Low Risk, High Reward Trading Experiment

Tuesday February 13 at 8:45 ET

Trade Experiment #341 Sell EUR/USD at 1.3040

Stop is 1.3071

Target is 1.2900

Risk is 34 pips

Reward is 137 pips

RRR is 4.0 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down. The recent high of 1.3043 may not be the ultimate top of this upwards trend - only the top of upwards Wave 3. We may need to exit at the bottom of a downwards either Wave 4 or Wave 3.

Why EUR/USD rose strongly today: The euro gained after several indicators from Germany showed the economic growth unexpectedly accelerated, raising expectations for a March rate hike by the European Central Bank.

German GDP surprisingly expanded at a quarterly rate of 0.9% in the fourth quarter, faster than the pace of 0.6% in the previous quarter. Germany ZEW economic sentiment index rose from -3.6 to +2.9 in February, the first positive reading since July. The current conditions in this ZEW survey also came in higher than forecast unexpectedly, up from 70.6 to 70.9. Following these strong economic data, the EUR/USD rose from 1.2960 to 1.3043 versus the dollar.

Meanwhile, the dollar fell slightly across the board after a report showed US trade deficit widened from 58.2 billion to 61.2 billion in December.

p.s - a continued upwards trend throughout the day which has spiked twice up to 1.3055 places our stop in jeopardy. Traders may want to consider moving their stop north a bit.

Tuesday February 13 at 9:00 ET

Following the last temporary exit signal (at what we assumed was the bottom of Wave 3), EUR/CAD bounced 63 pips from 1.5231 up to 1.5294. (The reversal point was 13 pips lower than the system derived exit point.)

The astute trader would have noted the horizontal consolidation channel and waited for about 10 hours of consolidation to re-enter the EUR/CAD short position after the second rise of price. After re-selling EUR/CAD at about 1.5290 (the top of Wave 4) the price dropped again and formed a five wave pattern making a new low 135 pips lower at 1.5155, quite close to our target. This is presumed to be the bottom of Wave 5.

From there EUR/CAD bounced again 115 pips in an upwards A-B-C pattern, presumed to be Wave B, up to a recent high at 1.5270. This point which was reached after a spike caused by the poor US Trade data release this morning was a good re-entry point to short EURCAD to continue the downwards trade, trading a downwards Wave C to our conservative target of 1.5100.
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Previous Trade Experiments:

Temporarily exit Trade Experiment #339 Sell EUR/CAD at 1.5444

Friday February 9 at 12:30 ET

EUR/CAD fell strongly as predicted, as both EUR/USD and USD/CAD fell at the same time. The wave pattern and time of day suggests that there will be a sizeable bounce at about this time. USD/CAD fell strongly today 150 pips today in a 1-2-3 pattern, and is now due for a largish Wave 4 correction upwards, which will cause EUR/CAD to rise also.

Therefore exit Trade Experiment #339 Sell EUR/CAD at 1.5444 at the present price of about 1.5250 to consolidate about 190 pips of profit.

Re-enter EURCAD at the top of an A-B-C Wave 4 upwards correction.
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Previous Trade Experiment:

Thursday February 8 at 9:00 ET

Re-entry opportunity for Trade Experiment #339 Sell EUR/CAD at 1.5444

Stop is 1.5484
Target is 1.5100
Risk is 49 pips
Reward is 335 pips
RRR is 6.8 to 1

Wave hypothesis : This is the top of a large Wave B or a large Wave 2, and thus the beginning of a new large 5 wave trend.

p.s. - bring stop down to 1.5471 from 1.5484. The price could rise to 1.5500 later. The current price is 1.5440. The highest price reached today is 1.5470.
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Wednesday February 7 at 11:00 ET

Trade Experiment #339 Sell EUR/CAD at 1.5420
Stop is 1.5461
Target is 1.5100
Risk is 50 pips
Reward is 310 pips
RRR is 6.0 to 1

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

For research purposes only.

Wave hypothesis : This is the top of a large Wave B or a large Wave 2, and thus the beginning of a new large 5 wave trend.

Tuesday February 13 at 9:00 ET

Trade Experiment #342 Sell NZD/USD at .6880

Stop is .6921

Target is .6760

Risk is 45 pips

Reward is 136 pips

RRR is 3.0 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.

p.s - a continued upwards trend throughout the day which has risen twice up to .6912 places our stop in jeopardy. Traders may want to consider moving their stop north a bit. - perhaps to .6931 from .6921.

Since the last update which reported a rise to .6891 and a fall to .6801 NZD/USD has risen again as originally predicted to 1.6912. This has given us a second chance to exit with about 110 pips of profit.

There may be one more small pulse up before a sizeable correction.
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Update on Trade Experiment #336 Buy NZD/USD at .6800

Friday February 9 at 12:30 ET

On February 7 at 22:00 ET the price of NZD/USD rose 91 pips from our entry price of .6800 to .6891, forming a very clear 5 wave pattern, and reaching a high probability reversal value. I wanted to issue a temporary exit order in anticipation of a sizeable Wave 2 reversal, but because I was pre-occupied, and because the "Thread Search" function at the top of this page doesn't work any more when one puts "NZD/USD" of "#336" into the search field, I didn't get a chance.

Exiting this long trade with 90 pips of profit would have been particularly strategic since it is possible that we may not have properly identified the turning point of the larger NZD/USD downtrend. We might be trading a Wave C of a Wave 4 uptrend, instead of Wave 1 of a new uptrend. Exiting at the top of the 5 wave set in these situations is a good idea, as one will win the trade in either case. If one holds through the correction, if the wave hypothesis is incorrect, then the downwards trend will be large and continue until it hits the stop.

The price of NZDUSD then fell 90 pips from .6891 to .6801 in an A-B-C Wave 2 correction. The downwards correction may not be over yet.
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Previous Trade Experiment:

Thursday February 1 at 15:30 ET

Trade Experiment #336 Buy NZD/USD at .6800
Stop is .6748
Target #1 is .7100
Risk is 56 pips
Reward is min. 296 pips
Reward / Risk Ratio is min. 5.3

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

For research purposes only.

Wave hypothesis : Wave 5 up of a large trend that began September 2001.

GBP/USD appears like it might rise to 1.9500 and then drop 100 pips.

AUD/USD appears like it might rise to .7824 before a strong drop.

p.s. - So far GBP/USD has risen to 1.9537

AUD/USD has risen to .7822. The waveform suggests another pulse up is possible.

p.p.s - Another wave pulse up on AUD/USD occured. The new high is .7828. The GBP/USD high is now 1.9565.

Hi Itme, and other contributers to this thread,

Thankyou everyone for being a good support to FX newbies.

I've noticed that a lot of cross pairs have been studied and discussed in this thread.

I'm not able to study these pairs( eg: EUR/CAD, NZD/USD...) on Metatrader charting as I'm not able to get these under the 'New charts' option

Can some well-wisher please share how I can view/add these charts.

Thanks

your stop loss : 1.3080
price: 1.3084

Yes, that's why I said above "p.s - a continued upwards trend throughout the day which has spiked twice up to 1.3055 places our stop in jeopardy. Traders may want to consider moving their stop north a bit." from the original value of 1.3071. The current high is 1.3083, which could be the ultimate high.

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The same goes for our NZD/USD short trade. The recent high is .6922, 1 pip past our original stop. That's why we stated above "p.s - a continued upwards trend throughout the day which has risen twice up to .6912 places our stop in jeopardy. Traders may want to consider moving their stop north a bit. - perhaps to .6931 from .6921.".

Wednesday February 14 at 3:00 ET

Trade Experiment #343 Sell GBP/USD at 1.9520

Stop is 1.9571

Target is 1.9400

Risk is 54 pips

Reward is 116 pips

RRR is 2.1 to 1

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

For research purposes only.

Wave hypothesis : Wave

Wednesday February 14 at 3:00 ET

The previous attempt to short EUR/USD was stopped out. This re-entry is a much superior trade, with a higher probability of success.

Trade Experiment #341A Sell EUR/USD at 1.3090

Stop is 1.3146

Target is 1.2900

Risk is 59 pips

Reward is 187 pips

RRR is 3.2 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.

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Previous Trade Experiments:

Tuesday February 13 at 8:45 ET

Trade Experiment #341 Sell EUR/USD at 1.3040
Stop is 1.3071
Target is 1.2900
Risk is 34 pips
Reward is 137 pips
RRR is 4.0 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down. The recent high of 1.3043 may not be the ultimate top of this upwards trend - only the top of upwards Wave 3. We may need to exit at the bottom of a downwards either Wave 4 or Wave 3.

Why EUR/USD rose strongly today: The euro gained after several indicators from Germany showed the economic growth unexpectedly accelerated, raising expectations for a March rate hike by the European Central Bank.

German GDP surprisingly expanded at a quarterly rate of 0.9% in the fourth quarter, faster than the pace of 0.6% in the previous quarter. Germany ZEW economic sentiment index rose from -3.6 to +2.9 in February, the first positive reading since July. The current conditions in this ZEW survey also came in higher than forecast unexpectedly, up from 70.6 to 70.9. Following these strong economic data, the EUR/USD rose from 1.2960 to 1.3043 versus the dollar.

Meanwhile, the dollar fell slightly across the board after a report showed US trade deficit widened from 58.2 billion to 61.2 billion in December.

p.s - a continued upwards trend throughout the day which has spiked twice up to 1.3055 places our stop in jeopardy. Traders may want to consider moving their stop north a bit.

Wednesday February 14 at 3:00 ET

Re-Enter Trade Experiment #339C Sell EUR/CAD at 1.5287

The previous rise to 1.5270 was probably Wave A of Wave 4. A fall to 1.5200 followed. Then a rise to the recent high at 1.5289. This is probably the top of Wave C of Wave 4.

Wave Hypothesis: Wave 5 down.
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EUR/CAD update for Tuesday February 13 at 9:00 ET

Tuesday February 13 at 9:00 ET

Following the last temporary exit signal (at what we assumed was the bottom of Wave 3), EUR/CAD bounced 63 pips from 1.5231 up to 1.5294. (The reversal point was 13 pips lower than the system derived exit point.)

The astute trader would have noted the horizontal consolidation channel and waited for about 10 hours of consolidation to re-enter the EUR/CAD short position after the second rise of price. After re-selling EUR/CAD at about 1.5290 (the top of Wave 4) the price dropped again and formed a five wave pattern making a new low 135 pips lower at 1.5155, quite close to our target. This is presumed to be the bottom of Wave 5.

From there EUR/CAD bounced again 115 pips in an upwards A-B-C pattern, presumed to be Wave B, up to a recent high at 1.5270. This point which was reached after a spike caused by the poor US Trade data release this morning was a good re-entry point to short EURCAD to continue the downwards trade, trading a downwards Wave C to our conservative target of 1.5100.
____________________________________________
____________________________________________

Previous Trade Experiments:

Temporarily exit Trade Experiment #339 Sell EUR/CAD at 1.5444

Friday February 9 at 12:30 ET

EUR/CAD fell strongly as predicted, as both EUR/USD and USD/CAD fell at the same time. The wave pattern and time of day suggests that there will be a sizeable bounce at about this time. USD/CAD fell strongly today 150 pips today in a 1-2-3 pattern, and is now due for a largish Wave 4 correction upwards, which will cause EUR/CAD to rise also.

Therefore exit Trade Experiment #339 Sell EUR/CAD at 1.5444 at the present price of about 1.5250 to consolidate about 190 pips of profit.

Re-enter EURCAD at the top of an A-B-C Wave 4 upwards correction.
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Previous Trade Experiment:

Thursday February 8 at 9:00 ET

Re-entry opportunity for Trade Experiment #339 Sell EUR/CAD at 1.5444

Stop is 1.5484
Target is 1.5100
Risk is 49 pips
Reward is 335 pips
RRR is 6.8 to 1

Wave hypothesis : This is the top of a large Wave B or a large Wave 2, and thus the beginning of a new large 5 wave trend.

p.s. - bring stop down to 1.5471 from 1.5484. The price could rise to 1.5500 later. The current price is 1.5440. The highest price reached today is 1.5470.
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Wednesday February 7 at 11:00 ET

Trade Experiment #339 Sell EUR/CAD at 1.5420
Stop is 1.5461
Target is 1.5100
Risk is 50 pips
Reward is 310 pips
RRR is 6.0 to 1

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

For research purposes only.

Wave hypothesis : This is the top of a large Wave B or a large Wave 2, and thus the beginning of a new large 5 wave trend.

Wed. 2/14
4:30 GBP Claimant Count Change http://www.forexfactory.com/images/m...mpact_high.gif -13.5K -5.0K -5.5K
4:30 GBP Unemployment Rate http://www.forexfactory.com/images/m...impact_low.gif 5.5% 5.5% 5.5%
4:30 GBP Average Earnings Index +Bonus q/y http://www.forexfactory.com/images/m...act_medium.gif 4.0% 4.1% 4.1%
5:30 GBP BOE Inflation Report http://www.forexfactory.com/images/m...mpact_high.gif

There is 30 minutes of missing data from my "Intellicharts" chart readout, from 5:10 to 5:45 ET, but it appears that GBP/USD rose about 50 pips following the release of the BOE Inflation Report:

UK Bank of England inflation report preview

The Wednesday Bank of England inflation report will be important for short-term interest rate expectations and the Sterling performance. The bank is likely to forecast a significant reduction in inflation over the second half of 2007 as high energy and utility prices drop out of the annual calculation.

The importance of the report has been reduced slightly by the low inflation reading for January as immediate market fears over higher inflation have eased. The UK currency will also now react more strongly to a tough report, although the bank is likely to take a more balanced view with a slight tightening bias.

The net risks look to be slightly negative for Sterling, although heavy selling should be resisted given that the weak inflation data has already undermined the currency over the past 24 hours.
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Analysis by Investica LTD
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Today 05:32am
(UK) BOE's King: Monetary policy has to focus on medium term risks, Jan CPI does not mean inflation concerns over

- Downside Risks To World Econ Have Diminished
- Says asset prices, money and credit growth remain robust
- Probably some slack in labor market, would help slow CPI rise

Today 05:31am
*BOE REPORT SHOWS CPI AT 2% TARGET IN 2YRS ASSUMING MARKET RATES CLEARLY ABOVE 2% ON CONSTANT RATES

- Import Price Inflation To Ease On GBP strength
- Inflation:To Grow At Or Above Trend Over Forecast Period
- Near-Term CPI Volatility Seen Higher at this time than back in Nov
- Notes that CPI is To Fall "Sharply" On Lower Energy, Gas Prices
- Inflation Report sees CPI falling Below 2.0% Target By End 2007, then pick up again
- notes that Spare Capacity, Inflation Expectations are also Risks
- Margin Of Spare Capacity Is "Relatively Limited"
- Wage And Price Behavior Risks and Demand Is "Robust"
- Economy To Grow At Or Above Trend Over Forecast
- EconomicGrowth Driven By Household Spending, Business Investment
- Growth To Ease At End Period As Public Spending Slows

Today 06:33am

1. BOE King:Trade Deficits Can't Be Sustained Indefinitely - Says weights in Sterling exchange rate not recent weights. - Says FX will have to play a role in UK economic rebalancing. - Says people are being more cautious on unsecure debt
2. Today 06:19am
3. (GE) Finance Minister: Jan tax levels +12.8% y/y at federal and state levels
4. Today 06:06am
   (UK) BOE's King: Says G7 has to be careful in tackling Japan's issues - Says weak yen part of transmission process of low rates. - Notes that higher BOJ rates would slow Japanese domestic demand. - Says there are no one-way bets in FOREX markets
5. Today 06:01am
   (UK) BOE's King: Expects To See "Significant Fall" In RPI (Note that RPI is used as a benchmark in UK wage negotiations)

Hello Itme,
I take it that you don't agree with Bob Prechter that social mood (as per EW) is primary, and that the financial markets, as well as the news (as it is presented to, and interpreted by, we, the masses) are only a reflection of this? Example being, on the many occasions when currencies moved against the economic drivers (as in 2005, when USD went up, in spite of fundamental economic weakness). You have indicated at times that you understand that "news" is only a spin put out to us by those who would manipulate us into seeing things as they wished. Of course, this is useful information to have, as most often it does seem to drive the markets - until something (sometimes unknown to us mere mortals) moves things the other way. But isn't EW supposed to show the primary forces at work, of which "news" (and fundamental analysis) is only a retrospective justification?
Anyway, thanks for your summaries of the news - sort of interesting in retrospect.

I think I probably agree with Bob Prechter. I don't accept the psychological explanation, though, although I don't discount it. I believe that the market is driven primarily by the factors as outlined in the complex mathematical article I referenced above. There are hundreds of thousands if not over 1 million or more institutions manned with PhD economists and mathematicians employing rigorous models programmed into computers. Various models execute trades on a variety of timeframes. The cumulative impact of all these trading computers whose programs are based on prevailing beliefs, theories and market models, plus market / economy / psychology system properties, combined with the control mechanisms of the trillionaire capitalist managerial class operating through influence or near total control over the news commentary, the chart feeds, economic data releases, bank credit policy, government monetary policy, interest rate policy, and direct intervention (all unadmitted) together produce the apparent market behavior.

On the short term, certain news releases have the capacity to influence the market to a certain extent. This is important to the low risk / high reward trader because of the relatively small stops being employed. The larger patterns and the smaller patterns seem to be somewhat independent of the daily data releases. But significant news can expand or contract the wave magnitudes, or alter the timing of the cycles. The market behavior is obviously the summation of all pertinent factors, which plainly includes potent data releases on an hourly timeframe, and constellations of potent economic news over a daily timeframe. The Elliott Wave patterns would be more ideal except for two factors. First, the more fundamental dynamics of market targetting that my Q theory attempts to explain. These more fundamental market forces cause distortion of the wave patterns. The second factor is the ongoing economic news releases and world events, which individually and collectively can stretch and compress any particular wave segment.

Elliott Wave Theory and the Q Model would pretty much perfectly explain and predict all market moves with outstanding accuracy but for all the ongoing exogenous inputs which inject real and sometimes very potent momentum into the market which creates distortion of the ideal or "normal" wave patterns. In order to better understand the influence of these exogenous factors on my market model I am closely monitoring the fundamental dimension to observe its influence over the market. The complex interplay of technical and fundamental forces produces the near impenetrable complexity of market behavior. A clear, comprehensive, and balanced assessment of all relevant forces and factors should yield the most reliable and accurate market model. When both technical and fundamental factors are in agreement, the most probable and fastest, longest market trends should be occurring. Yesterday's GBP/USD downtrend is a good example. The correlation of technical and fundamental forces downwards produced a very linear and strong 108 pips downwards move, which probably overshot as a result, which may partly explain the rapid slingshot 165 pip move up which occurred subsequently.

Prior to the Congressional testimony, markets will digest January retail sales data at 8:30 AM. The headline report is forecasted to drop to 0.3% compared with 0.9% from December. Meanwhile, the excluding auto retail sales report is seen unchanged in January at 0.3%.
Also on the today's calendar will be the releases of December inventories and the EIA crude oil stocks through February 9th.

8:30 USD Retail Sales m/m http://www.forexfactory.com/images/m...act_medium.gif 0.0% 0.3% 1.2%
8:30 USD Core Retail Sales m/m http://www.forexfactory.com/images/m...mpact_high.gif 0.3% 0.4% 1.3%
8:30 CAD New Motor Vehicle Sales m/m http://www.forexfactory.com/images/m...impact_low.gif 5.6% 5.0% 3.0%
10:00 USD Business Inventories m/m http://www.forexfactory.com/images/m...impact_low.gif 0.2% 0.4%
10:00 USD Fed Chairman Bernanke Speaks http://www.forexfactory.com/images/m...mpact_high.gif
10:30 USD Crude Oil Inventories -0.6M -0.4M

The 8:30 ET news release of USD Retail Sales was worse than expected, moving GBP/USD up from 1.9540 to 1.9570. One more upwards surge is possible.

Wednesday February 14 at 9:30 ET

Yesterday DEC US TRADE BALANCE: -$61.2B V -$59.7BE was bad for USD. Today GBP Claimant Count Change was good for GBP. BOE Inflation report pushed up GBP/USD. USD Retail Sales was disappointing. Altogether these three pushed GBP/USD up higher than expected.

GBP/USD has risen 11 pips past our stop, to a high of 1.9582. Re-entry is called for.

Trade Experiment #343A Sell GBP/USD at 1.9570

Stop is 1.9636

Target is 1.9400

Risk is 70 pips

Reward is 165 pips

RRR is 2.3 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.
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Wednesday February 14 at 3:00 ET

Trade Experiment #343 Sell GBP/USD at 1.9520
Stop is 1.9571
Target is 1.9400
Risk is 54 pips
Reward is 116 pips
RRR is 2.1 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.

Impending event risks: Fed Chairman Bernanke's Congressional testimony at 10:00 ET. We expect Bernanke to reaffirm the improvements in the softer sectors of the US economy, namely housing and manufacturing - thereby placing emphasis on risks to inflation rather than risks to economic growth. The Fed Chairman is likely to maintain its hawkish tone, citing lingering risks to price pressure and uncertainty over incoming economic data. The dollar will receive slight support heading into Bernanke's testimony.

I' m have little questions.
5 waves down? 5 wave from what motion?
How are you study waves of longtime?
Why you do not consider alternative variants?

Wednesday February 14 at 10:00 ET

The stop was actually placed in a slightly lower position than it should have been, in view of the strength of this trend. Re-entry is again called for. Now, for the first time, the trade is system compliant, with a RRR over 5.0.

Trade Experiment #343B Sell GBP/USD at 1.9640

Stop is 1.9681

Target is 1.9400

Risk is 45 pips

Reward is 235 pips

RRR is 5.2 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.
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Previous Trade Experiment:

Wednesday February 14 at 9:30 ET

GBP Claimant Count Change was good for GBP. BOE Inflation report pushed up GBP/USD. USD Retail Sales was disappointing. Altogether these three pushed GBP/USD up higher than expected.GBP/USD has risen 11 pips past our stop, to a high of 1.9582. Re-entry is called for.

Trade Experiment #343A Sell GBP/USD at 1.9570

Stop is 1.9636

Target is 1.9400

Risk is 70 pips

Reward is 165 pips

RRR is 2.3 to 1

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

For research purposes only.

Wave hypothesis : GBPUSD Wave 5 down. On the other hand Wave 5 may already have finished, and been a failed fifth wave. We may be going up now in a new WAVE 1 impulse wave of a larger final WAVE 5 up. This could be a downwards corrective wave we are trading, which may not be large at all. Fundamentals are bullish for GBP/USD right now, which is not favorable either.

Careful study indicates that 1.3146 is a high probability reversal value. The stop should have been placed 15 pips above this value at 1.3161. The current high is 1.3150. With a RRR of 6.4, this is the first system compliant trade on EURUSD so far.

Therefore re-enter Trade Experiment #341B Sell EUR/USD at 1.3146

Stop is 1.3181

Target is 1.2900

Risk is 38 pips

Reward is 243 pips

RRR is 6.4 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.
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Previous Trade Experiment:

Wednesday February 14 at 3:00 ET

The previous attempt to short EUR/USD was stopped out. This re-entry is a much superior trade, with a higher probability of success.

Trade Experiment #341A Sell EUR/USD at 1.3090
Stop is 1.3146
Target is 1.2900
Risk is 59 pips
Reward is 187 pips
RRR is 3.2 to 1

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

For research purposes only.

Wave hypothesis : Wave 5 down.

On February 11, in reference to GBP/JPY I said:

"I hypothesise that we have completed a larger A-B-C downwards corrective wave, not a 1-2-3-4-5 on GBPJPY as you have shown. Since then we have gone 1-2.... of a new upwards Wave 1."

This is also a very viable, if not compelling, alternative wave hypothesis for GBPUSD and EURUSD. I should have taken this view more seriously, particularly in view of the series of USD negative and GBP and EUR positive data releases over the past few days. Then I would have been going long on GBPUSD and EURUSD instead of trying to call the tops of these strong upwards trends, which would obviously have been far better. Thanks for pointing out what I was too busy doing other things to give sufficient attention to.