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  • #3,181
  • Mar 31, 2007 12:26am Mar 31, 2007 12:26am
Quoting Traex
Hi Wallboroff, here is my wave count and the possible option that I prefer. But yes, it might just be a mini wave B still and we're yet to see mini wave C down. Correct my chart if you have a better count. Thanks.
hi traex, you´re last 1-2-3-4 sequence is also possible but the thing that disturbs me the most is that i got a 310 % fibo extension from your wave-1 (in the last sequence).

i have many times seen it that the price reversed at this price area, so maybe your last sequence ist already over, just a thought here.

my best guess is going south. but it could also go north, well time and price movement have to confirm first before making any decisions.
  • #3,182
  • Mar 31, 2007 2:30am Mar 31, 2007 2:30am
Quoting monarch
It is very time consuming spending hours in front of charts and speculating when it will or when it will not, I use to do this for many weeks and months, then one day I realized that the pips are already there waiting for us to grab.

Are we making any profits from wave speculations, or do we spend all of our time waiting for the exact moment to enter, and actually miss the pips that fly by?

Just a question.
well who says i´m spending hours in front of my pc? and wave speculations are very profitable. it depends on what timeframe you have your wave-counts. if you have the counts on the 4 h chart than you only have to look every four hours or even less.

in my opinion "waiting for the exact moment to enter" is the key point in trading.
  • #3,183
  • Mar 31, 2007 4:25am Mar 31, 2007 4:25am
Quoting Traex
Hi Wallboroff, here is my wave count and the possible option that I prefer. But yes, it might just be a mini wave B still and we're yet to see mini wave C down. Correct my chart if you have a better count. Thanks.
This is a pretty chart. I tend to agree with the final 1-2-3-4 count, but my theory doesn't include any d's and e's and f's, so I'm lost on the earlier wave counts. But one thing is clear, it was ranging in a narrowing triangle as you showed, which is characteristic of a market that is relatively neutral in directional bias, and delaying breaking out either up or down until it is forced to by being hemmed into an ever narrower squeeze corner. It broke out downward because of good USD news, and then shot up due to USD negative news later in the morning, at about 10:00 ET. It also went down to a major support line. Then it went up. The symmetry of the overall pattern seems to demand one more movement upwards to balance out the entire geometrical pattern. Then it will probably come down again, at least a bit, even if it's now started in the fifth large impulse wave upwards.
  • #3,184
  • Mar 31, 2007 5:02am Mar 31, 2007 5:02am
Quoting itme
This is a pretty chart. I tend to agree with the final 1-2-3-4 count, but my theory doesn't include any d's and e's and f's, so I'm lost on the earlier wave counts. But one thing is clear, it was ranging in a narrowing triangle as you showed, which is characteristic of a market that is relatively neutral in directional bias, and delaying breaking out either up or down until it is forced to by being hemmed into an ever narrower squeeze corner. It broke out downward because of good USD news, and then shot up due to USD negative news later in the morning, at about 10:00 ET. It also went down to a major support line. Then it went up. The symmetry of the overall pattern seems to demand one more movement upwards to balance out the entire geometrical pattern. Then it will probably come down again, at least a bit, even if it's now started in the fifth large impulse wave upwards.
Hi Itme,
Of course there are waves D and E, and even F, G, H, and I but they're very rare. Reason: there are 5-wave, 7-wave, or even 9-wave triangles in the markets out there. In the cable case, it was a 5-wave triangle, labelled overall as corrective wave B.
Example of most recent 9-wave triangle is attached below (USD/JPY).
Attached Image
Tra-X
  • #3,185
  • Apr 1, 2007 4:52am Apr 1, 2007 4:52am
Quoting Traex
Hi Itme,
Of course there are waves D and E, and even F, G, H, and I but they're very rare. Reason: there are 5-wave, 7-wave, or even 9-wave triangles in the markets out there. In the cable case, it was a 5-wave triangle, labelled overall as corrective wave B.
Example of most recent 9-wave triangle is attached below (USD/JPY).
Hi Traex. There are various versions of EW theory. Mine doesn't include the patterns you describe. I find the wave counting system of my mentor to be simple, consistent, and quite effective in most cases. He is in close contact with Robert Prechter, and is highly conversant with Prechter's theories. So far, 99% of patterns seem to me to fit the basic pattern. For instance, the pattern you show for JPY is a typical 1-2-3-4-5 from my point of view, with an extended Third Wave, which is normal.
  • #3,186
  • Edited 12:53pm Apr 1, 2007 5:46am | Edited 12:53pm
Friday 3/30

1:00 JPY Housing Starts y/y -9.9% -2.0% -0.7%
2:00 EUR German Retail Sales m/m 0.9% 0.5% -4.3%
5:00 EUR CPI y/y (p) 1.9% 1.9% 1.8%
5:00 EUR Unemployment Rate 7.3% 7.3% 7.4%
5:00 EUR Consumer Confidence -4 -5 -5
5:30 GBP Consumer Confidence -8 -8 -8
8:30 USD Core PCE Price Index m/m http://www.forexfactory.com/images/m...mpact_high.gif 0.3% 0.2% 0.3%
8:30 USD Personal Spending m/m http://www.forexfactory.com/images/m...act_medium.gif 0.6% 0.3% 0.5%
8:30 USD Personal Income m/m 0.6% 0.3% 1.0%
8:30 CAD GDP m/m http://www.forexfactory.com/images/m...mpact_high.gif 0.1% 0.2% 0.4%
8:30 CAD IPPI m/m 0.9% 0.2% -0.1%
8:30 CAD RMPI m/m 2.6% 0.6% -3.1%
9:45 USD Chicago PMI http://www.forexfactory.com/images/m...mpact_high.gif 61.7 49.5 47.9
10:00 USD Consumer Sentiment (r) http://www.forexfactory.com/images/m...act_medium.gif 88.4 88.8 88.8
10:00 USD Construction Spending m/m 0.3% -0.6% -0.8%
12:00 USD Fed Chairman Bernanke Speaks

The dollar turned lower in a sudden reversal of fortunes late in the European session, as a jittery market reacted to speculation of rising tensions in the Middle East.
News of US plans to impose sanctions on some Chinese imports also dented the US currency amid speculation that China will take retaliatory action.
The dollar which had been slowly gaining ground after some strong US data, backtracked on unspecified rumours that US citizens have been ordered to leave Bahrain. 'The dollar slides across the board on a combination of rumours that the US Department has told US citizens to leave Bahrain,' said Ashraf Laidi at CMC Markets.
'The news has further fuelled the risk premium in oil prices, generating the same dollar reaction seen upon the rumours of a military confrontation between the US and Iran earlier this week,' he added.
Jamie Coleman at Thomson IFR Markets echoed the same story, saying that rumours are running wild. 'One making the rounds is that US citizens have been warned to leave Bahrain in preparation for a strike against Iran,' he said. He was sceptical of the rumour, however.
Laidi said most of the dollar's falls may be due to news that the US will impose heavy sanctions on some Chinese imports.
  • #3,187
  • Apr 1, 2007 11:17am Apr 1, 2007 11:17am
Quoting itme
Hi Traex. There are various versions of EW theory. Mine doesn't include the patterns you describe. I find the wave counting system of my mentor to be simple, consistent, and quite effective in most cases. He is in close contact with Robert Prechter, and is highly conversant with Prechter's theories. So far, 99% of patterns seem to me to fit the basic pattern. For instance, the pattern you show for JPY is a typical 1-2-3-4-5 from my point of view, with an extended Third Wave, which is normal.
Hi Itme,
Whoa, so you see that triangle in my USD/JPY chart as a 5-wave sequence instead. Hmm, what one sees is not what the others see. And everyone has their own patterns and waves, indeed.
Tra-X
  • #3,188
  • Apr 1, 2007 1:25pm Apr 1, 2007 1:25pm
Dear Itme:

A couple of weeks ago I asked you to post some thoughts on the "My journey to 1.000.000" thread. I thank you for your time and response. I appreciate serious contributions and note that you write lengthy answers that are sound and logical (i am a very logical person). Since then I have been busy again with: backtesting, calculating and getting deeper into the maths of forex. Here is just one question (not questioning you) but for my better understanding.

You stated in your post the following:
Quote
"With an average of two completed trades per week, a 75% win rate, 1:1 RRR, and 50% Risk Factor, an account with $300 in it will grow to $270,000 in 6 months, and $243 million in 12 months."

I can't get the same results....please help me understand HOW this is possible. Maybe I am "to deep in the forest" to see the trees... Can you give me some direction on this one? (I don't mean WHAT SYSTEM will bring me there, just the mathematics...)

Greetings,
Peter.
PS: I hate to interrupt "the flow" of nice threads, but thought that this topic fits well into the "HIGH REWARD" part of the thread, and I'm hoping that your answer will further ENRICH your journal. If you don't agree, I apologise.
  • #3,189
  • Apr 1, 2007 2:45pm Apr 1, 2007 2:45pm
Quoting petercross
Dear Itme:

A couple of weeks ago I asked you to post some thoughts on the "My journey to 1.000.000" thread. I thank you for your time and response. I appreciate serious contributions and note that you write lengthy answers that are sound and logical (i am a very logical person). Since then I have been busy again with: backtesting, calculating and getting deeper into the maths of forex. Here is just one question (not questioning you) but for my better understanding.

You stated in your post the following:

I can't get the same results....please help me understand HOW this is possible. Maybe I am "to deep in the forest" to see the trees... Can you give me some direction on this one? (I don't mean WHAT SYSTEM will bring me there, just the mathematics...)

Greetings,
Peter.
PS: I hate to interrupt "the flow" of nice threads, but thought that this topic fits well into the "HIGH REWARD" part of the thread, and I'm hoping that your answer will further ENRICH your journal. If you don't agree, I apologise.
Thanks for the good question, Peter. I think you said you were a mathematician or something like that. Is that true? Or are you simply a logical thinker?

I said on another thread, where I believe you obtained the above quote, "for the trading program I am suggesting, you should try to find one where you can complete at least two trades a week. That is, where with the time you have available you will be able to identify at least two system compliant trades during the six full or partial trading days each week. With an average of two completed trades per week, a 75% win rate, 1:1 RRR, and 50% Risk Factor, an account with $300 in it will grow to $270,000 in 6 months, and $243 million in 12 months."

According to the Itme Theorem #1, the gain on each winning trade will be RRR times Risk Factor, which in this case is 1 times .50, which is .50. So each winning trade will make 50% return on capital. Each losing trade will lose the amount of the Risk Factor, which is 50%. The total of 48 trades in 6 months will probably consist of 75% wins or 36 wins, and 25% losses which is 12 losses. The effect of 36 wins with a 50% return from each win is about 2.2 million times multiplication of capital. Twelve losses each of 50% of capital results in a diminution of capital by 4096 times. The combined impact of all the trades will be a multiplication of capital by 533 times. Then an initial capital of $300 will grow to $160,000 in 48 weeks, not $270,000.

If we base our calculations on half a year, which is 26 weeks and thus 52 trades, then there will probably be 39 wins and 13 losses, so $300 will grow to $270,000.
  • #3,190
  • Apr 2, 2007 4:06am Apr 2, 2007 4:06am
Quoting monarch
It is very time consuming spending hours in front of charts and speculating when it will or when it will not, I use to do this for many weeks and months, then one day I realized that the pips are already there waiting for us to grab.

Are we making any profits from wave speculations, or do we spend all of our time waiting for the exact moment to enter, and actually miss the pips that fly by?

Just a question.
i am with you monarch , I feel somthing is wrong .
  • #3,191
  • Edited 12:34pm Apr 2, 2007 12:08pm | Edited 12:34pm
Monday 4/2

1:00 JPY Vehicle Sales y/y -12.6% -8.3% -8.7%
3:30 CHF SVME PMI 62.0 63.1 63.5
3:55 EUR German Manufacturing PMI http://www.forexfactory.com/images/m...act_medium.gif 56.9 57.5 57.2
4:00 EUR Manufacturing PMI 55.4 55.6 55.6
4:30 GBP Manufacturing PMI http://www.forexfactory.com/images/m...act_medium.gif 54.4 55.0 55.4
10:00 USD ISM Manufacturing Index http://www.forexfactory.com/images/m...mpact_high.gif 50.9 51.3 52.3
10:00 USD ISM Manufacturing Prices http://www.forexfactory.com/images/m...act_medium.gif 65.5 60.0 59.0
12:30 USD St. Louis Fed President Poole Speaks http://www.forexfactory.com/images/m...act_medium.gif
19:50 JPY Monetary Base y/y -22.0% -21.1%
21:30 AUD Trade Balance -1.25B -0.88B

The dollar was slightly lower after a key survey of the US manufacturing sector came in below expectations, though losses were limited as a surge in the prices components pointed to rising inflationary pressures. The monthly survey from the Institute of Supply Management said its main purchasing managers index for the sector fell to 50.9 in March from 52.3 in February, below expectations for a modest decline to 51.7. However, the survey may stoke concerns at the US Federal Reserve about rising inflationary pressures as the prices element surged to 65.5 from 59.0, leaving intact expectations that US interest rates will not be cut any time soon.
'There wasn't much of a response from the dollar as the data was fairly mixed with the fall in employment being offset by the rise in prices,' said Paul Bednarczyk, currency strategist at 4CAST.
'Traders are also being fairly cautious this week and closing positions as US payrolls data is out on Friday when financial markets are closed,' he added.
  • #3,192
  • Edited 1:58pm Apr 2, 2007 12:57pm | Edited 1:58pm
Even though GBP/USD just reached a two month high, it's still remotely possible that it's in a large downwards corrective pattern that can sometimes reach a new high in its Wave B if its a "running corrective". It's also possible that the corrective Wave 4 is over and we are in an impulse wave targeting about 1.9900. The current price is 1.9775. Within this impulse wave, we appear to be in a Wave 4, and within that Wave 4, we seem to be approaching the end of the Wave B.

A correction pattern falls into four main categories: a zigzag, a flat, a triangle a double 3 or a triple 3. The most common type of correction is a a zigzag. A correction can also occur in the form of an irregular flat or failed topping pattern. An irregular flat occurs when C is 2/3rds of the distance of A, and occurs in very bullish markets. A running correction occurs when C fails to take out A, and when B overshoots a number. For example a wave 3 has been put in and then you go to A and B is higher than 3 and C is lower than A.

Here is a good overview of Elliott Wave theory. At the bottom of the page is a description of the running correction, for those who aren't familiar with this term:

http://www.ad-financial.com/principles.php

A second rise to 1.9800 could afford a short opportunity for GBP/USD. A fall to about 1.9740 might give us a long opportunity, depending on the configuration at the time. This latter would be a more strategic trade opportunity.
  • #3,193
  • Edited Apr 4, 2007 2:52am Apr 3, 2007 1:02pm | Edited Apr 4, 2007 2:52am
Monday 4/2

19:50 JPY Monetary Base y/y http://www.forexfactory.com/images/m...act_medium.gif -19.1% -22.0% -21.1%
21:30 AUD Trade Balance http://www.forexfactory.com/images/m...act_medium.gif -0.84B-1.25B -0.83Br

Tuesday 4/3
1:45 CHF CPI m/m 0.1% 0.2% 0.2%
4:30 GBP Construction PMI 58.9 57.5 57.3
4:30 CHF KOF Media Conference http://www.forexfactory.com/images/m...act_medium.gif
5:00 EUR PPI m/m 0.3% 0.3% 0.2%r
Tentative USD Domestic Vehicle Sales 12.8M 12.8M
19:01 GBP Consumer Confidence Index http://www.forexfactory.com/images/m...act_medium.gif 85
19:30 AUD Interest Rate Statement http://www.forexfactory.com/images/m...mpact_high.gif 6.25% 6.25%
19:30 AUD Services PMI 54.5

Felix's Tuesday Potential Announcement Trade Opportunity

Tuesday, April 3rd, 2007 (7:30 pm New York Time)
AUSTRALIA
We have an Interest Rate statement coming out of Australia. There is about a 50/50 chance of an interest rate hike to 6.50%. That means that this may be a trade either way. So if Australia keeps the rate unchanged at 6.25%, AUD/USD may possibly go down by 50 pips or more in the first hour. If Australia hikes the rate to 6.50%, AUD/USD may possibly go up by 50 pips or more in the first hour.

What can really mess this trade up is a wise comment from Stevens, which will probably accompany the rate hike, and which may accompany the no change few minutes after. If after a hike, Stevens says something dovish about the future, it was cause a reverse effect, and same would apply about a no hike. So best thing to do is lock in profits and take some off the table to avoid all the profits slip away in a situation like that.
_____________________________________________________________________

What happened with AUD interest rate announcement:

Reserve Bank of Australia on Hold

The RBA announced the decision from its monetary policy meeting earlier, deciding to leave rates unchanged at 6.25%. Although markets’ expectations were mixed, the reaction following the announcement was uniform, with a knee-jerk reaction lower in the Aussie, backing further away from recent 10-year highs to dip beneath the 0.81-level to 0.8066. The Australian dollar dropped to a low of 0.8066 usd from levels around 0.8118 usd prior to the announcement as traders took profits following the currency's strong rise over the last few weeks. Nevertheless, analysts maintain their view that the Reserve Bank of Australia will tighten policy this year as early as the May meeting and accordingly will result in the Aussie to remaining bid against the greenback and yen.
  • #3,194
  • Edited 3:53pm Apr 3, 2007 1:33pm | Edited 3:53pm
Quoting itme
Even though GBP/USD just reached a two month high, it's still remotely possible that it's in a large downwards corrective pattern that can sometimes reach a new high in its Wave B if its a "running corrective". It's also possible that the corrective Wave 4 is over and we are in an impulse wave targeting about 1.9900. The current price is 1.9775. Within this impulse wave, we appear to be in a Wave 4, and within that Wave 4, we seem to be approaching the end of the Wave B.

A correction pattern falls into four main categories: a zigzag, a flat, a triangle a double 3 or a triple 3. The most common type of correction is a a zigzag. A correction can also occur in the form of an irregular flat or failed topping pattern. An irregular flat occurs when C is 2/3rds of the distance of A, and occurs in very bullish markets. A running correction occurs when C fails to take out A, and when B overshoots a number. For example a wave 3 has been put in and then you go to A and B is higher than 3 and C is lower than A.

Here is a good overview of Elliott Wave theory. At the bottom of the page is a description of the running correction, for those who aren't familiar with this term:

http://www.ad-financial.com/principles.php

A second rise to 1.9800 could afford a short opportunity for GBP/USD. A fall to about 1.9740 might give us a long opportunity, depending on the configuration at the time. This latter would be a more strategic trade opportunity.
The recent market sentiments seem to be inclined to be USD negative and GBP positive. Depending on the outcome of news announcements such as upcoming US employment data and world events such as the US military buildup in the Gulf, we will either continue upwards or finish a large correction. Today's market moves carried GBP/USD up to a new high of 1.9823 in what appears like a 1-2-extended 3 pattern. We are now likely in a downwards lower order Wave 4 targeting about 1.9700.

We considered a short trade on GBP/USD at about 1.9800 - 1.9820, but we prefer to trade in the direction of the intermediate trend, unless the set-up is clear and ideal. If the price had retreated to 1.9740 before rising to a new high, then a good trade opportunity would have presented itself. But this didn't happen, which affirms the bullishness of the market sentiment.

According to my semi-deterministic market model, if market sentiments continue USD negative then we will play out a new Fifth Wave upwards impulse pattern. In this scenario, we are undergoing the C wave of the downwards corrective Wave 4 on a lower order, targeting a reversal point at about 1.9710. This will afford a long trade opportunity targeting the top of Wave 5 at about 1.9900.

In other forex markets, EUR/USD is idling in a 50 pip range, apparently playing out a Wave 4 consolidation pattern in preparation for another bullish impulse. GBP/JPY has been rising strongly, apparently targeting the 235.50 area. Both of these patterns indicate the possibility of another GBP/USD bullish impulse following this current correction. Notice the recent strong positive correlations between GBP/USD and USD/JPY and AUD/USD and USD/JPY as a result of the large volumes of carry trades moving in and out of these positions together: FX Correlations (March)

Fundamentally speaking, the subprime fiasco is weighing heavily on the USD as traders wonder if the US economy could outgrow the massive debt load incurred over the past decade. With stock margin debt at its highest level since the 2000 equity market highs while overall debt to GDP ratio at the highest level ever, the question of how US will service all those obligations has been the primary preoccupation of FX traders. On the other hand, surprisingly strong reading in Manufacturing and persistently low unemployment claims suggest that the greenback may be down but not out.
______Despite the holiday-shortened week, several key highlights could impact currency moves, including central bank monetary decisions from the Reserve Bank of Australia and the Bank of England and Friday's US March jobs report. The Reserve Bank of Australia is set to announce its latest decision on interest rates overnight, with the Bank of England's decision following on Thursday. Recent strong data in both those regions, particularly Australia, have led market players to price in a greater risk of interest rate hikes.
______ 'The Bank of England and the RBA might raise interest rates, the market believes Japanese rates are going nowhere and it's no wonder the carry trade is alive and well,' said Neil Mellor at the Bank of New York. This may explain the recent strong upwards moves in USD/JPY and USD/CHF, and the recent rises in GBP/USD and AUD/USD.
______ The RBA board meets tonight and the market is on alert to the possibility of a early hike given recent strong retail sales and inflation data. 'The latest data has tipped the balance in the market towards pricing in a greater chance of a hike tonight by the RBA than inaction,' said Daragh Maher at Calyon.
______ Recent strong UK data meanwhile have increased the chances that the Bank of England's Monetary Policy Committee will raise interest rates again as early as this week. Even if they opt to leave rates on hold this time, however, a May hike will be seen as all but a certainty.

Summary of recent economic data:

http://www.dailyfx.com/export/sites/....2007.img2.gif
  • #3,195
  • Apr 3, 2007 3:39pm Apr 3, 2007 3:39pm
We are looking primarily at GBP/USD, EUR/USD and USD/CAD for about one fairly ideal trade per week. If we can manage a RRR of at least 2:1 and Success Rate of 75%, then we will have achieved our aim.

One of our recent trades was a short of USD/CAD. This trade was successful, but we got skittish after entering it when we noticed that the Elliott Wave count on the one minute chart on the final smallest order wave was possibly incomplete. This requirement is probably too stringent, as there is often a poorly formed or non-compliant wave on this scale in exactly this situation.
_______________________________________________________________________
_______________________________________________________________________

Here is the earlier trade experiment and bail signal:

Exit Trade Experiment #365 Sell USD/CAD at 1.1620 for 15 pips of loss
Monday March 25 at 3:00 ET

Exit Trade Experiment #365 Sell USD/CAD at 1.1620 for 15 pips of loss. The wave count was not complete when this trade was entered. This trade is not system compliant. The drop was only 11 pips to 1.1595. The expected reversal point is about 1.1690 (61.8% retracement of recent downtrend), not 1.1610.
______________________________________________
______________________________________________

Previous Trade Experiment:

Trade Experiment #365 Sell USD/CAD at 1.1610
Stop is 1.1653
Move stop to Break Even at 1.1579
Target is 1.1500
Risk is 48 pips
Reward is 105 pips
RRR is 2.1
Confidence level: good
Accuracy: good
Reward / Risk Ratio : fair
Wave hypothesis: Wave 5 down.
  • #3,196
  • Edited Apr 4, 2007 2:33am Apr 3, 2007 7:35pm | Edited Apr 4, 2007 2:33am
We are experimenting with a new Breakeven Stop Strategy to see if it can reduce losses without also eliminating most winning trades. Our last trade buying the GBP/USD on Wednesday March 28 at 3:30 ET was kicked out at Break Even, and then the price dropped to one pip below our stop before rising to hit our target.

In this case the B/E stop worked to prevent a loss. We should have re-entered the buy trade at our Q System high probability reversal point (HPRP) at 1.9560, 50 pips below the original failed entry price. The target of 1.9775 was met three days later, after a weekend. This would have been an approximately 3:1 RRR trade.
__________________________________________________
___________________________________________________

Previous Trade Experiment:

Wednesday March 28 at 3:30 ET
I agree 100% with Forex Thoughts:
Buy GBP/USD at 1.9610, SL 1.9550, TP open
Trade Experiment #366 Buy GBP/USD at 1.9610
Stop is 1.9549
Move stop to Break Even at 1.9640
Target is 1.9775
 Risk is 65 pips
Reward is 161 pips
RRR is 2.5
Confidence level: good
Accuracy: good
Reward / Risk Ratio : fair
Wave hypothesis: Wave 5 up.

For research purposes only.
p.s. - GBP/USD came down to 1.9601 to trigger our Buy Limit at 1.9610.
  • #3,197
  • Edited 6:56pm Apr 4, 2007 2:19am | Edited 6:56pm
Wednesday 4/4

3:55 EUR German Services PMI 57.5 57.5 57.2
4:00 EUR Services PMI 57.4 57.6 57.5
4:30 GBP Services PMI http://www.forexfactory.com/images/m...act_medium.gif 57.6 57.5 57.4
5:00 EUR Retail Sales m/m 0.3% 1.0% -.8%r
5:30 GBP BRC Shop Price Index y/y 0.7%_________ 1.8%
6:00 EUR German Factory Orders m/m 3.9% 0.6% -.3%r
8:15 USD ADP Nonfarm Employment Change http://www.forexfactory.com/images/m...mpact_high.gif 106K 125K 65Kr
8:30 CAD Building Permits m/m -22.4% -8.5% 10.4%r
10:00 USD ISM Non-Manufacturing Index http://www.forexfactory.com/images/m...act_medium.gif 52.4 54.8 54.3
10:00 USD ISM Non-Manufacturing Prices 63.3 53.0 53.8
10:00 USD Factory Orders m/m 1.0% 1.9% -5.6%r
10:30 USD Crude Oil Inventories 4.3M_________ -0.9M

UK CIPS services index preview The UK CIPS index for the services sector will be important on Wednesday, especially as it is one of the last pieces of evidence ahead of the Thursday Bank of England interest rate decision.
_______The services sector index has held firm over the past few months despite a retreat to 57.4 in February from 59.2 the previous month. Markets are expecting a slightly firmer figure for this month and a monthly increase would reinforce evidence that the three interest rates increases since August have not had a big impact on growth.
_______ The prices index will be an important element, especially with the Bank of England concerned that companies are attempting to force prices higher. If this is happening, the CIPS prices index should record a significant advance after a drop to 54.2 in February from the 55.2 recorded for January.
_______A prices reading above 56.0 would increase pressure for higher interest rates and Sterling is likely to strengthen if the headline index is above 58.5. Monthly declines for the headline and prices indices would be a significant negative factor for Sterling.

In the coming session, markets will also digest several key reports out from the Eurozone to further assess the scope for interest rate hikes from the ECB over the coming months.

The March services PMI for the Eurozone is seen at 57.6, up marginally from the previous reading at 57.5. The Eurozone retail sales figures are expected to post improvements from the prior figures, on a monthly basis, reversing last month’s decline 1.0% to rise 0.5% in February. On a year-on-year basis, retail sales are expected to advance 1.1%, a marked improvement from the 0.1% decline recorded a year earlier. Germany’s February industrial orders are forecasted to improve to 0.6%, reversing a 1.0% decline from January.

US economic data also returns to focus on Wednesday, with key releases due out consisting of March non-manufacturing ISM, February factory orders and durable goods orders. The data are expected to be dollar positive, with services ISM improving to 55.0 from 54.3. The key number to watch will be the February factory orders figure, which posted a steep 5.6% drop previously and is forecasted to rise 1.8%.
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What happened:

The US service sector ISM index dropped to a four year low in the month of March while factory orders grew by a weaker than expected 1 percent in the month of February. And while this drop in the service sector ISM index is not indicative of a contraction as long as the index remains above 50, a second consecutive disappointing monthly figure suggests that the services sector may be following suit of that of manufacturing, which has dipped into sub-50 category on 2 separate occasions in recent months. These reports indicate that the US economy is not out of the woods, but at the same time, these disappointments were not enough to trigger a major reversal in the US dollar. Instead, the sharp drop in layoffs reported by Challenger Gray and Christmas and the rise in employment reported by payroll agency ADP has everyone focusing their attention on Friday’s non-farm payrolls release. According to Challenger, layoffs fell by 24.6 percent in the month of March.

The EUR/USD managed to erase all of yesterday’s losses thanks to a combination of stronger Eurozone data and weaker US data. In contrast to the service sector in the US, the service sector in the Eurozone actually saw faster growth in the month of March. Germany also reported a sharp rise in factory orders due to some unusual demand for big ticket items. The only disappointment was in Eurozone retail sales, which fell victim to weaker spending. Overall, the impact of the Value Added Tax on Germany and the Eurozone as a whole continues to be limited. This keeps a rate hike by the European Central Bank in play as ECB members continue to remain hawkish.

GBP/USD traded sideways today in a narrow range, letting EUR/USD catch up with its rise yesterday, despite the release of the UK naval crew. This may be due to the fact that most traders do not expect the Bank of England to raise interest rates tomorrow despite continual upside surprises in UK data. Consumer confidence hit a 4 month high while the service sector activity index accelerated from 57.4 to 57.6. The economy may be improving, but it has not improved enough to convince the majority of the monetary policy committee members to vote in favor of higher rates.

Service industry expands at slower rate WASHINGTON (AP) - The U.S. service sector expanded at a slower rate in March than in the previous month, a trade group said Thursday, reflecting the sluggish growth of the U.S. economy. The Tempe, Arizona-based Institute for Supply Management, an organization of corporate purchasing executives, said that its index of business activity in the non-manufacturing sector registered 52.4 in March, down from 54.3 in February. Wall Street was expecting a reading of 54.7. Readings above 50 indicate expansion. March represents the 48th consecutive month of growth in the non-manufacturing industries covered by the ISM report, which represent about 80 percent of the nation's economic activity. The survey also indicated that new orders and employment increased in March, but at slower rates. Prices paid by survey respondents for fuel and other goods increased dramatically, the survey found, jumping 9.5 points to 63.3. 'Members' comments in March indicate a concern with fuel costs, the economy and the impact on business conditions,' said Anthony Nieves, chairman of the ISM's survey committee. 'I think the entire economy is slowing,' Brian Fabbri, chief economist at BNP Paribas, said before the survey's release. Any reading below the index's 'historic average' of 57.5 'points toward weakness,' he said. The economy is 'growing, it's just not growing very fast,' David Resler, chief economist at Nomura Securities, said in advance of the survey's release. 'And most of the indicators we've seen are consistent with that.' Resler said that in addition to housing, slowing business investment in machinery and other goods has also weighed on the economy. 'Why it's slowed down is a bit of a puzzle,' he said, since all the conditions for business investment are in place: corporate profits are high, interest rates are still relatively low, and companies are putting their current equipment to heavy use.
  • #3,198
  • Apr 4, 2007 4:03am Apr 4, 2007 4:03am
Have to get this thread renamed to "Itme's news site".......
  • #3,199
  • Edited 2:18pm Apr 4, 2007 11:52am | Edited 2:18pm
Quoting starfire
Have to get this thread renamed to "Itme's news site".......
Right. But you would be completely missing the point. I performed over 500 trade experiments, and collected quite a bit of data. I made thousands of detailed posts over many months attempting to predict the movements of over twenty different currency pairs. A few people complained because my experiments weren't seemingly winning frequently enough. Now I've shifted gears and am starting to evolve and test an actual trading system. I've received alot of good suggestions and information from various people both in this thread and in my PM's (thanks, everyone!) to assist in the development of the trading system I'm shooting for. I've also created and offered some original and powerful mathematical perspectives on the subject of the trading system. Based on these insights I feel that a system with about 2:1 RRR and 75% win rate would be extremely profitable and practical. With this level of performance, one doesn't need to perform many trades to compound capital very quickly.

Since I'm aiming for only approximately one trade per week now, and incorporating Elliott Wave theory, Q Theory, Announcement Trading Science, and Macroeconomic Fundamentals, I could theoretically make hundreds of posts a week without even a single trade experiment. Most of the information I assess is not even in this tread. Only a small part of it. But the information I post here is part of the data I need to collect, analyze, collate, evaluate, and weigh looking for the perfect alignment of all factors in an ideal configuration. The information I post here is useful to me when presented and organised in this format. No other site organises this particular information in exactly this configuration. If they did, I wouldn't need to take the time to journal and blog this information here. The information I am collecting and organising in this evolving format is actually of a very particular nature, which some people who trade using Elliott Wave theory, fundamentals and announcements, will recognise.

I'm not a scalper. And I don't enter a trade when certain technical indicators line up. For me, it requires many hours of reading and analysis to properly evaluate a single trade potential set-up, and after that there's no guarantee that there will be a trade experiment coming out of it. For instance, yesterday I entered a long and detailed post concerning the GBP/USD. In it, I said " According to my semi-deterministic market model, if market sentiments continue USD negative then we will play out a new Fifth Wave upwards impulse pattern. In this scenario, we are undergoing the C wave of the downwards corrective Wave 4 on a lower order, targeting a reversal point at about 1.9710. This will afford a long trade opportunity targeting the top of Wave 5 at about 1.9900." In fact, GBP/USD fell to only 1.9717. After this it rose to 1.9772, past my Break Even stop reset point. But there was no entry opportunity for us, as the entry price point wasn't reached.

I'm not following twenty currency pairs at a time any more - only three. Following too many currency pairs with my approach causes an inevitable degradation of quality, which means non-system compliant trades and more losses. It's fine for experiments where the purpose is to gain knowledge, but not workable for a trading system where the goal is to win the trades at least 75% of the time. So with fewer currency pairs to monitor there will be fewer opportunities. And if I'm not at my computer and vigilant, I could miss one of the few system compliant trade opportunities, and thus have to wait a week or more for the next one to occur. For instance, GBP/USD reversed an intermediate scale trend on April 3 at 1.9825. But the Elliott Wave pattern was indeterminate on the 3 minute chart. So no trade for me! Perhaps in the next day or two it will descend to 1.9700 or lower. Then we may see a buy opportunity. Or not.

Sorry if the entertainment value of my thread is less. But the goal of all this is to evolve a practical high performance trading system, as I've repeated many, many times. This is my trading journal, and if my trading system involves performing one trade per month, then so be it. We hope to achieve 75% or better success rate with at least 2:1 RRR. That will be the highest performance of any trading system that I have yet to hear of or evaluate. Extraordinary performance requires extraordinary means.
  • #3,200
  • Apr 4, 2007 5:09pm Apr 4, 2007 5:09pm
Yes Itme this is your journal, and you are perfectly entitled to set your own goals and to decide what sort of information might be useful to you. I am also aware that your trading methodology is not solely based on an EW model. However, Bob Prechter has pointed out, and it is demonstrably true, that the same piece of news can be interpreted in many different ways, and argued to support an increase or a decrease in whatever market - increased interest rates have been used to support increases and decreases in stockmarket prices, etc etc. If you are trying to predict (a) the news, and (b) its effect, then good luck to you with another impossible goal! Even reacting to the news, most of us see the charts move, and then only later hear what it is (maybe you've got a better source than me). I can't see that your very detailed commentaries on the news are actually helping with your trading analysis - but of course, you only choose to reveal a very small part of your decision making process, and so maybe I am wrong in this. I have read your journal with great respect for the thoroughness and depth of your analysis, and also admiration for your courage and determination in continuing to post independent predictive analysis in the face of a lot of criticism - given that of course you will get it wrong at times. Your reversal points, like Fib numbers, pivot points, and other support and resistance levels, seem to be points at which the market will pause, pull back, and either continue with renewed strength, make another push through, or reverse. One thing I have learned from my own trading is that analysis and good trading methodology are almost completely independent variables. Your trading analysis (when you have chosen to share it) has been very instructive, and for that I thank you. I do not come to your thread for entertainment or for free trading signals, but to try to learn. And now, I can also come for Jamie Seattle's analysis or a nice news summary. I would post more comments if I thought I had anything useful to add - but given the lack of agreement among even experienced Elliotticians, I think I had better refrain. And I am also aware that current wave counts are very ambiguous, as is not unusual in a complex correction. Anyway, I wish you well in your very ambitious goal.
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