.50 to go to confirm this count. Attaching picture of how I saw it at the time.

The theory behind this entry is an "isolation approach". The idea is that waves 2 and 4 can be simple and end at FE 100 most of the time. I've seen them end at FE 61.8 a few times, too, but the gist is that if you get a low/high and then a smaller abc to form a corrective wave AND some sort of price confirmation, then it's an ok idea to try for a setup to catch either a wave 3 or 5 next. Idea is by Steve Griffith, creator of MT Predictor and it's not too stupid if you ask me as you don't NEED to know where you are in a larger count if you go by 1. likely endpoint hit 2. price setup 3. price moves as you expect it.
Attached Image
Trust price. Know yourself.
  • #2,833
  • Feb 6, 2007 10:04am Feb 6, 2007 10:04am
any new thoughts on the wave counts for this pair?
  • #2,834
  • Edited Feb 7, 2007 2:04am Feb 6, 2007 10:58am | Edited Feb 7, 2007 2:04am
Tuesday February 6 at 11:45 ET

Trade Experiment #338 Sell EUR/USD at 1.2963

Stop is 1.2983

Target is 1.2850
Risk is 23 pips

Reward is 110 pips

RRR is 4.8 to 1

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

For research purposes only.

 EURUSD Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4.

p.s. - EUR/USD rose in another impulse wave to 1.2989 at 13.30 ET on February 6, hitting the stop.
  • #2,835
  • Edited 2:39pm Feb 6, 2007 12:08pm | Edited 2:39pm
Tuesday February 6 at 13:00 ET

Update on Trade Experiment #335 Sell GBP/JPY at 238.30

The high reached for GBP/JPY on February 2 was 238.79, above our short entry price but below our stop at 239.11. The price then dropped as expected to 235.38 on February 5, just 13 pips short of our target at 235.25.
If we had been monitoring the trade we would have exited GBP/JPY here at the bottom of Wave 3, at a high probability reversal value, and re-entered at the top of Wave 4 at the recent high of 237.30, which is 192 pips higher. This strategy would have dramatically increased the RRR of this trade experiment. The current price of GBP/JPY is 236.85. The price should now proceed down to about 235.00 to finish the downtrend.
___________________________________________
___________________________________________

Previous wave experiment:

Modify Entry Price for GBP/JPY impending short trade
Friday February 2 at 0:00 ET
Change entry price for Trade Experiment #335 Sell GBP/JPY at 237.80 to 238.30 from 237.80.
Change stop to 239.11.
New risk is 90 pips
New reward is 246 pips
New RRR is 2.7

For research purposes only.

GBPJPY Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4. (Traex, I see a 1-2-3 where you see 1-2-3-4-5, but it's messy!)
__________________________________________________ __
__________________________________________________ __
Previous Trade Experiment:

Thursday February 1 at 14:15 ET

As SeekingLight asserts above, GBP/JPY has seemingly completed an upwards fourth wave correction.

 Trade Experiment #335 Sell GBP/JPY at 237.80
Stop is 238.26
Target is 235.25
Risk is 55 pips
Reward is min. 246 pips
Reward / Risk Ratio is min. 4.5

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

For research purposes only.

Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4.
  • #2,836
  • Edited 3:10pm Feb 6, 2007 12:47pm | Edited 3:10pm
Tuesday February 6 at 13:45 ET

Re-enter Trade Experiment #338A Sell EUR/USD at 1.2963 at the higher price of 1.2988

Because the stop on Trade Experiment #338 was very small and we entered prematurely, we were stopped out. This second attempt has a better chance of success. The time of day (later in the New York session) is also on our side.

Stop is 1.3012

 Target is 1.2850
Risk is 27 pips

Reward is 135 pips

RRR is 5.0 to 1

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

For research purposes only.
_______________________________
_______________________________

Previous Trade Experiment:

Tuesday February 6 at 11:45 ET
Trade Experiment #338 Sell EUR/USD at 1.2963
Stop is 1.2983
Target is 1.2850
 Risk is 23 pips
Reward is 110 pips
RRR is 4.8 to 1

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

For research purposes only.

 EURUSD Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4.
  • #2,837
  • Edited 3:00pm Feb 6, 2007 2:19pm | Edited 3:00pm
Tuesday February 6 at 15:00 ET

GBPUSD apparently completed one more pulse upwards in the form of a 5 wave pattern on the one minute chart reaching a new high of 1.9717, taking out our stop in the process. The new high of 1.9717 would have been a good re-entry price. A price rise to about 1.9710 will provide another re-entry opportunity. The wave pattern suggests the possibility that there may be one more wave up to a double top (failed 5th wave) or to a new high, so we may exit this trade at the bottom of either a possible A-B-C pattern, or 1-2-3 pattern and then re-enter our short position to either catch the new high or to re-enter at the top of wave 4.

 Trade Experiment #337A Sell GBP/USD at 1.9710

Stop is 1.9761

 Target is 1.9500

 Risk is 55 pips

Reward is 206 pips

RRR is 3.7 to 1

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

For research purposes only.
___________________________________________
___________________________________________

 Previous trade experiment:

Tuesday February 6 at 5:00 ET
Trade Experiment #337 Sell GBP/USD at 1.9670
Stop is 1.9706
Target is 1.9500
 Risk is 40 pips
Reward is 166 pips
RRR is 4.2 to 1

For research purposes only.

Wave hypothesis : Wave 5 down of a larger Wave C of an even larger Wave 4.

p.s. - After our entry at 1.9670 the price fell to 1.9650. This would have been a good time to possibly adjust the stop to Break Even, in case there would be another wave up. There was another wave up, and at 8:25 on February 6 the price rose to 1.9705, 1 pip short of our stop. There was another high probability reversal value at about 1.9700, which is why we placed our stop 6 pips higher. In actuality, we really should have placed it at 1.9716, but we were being over-confident that we had already found the top of the Wave C based on wave proportions, wave count, etc. If we are very lucky this trade experiment may be successful, by a hair's breadth.

p.p.s - GBPUSD apparently completed one more pulse upwards in the form of a 5 wave pattern on the one minute chart reaching a new high of 1.9717, taking out our stop in the process. The new high of 1.9717 would have been a good re-entry price. A price rise to about 1.9710 will provide another re-entry opportunity. The stop should be 1.9761. Target is 1.9500.
  • #2,838
  • Edited 6:27pm Feb 6, 2007 2:50pm | Edited 6:27pm
Tuesday 2/6

0:00 JPY Leading Index m/m 25.0% 25.0% 18.2%

5:00 EUR Retail Sales m/m 0.3% 1.0% 0.5%

6:00 GBP BRC Retail Sales y/y http://www.forexfactory.com/images/m...act_medium.gif 3.1% 2.0% 2.5%

6:00 EUR German Factory Orders m/m -0.2% 0.5% 0.8%R

8:30 CAD Building Permits -7.8% -2.0% 2.6%R

13:00 USD Chicago Fed President Moskow Speaks http://www.forexfactory.com/images/m...act_medium.gif

13:30 USD Fed Chairman Bernanke Speaks http://www.forexfactory.com/images/m...mpact_high.gif

15:30 USD San Francisco Fed President Yellen Speaks

17:30 AUD Interest Rate Statement http://www.forexfactory.com/images/m...act_medium.gif 6.25% 6.25% 6.25%

19:01 GBP Consumer Confidence Index http://www.forexfactory.com/images/m...act_medium.gif 84 85 83
  • #2,839
  • Feb 7, 2007 6:51am Feb 7, 2007 6:51am
Hi,

is it ok if I post another chart into your thread?

Just am a bit confused whether we might be finishing up a "b" of an abc correction or whether it's not even allowed to have a 5 wave part c of the b correction...I'm currently curious whether you have any reversal spot in the area between the two fibs I marked in the chart as well or whether price is simply going to move above 1.9750-1.9830 and not stop....
I don't expect the actual move to happen too soon, but the BOE tomorrow might bring it on at the latest....or maybe we go up today for completion of the fifth subwave and then hang around a bit and get pushed for good tomorrow...

What's your take on this?
If I should stop posting into your journal just let me know, I don't want to intrude.

Kind regards,

SeekingLight
Attached Image
Trust price. Know yourself.
  • #2,840
  • Feb 7, 2007 9:38am Feb 7, 2007 9:38am
The recent high for EUR/USD of 1.3015 is consistent with my EUR/USD prediction from February 4:
_______________________________

Previous prediction:

02-04-07, 19:44

EUR/USD prediction, including long range range predictions

My analytic models indicate that EUR/USD will trace out the following movements over the coming year(s):

The current price of EURUSD is 1.2960

We predict a rise in a A-B-C pattern to about 1.2975 - 1.3000 (wave 2 up) today followed by a downwards wave 3, 4 and 5 constituting a Wave C with a target of 1.2790 to 1.2850.

Then we expect a strong rise to 1.3800 to 1.3830 for a fifth wave of a Wave "c" of a large upwards Wave B.

Following this will come a prolonged downwards trend which is called a large Wave C with a 5 wave structure targeting about 1.1500 to 1.2500, which could take about 1 year.

Following this we expect a strong rise in the largest scale WAVE FIVE with a target of about 1.5000 to 1.6500.
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