Low Risk, High Reward Trading Experiment

We attempted to catch the top of this trend several times and where stopped out each time. Then we set a more conservative entry price (1.7030-40) and missed the entry when it only went up to a top of 1.7113. But then we caught a retracement wave to short this new trend at 1.7060-75. Our analysis indicates a strong likelihood that this pair will progress down to the target of 1.6640, and even lower later to 1.6410.

Original trade signal:

Tuesday 5/23/2006 17:00 ET
TS#76 Sell EUR/AUD at market price of 1.7060 - 75 approx.
Stop is 1.7101 Target is 1.6640 Reward is min. 405 pips
Risk is max. 56 pips Reward : Risk ratio is min. 7.2 to 1
For testing purposes only.

The current time is Wednesday May 24 at 21:30 ET.

EUR/USD is trading at 1.2755 and GBP/USD is trading at 1.8692 in a very quiet market.

According to our model, EUR/USD will rise to about 1.2800 between 22:30 and 00:30 ET.

GBP will rise to about 1.8750 to 1.8760 between 21:30 and 00:30 ET.

They will both hit their tops at about the same time, some time in the above time range, and then reverse direction.

A good short trade opportunity will present itself at that time, of about 120 pips for the EUR/USD, and 150 pips for GBP/USD.

Good luck, traders.

This is an experimental model. Do not risk money on these predictions unless you confirm these moves by other means.

Well, I have to say, if GBPUSD and EURUSD drop, Itme was exactly right about them going up and then back down. GBPUSD was 5 pips short of 187.50, and EURUSD hit dead on 128.00. EURJPY is dropping too. EURAUD has dropped about 220 pips so far. Good job Itme.

I am not so sure this retracement is over could still rise this arvo without too much difficulty personally i will make the call closer to the zenith in the uk i.e. midday.
Timing is everything!

should read :this morning... not this arvo .Doh

Thursday 5/25/2006 9:45 ET

TS #79

Buy USD/CAD at market price - 1.1065 - 1.1075 or lower

Stop is 1.1049

Target is 1.1250

Reward (min.) is 175 pips

Risk (max.) is 31 pips

Reward :Risk ratio is min. 5.6 to 1

For testing purposes of this experimental system only.

"Morgan Magreggor said:

I am not so sure this retracement is over could still rise this morning without too much difficulty ......personally i will make the call closer to the zenith in the uk i.e. midday. Timing is everything!"

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Agreed, it is probable that EUR/USD will rise again to about 1.2810, in response to both technical factors and slightly disappointing US economic data this morning, before it initiates its large downwards move.

Similarly, GBP/USD will grind its way up to about 1.8750 before it initiates its migration southwards.

Thursday 5/25/2006 11:45 ET

Upon further examination, the indicated stop for this trade signal is somewhat vulnerable. Depending on your risk tolerance, we recommend possibly amending the stop to 1.1029 in order to ensure success of this trade.

Original trade signal:

TS #79 Buy USD/CAD at market price - 1.1065 - 1.1075
Thursday 5/25/2006 9:45 ET
TS #79
Buy USD/CAD at market price - 1.1065 - 1.1075 or lower
Stop is 1.1049
Target is 1.1250
Reward (min.) is 175 pips
Risk (max.) is 31 pips
Reward :Risk ratio is min. 5.6 to 1
For testing purposes of this experimental system only.

Thursday 5/25/2006 12:45 ET

TS# 80

Sell AUD/USD at market price (approx. 1.7570 to 1.7580 or higher)

Stop is 1.7606

Target #1 is 1.7447

Target #2 is 1.7376

Reward is min. 119 pips ( Target #1)

Reward is min. 190 pips ( Target #2)

Risk is max. 40 pips

Reward : Risk ratio is min. 3.0 to 1 (Target #1)

Reward : Risk ratio is min. 4.8 to 1 (Target #2)

For experimental testing purposes only. Trade at your own sole risk. Practise responsible risk management.

Funny, I have a bullish bias on the Aussie. Long from 1.7540. Especially the daily chart seems bullish with 3 touches on an upgoing trendline from March 29th. I know the 1.76 is a crucial barrier, but I think we will see it break. Time will tell.

I have closed at 0.7603 for now.

fxvision states:

Funny, I have a bullish bias on the Aussie. Long from 1.7540. Especially the daily chart seems bullish with 3 touches on an upgoing trendline from March 29th. I know the 1.76 is a crucial barrier, but I think we will see it break. Time will tell.
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You make a good point, FXVision. But we interpret the pattern differently. The price has bounced off of the March 29 trendline three times as you observe, and according to Elliott Wave Theory (in our understanding of it) the latest upwards corrective wave of the downtrend since May 12 is fulfilled. On the fourth attempt we expect the AUD/USD to pass through the March 29 trendline and carry on downwards to our targets.

An alternative interpretation is that the downtrend since May 12 in AUD/USD is A of an ABC. In this case AUD/USD will continue upwards and hit our stop. We will then lose 40 pips. This is not, for the reason you point out, a high probability trade, for it is foreseeable that we could loose this trade by a very viable Elliott Wave interpretation.

A way to protect oneself in a case like this is to move one's stop up to a break even position once the price moves away from the entry price by about 20 to 30 pips, if it does. One may lose a good trade through this technique, however, where there is some doubt about the pattern in the charts, this is probably a good strategy.

Since writing the above the price has risen just past our stop - to about .7608. This would be a much better entry postion, as an entry here with a stop at .7626 would be a much better reward trade for a much smaller risk of only about 22 pips.

Thursday 5/25/2006 15:30 ET

The price rose to .7608, hitting our stop by 2 pips, therefore our system suggests that we:

TS#80B

Re-enter short AUD/USD position at .7605, and adjust stop to .7626

Stop is .7626

Target #1 is .7494
Target #2 is .7447
Target #3 is .7376

Risk is 25 pips

Risk : Reward Target #1 is 4.3
Risk : Reward Target #2 is 6.3
Risk : Reward Target #3 is 9.2

__________________________________

Original trade signal:

TS# 80
Sell AUD/USD at market price (approx. 1.7570 to 1.7580 or higher)
Stop is 1.7606
Target #1 is 1.7447
Target #2 is 1.7376
Reward is min. 119 pips ( Target #1)
Reward is min. 190 pips ( Target #2)
Risk is max. 40 pips
Reward : Risk ratio is min. 3.0 to 1 (Target #1)
Reward : Risk ratio is min. 4.8 to 1 (Target #2)
For experimental testing purposes only. Trade at your own sole risk. Practise responsible risk management.

Yes, it's very interesting how two people can interpret a chart differently. Ask soso and Iso for starters, lol. After more analysis I decided to close my entire position and then wait and see what happens around this 1.76 barrier. We will be much wiser tomorrow.

Well fxvision, That is probably true. but the more information one has, the less opportunity. It is always a balancing act. Standing on the side I can see the validity in both opinions. I suppose that is why there is a market in the first place, buyers and sellers... LOL Scott

Thursday 5/25/2006 17:40 ET

TS #81 Perfect time to short GBP/USD - at 1.8753 - 60

Stop at 1.7771

Targets as before

For testing only of experimental trading system.

Thursday 5/25/2006 23:00 ET

Amend target to 1.1100.
Upon further analysis, we recommend exiting this trade at the abbreviated target of 1.1100 instead of 1.1250. The likelihood of the original target being met is not great.

Original Trade Signal:Thursday 5/25/2006 9:45 ET
TS #79 Buy USD/CAD at market price - 1.1065 - 1.1075 or lower
Stop is 1.1049
Target is 1.1250
Reward (min.) is 175 pips
Risk (max.) is 31 pips
Reward :Risk ratio is min. 5.6 to 1
For testing purposes of this experimental system only.

Friday 5/26/2006 2:55 ET

TS #78B Sell GBP/USD - Re-entry opportunity

For those not already in this trade, or those that have already cashed out, a new re-entry opportunity has occured.

Sell GBP/USD at 1.8725 to 1.8734 (or higher)

Stop is 1.8755

Original Trade Signal:

TS#78 Sell GBP/USD at market price - approx. 1.8825-35

Wednesday 5/24/2006 5:30 ET
We are sorry that the forum was down so that we couldn't post a sell signal at the top of the channel, at 1.8850 - 60 (we entered at 1.8851) but there is a bit of a retracement here, so one could enter a sell GBP/USD at 1.8825 - 1.8835.
Stop is 1.8861 Target #1 is 1.8730 Target #2 is 1.8575
Reward is min. 90 pips (270 pips for Target #2)
Risk is max. 41 pips
Reward : Risk ratio is min 2.2 to 1 (Target #1) and 6.6 to 1 (Target #2)
For testing purposes only. Trade at your own risk. Don't risk too much of your capital in any single trade. (5% is a maximum according to most advisers)

Friday 5/26/2006 8:45 ET

TS#78C Sell GBP/USD - Re-entry opportunity

For those not already in this trade, or those that have already cashed out, a new re-entry opportunity has occured.

PCE data release gives re-entry opportunity

THE upwards spike up on the EUR/USD and GDP/USD caused by the less than expected core PCE of +2.1% y-o-y is another great re-entry opportunity.

Catch this short position around 1.2820 on EUR/SD and 1.8700 on GBP/USD if you can. Our prefered trade is shorting GBP/USD though, as EUR/GBP is about to reverse and head down now, so GBP/USD will be the greater mover downwards.

GBP/USD is likely to rise up one more time to around 1.8710, so catch it somewhere between the current price of 1.8690 and there for an excellent shorting opportunity with low risk and high reward potential.

Your stop should be placed at about 1.8742 for GBP/USD.

Sell GBP/USD at 1.8690 to 1.8710 (or higher)

Stop is 1.8742

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Original Trade Signal:

TS#78 Sell GBP/USD at market price - approx. 1.8825-35
Wednesday 5/24/2006 5:30 ET
We are sorry that the forum was down so that we couldn't post a sell signal at the top of the channel, at 1.8850 - 60 (we entered at 1.8851) but there is a bit of a retracement here, so one could enter a sell GBP/USD at 1.8825 - 1.8835.
Stop is 1.8861 Target #1 is 1.8730 Target #2 is 1.8575
Reward is min. 90 pips (270 pips for Target #2)
Risk is max. 41 pips
Reward : Risk ratio is min 2.2 to 1 (Target #1) and 6.6 to 1 (Target #2)
For testing purposes only. Trade at your own risk. Don't risk too much of your capital in any single trade. (5% is a maximum according to most advisers)

ANy updates on the AUDUSD, USDCAD and EURJPY trades?