Low Risk, High Reward Trading Experiment

Monday, July 9 at 9:15 ET

TS#121 Sell USD/CHF at 1.2315 to 1.2325

Stop is 1.2353

Target is 1.2060

Risk is max. 41 pips

Reward is min. 251 pips

Reward : Risk ratio is min. 6.1 to 1

For research purposes only.

Monday, July 9 at 10:15 ET

TS#122 Sell USD/CAD at 1.1255 to 1.1270

Stop is 1.1281

Target is 1.1045

Risk is max. 30 pips

Reward is min. 206 pips

Reward : Risk ratio is min. 6.9 to 1

For research purposes only.
<!-- / message -->

Monday July 10, 2006 10:45 ET

TS #108C - Sell AUD/CAD at .8410 to .8425

AUD/CAD rose to .8425, taking out our stop at .8408. The upwards trend looks complete now, so our model indicates a re-entry of a sell position at .8410 to .8425

Stop is .8441

Target #1 is .8200

Target #2 is .8120

We posted this as a comment to the original post a few messages above. We repost it as a separate comment, because this looks like a great trade to us.

For research purposes only.

Monday July 10, 2006 12:00 ET

TS# 116C Re-Enter Sell EUR/CAD at 1.4330 or higher

Stop is 1.4368

Target is 1.3830

Risk is max. 46 pips

Reward is min. 492 pips

Reward : Risk ratio is 10.7 to 1
________________________________________________
Previous trade signal:

Friday July 7 at 13:00 ET
TS# 116B Re-Enter Sell EUR/CAD at 1.4270
Stop is 143.13
Target is 1.3910
Risk is 53 pips including spread of 10
Reward is 350 pips
Reward / Risk ratio is 6.6 to 1

Comment: This trade looks very good from a variety of perspectives. The stop is a little big, but the reward is high. Probability of success, according to our models, is quite high. To improve the trade, and to reduce the risk, one could put an entry order in to sell EUR/CAD at 1.4300. If it makes it to there, then the reward will increase by 30 pips, and the risk will be reduced to only 23 pips. The reward : risk ratio will increase to 380 : 23 = 16.5 to 1. There is a chance that the price won't reach 1.4300, but the reward for waiting would be significant.


For research purposes only.

Monday July 10, 2006 12:45 ET

TS #113B Sell GBP/CHF at 2.2660

Stop is 2.2686

Target #1 is 2.2175

______________________________________________________________

Previous trade signals:

Friday 6/30/2006 12:30 ET

TS #113 Sell GBP/CHF at 2.2635

Stop is 2.2656
Target #1 is 2.2175
Risk is max. 36 pips
Reward is min. 445 pips
Reward : Risk ratio is min. 12.4 to 1
In terms of reward : risk ratio and probability of success, we would rate this a good trade. It may require six or seven days, or it could happen very quickly.

For research purposes only.

Commentary:

7/3/2006 12:30 ET

This currency pair is a big mover at times. This trade has progressed about 100 pips down to 2.2530 so far, and is on track to reach its target hundreds of pips further down.

7/4/2006 10:30 ET

GBP/CHF fell to 2.2520 at 13:20 ET on July 3rd, then retraced all the way up to 2.2630 at 9:00 ET this morning.

True to form, this currency pair is moving in a larger range than any other right now. We think it is headed up to 2.2635 to 2.2640, at which point it will reverse and head south again.

7/4/2006 10:00 ET

As predicted, GBP/CHF reversed at 2.2632 and fell 112 pips to 2.2520. It should bounce, and then continue its downward trend towards 2.2500 and below.

Wednesday July 5 at 12:15 ET

As predicted GBP/CHF bounced all the way up to 2.2647 at 11:00 this morning. This is a top. It will come straigt down from here (as straight as anything moves in this market) towards its target of 2.2500 and below.

Monday July 10, 12:45 ET

GBP/CHF did not come straight down as expected but instead came down 109 pips from 2.2647 to 2.2538, then headed up again to form a double top at 2.2660.

itme

i was wondering how you are working your stops now. i read on your other thread that you were contimplating using a hard stop instead of a stop based on the 1 minute chart. just curious because i was watching the market and it looked as if your stop would have closed you out at 22686

This is not meant to be critical or so, as I am a fan of itme and enjoy reading his posts and/or comments on trading techniques.

But, how could GBP/CHF move sooo much (445 pips) in such a short time (seven days???) Is this for real? I see that all over the place itme says it is only an experiment...

Itme, are you trading this for real (demo or live)? How long would you hold to your trade in this case? I mean, the last time this pair even touched the area of 2.21 was MARCH 2005!!! To go for 2.21 again could take MONTHS?!?! Is this what you aim for?
I'm just confused on how this will be accomplished and curious, too.
So, no critics just healthy wondering

Peter.

Tuesday July 11 9:30 ET

The drop in the Canadian dollar due to a Bank of Canada data release provides another good low risk, high reward short trade opportunity.

TS# 116D Re-Enter Sell EUR/CAD at 1.4440 - 1.4450

Stop is 1.4466

Target is 1.3950

For research purposes only.

_____________________________________
Previous trade signals:
Monday July 10, 2006 12:00 ET

TS# 116C Re-Enter Sell EUR/CAD at 1.4330 or higher
Stop is 1.4368
Target is 1.3830
Risk is max. 46 pips
Reward is min. 492 pips
Reward : Risk ratio is 10.7 to 1
________________________________________________

Friday July 7 at 13:00 ET
TS# 116B Re-Enter Sell EUR/CAD at 1.4270
Stop is 143.13
Target is 1.3910
Risk is 53 pips including spread of 10
Reward is 350 pips
Reward / Risk ratio is 6.6 to 1

Comment: This trade looks very good from a variety of perspectives. The stop is a little big, but the reward is high. Probability of success, according to our models, is quite high. To improve the trade, and to reduce the risk, one could put an entry order in to sell EUR/CAD at 1.4300. If it makes it to there, then the reward will increase by 30 pips, and the risk will be reduced to only 23 pips. The reward : risk ratio will increase to 380 : 23 = 16.5 to 1. There is a chance that the price won't reach 1.4300, but the reward for waiting would be significant.


For research purposes only.

Tuesday July 11 9:45 ET

Fast rise to a new short entry opportunity zone.

TS #108D - Sell AUD/CAD at .8500 to .8510

Stop is 1.8521

Target #1 is .8200
Target #2 is .8120

For research purposes only.

_________________________________________________________

Previous trade signal:
Monday July 10, 2006 10:45 ET
TS #108C - Sell AUD/CAD at .8410 to .8425
AUD/CAD rose to .8425, taking out our stop at .8408. The upwards trend looks complete now, so our model indicates a re-entry of a sell position at .8410 to .8425
Stop is .8441
Target #1 is .8200
Target #2 is .8120
We posted this as a comment to the original post a few messages above. We repost it as a separate comment, because this looks like a great trade to us.

For research purposes only.

_____________________________________________________

Comments:

This trade was stopped out. A re-entry signal was issued below to sell at a slightly higher price of .8530 to .8540. This price was met after the trade signal was issued.<!-- / message -->

Tuesday, July 11 at 17:00 ET

GBP/JPY has almost completed its corrective rebound. GBP/JPY has risen 138 pips so far up to 210.91 from a provisional low of 209.53. According to our models, it will rise to about 211.00 - 211.20 and then reverse and continue with its downwards medium term trend.

TS# 115A Re-entry Sell GBP/JPY at 211.00 to 211.20

Stop is 211.26

Target #1 is 208.50

Note: Price rose to 211.29, 3 pips past our stop. We recommend re-entry at the current price of 211.23 or higher if possible.

____________________________________________________

Previous trade signal and comment:

Sunday, July 9 at 23:15 ET

Commentary on TS# 115 Sell GBP/JPY at 212.30 - 212.47
This trade has progressed quickly about 200 pips down to 210.25, and is due about now for a corrective rebound.
___________________________________

Wednesday July 5 at 12:30 ET
TS# 115 Sell GBP/JPY at 212.30 - 212.47
Stop is 212.61
Target #1 is 208.50
Risk is max. 40 pips
Reward is min. 371 pips
Reward : Risk ratio is min. 9.3 to 1

For research purposes only.
<!-- / message -->
<!-- / message --><!-- edit note -->

Tuesday, July 11 at 17:00 ET

We triggered our stop at .8521. There is considerable evidence that AUD/CAD has finally reached its ultimate high now. Therefore, our model indicates:

TS #108E - Sell AUD/CAD at .8530 to .8540

Stop is .8556

Target #1 is .8200
Target #2 is .8120

Note: price rose to .8557 already, hitting our stop. A further analysis indicates that .8560 is a likely target. With overshoot, we believe that one should enter the short trade at .8560, and place the stop at .8576


For research purposes only.

__________________________________________________

Previous trade signals:

Tuesday July 11 9:45 ET
Fast rise to a new short entry opportunity zone.
TS #108D - Sell AUD/CAD at .8500 to .8510
Stop is 1.8521
Target #1 is .8200
Target #2 is .8120
__________________________________________________ _______

Monday July 10, 2006 10:45 ET
TS #108C - Sell AUD/CAD at .8410 to .8425
AUD/CAD rose to .8425, taking out our stop at .8408. The upwards trend looks complete now, so our model indicates a re-entry of a sell position at .8410 to .8425
Stop is .8441
Target #1 is .8200
Target #2 is .8120
We posted this as a comment to the original post a few messages above. We repost it as a separate comment, because this looks like a great trade to us.

For research purposes only.<!-- / message -->
<!-- / message -->

Tuesday, July 11 at 17:30 ET

EUR/CAD short trade was stopped out by the rapid rise in USD/CAD caused by the Bank of Canada interest rate announcement this morning. Our models indicate that it has topped out, or is near to topping out. Therefore,

TS# 116E Re-Enter Sell EUR/CAD at 1.4470 - 1.4480

Stop is 145.11

Target is 1.3950

Risk is max. 51 pips

Reward is min. 510 pips

Reward : Risk ratio is 10 to 1

For research purposes only.
________________________________________________

Previous Trade Signals and Comments:

TS# 116D Re-Enter Sell EUR/CAD at 1.4440 - 1.4450

Tuesday July 11 9:30 ET
The drop in the Canadian dollar due to a Bank of Canada data release provides another good low risk, high reward short trade opportunity.
TS# 116D Re-Enter Sell EUR/CAD at 1.4440 - 1.4450
Stop is 1.4466
Target is 1.3950
_____________________________________

Monday July 10, 2006 12:00 ET

TS# 116C Re-Enter Sell EUR/CAD at 1.4330 or higher
Stop is 1.4368
Target is 1.3830
Risk is max. 46 pips
Reward is min. 492 pips
Reward : Risk ratio is 10.7 to 1
________________________________________________

Friday July 7 at 13:00 ET
TS# 116B Re-Enter Sell EUR/CAD at 1.4270
Stop is 143.13
Target is 1.3910
Risk is 53 pips including spread of 10
Reward is 350 pips
Reward / Risk ratio is 6.6 to 1

Comment: This trade looks very good from a variety of perspectives. The stop is a little big, but the reward is high. Probability of success, according to our models, is quite high. To improve the trade, and to reduce the risk, one could put an entry order in to sell EUR/CAD at 1.4300. If it makes it to there, then the reward will increase by 30 pips, and the risk will be reduced to only 23 pips. The reward : risk ratio will increase to 380 : 23 = 16.5 to 1. There is a chance that the price won't reach 1.4300, but the reward for waiting would be significant.

Wednesday, July 11 at 4:15 ET

EUR/CAD just rose to 1.4470 to trigger our entry. It should now proceeed down now to our target which is is 1.3950

Wednesday July 12, 2006 2:45 ET

The following trade signal to short GBP/CHF was triggered, when the price rose to 2.2678, missing the stop by 8 pips. The price then fell quickly 85 pips to 2.2593. The price then bounced back up to 2.2660. We think it will be heading south again now.

We interpret this downwards and upwards move to be Wave 1 down (impulse) and Wave 2 up (corrective) of the beginning of a new downwards trend.

Wednesday July 12, 2006 at 7:00 ET

GBP/CHF rose to 2.2690, 4 pips past our stop. According to our stop adjusting procedure, the stop should have been adjusted to 2.2698, which is 8 pips above the new high. GBP/CHF then fell quickly to 2.2645. Re-enter short position if necessary if it rises again to close to 2.2690. New stop should be 2.2711. It was due to an error in executing our analysis that the original entry was too soon.

_____________________________________________________

Trade signal:

Monday July 10, 2006 12:45 ET
TS #113B Sell GBP/CHF at 2.2660
Stop is 2.2686
Target #1 is 2.2175
Risk is 40 pips
Reward is 470 pips
Reward : Risk ratio is 11.8

Wednesday, July 11 at 4:15 ET

TS# 115B Re-entry Sell GBP/JPY at 211.60

Stop is 211. 86

Target #1 is 208.50

Note at Wednesday, July 11 at 6:30 ET: GBP/JPY rose to 211.99, 13 pips past our stop, as it rose to the 20 day trend line. There is a strong chance that this is the top of the upwards trend. Re-enter sell position at 211.80 to 212.00, on a rise. Stop is 211.12

___________________________________

Previous trade signal:

Tuesday, July 11 at 17:00 ET

GBP/JPY has almost completed its corrective rebound. GBP/JPY has risen 138 pips so far up to 210.91 from a provisional low of 209.53. According to our models, it will rise to about 211.00 - 211.20 and then reverse and continue with its downwards medium term trend.

TS# 115A Re-entry Sell GBP/JPY at 211.00 to 211.20

Stop is 211.26

Target #1 is 208.50

Wednesday, July 12 at 4:45 ET

TS# 123 Sell USD/CAD at 1.1342

Stop is 1.1356

Target #1 is 1.1075

Target #2 is 1.1000

Risk is 19 pips

Reward is 262 / 337 pips

Reward : Risk Ratio is 13.8 / 17.7

For research purposes only.

Comment:

Wednesday July 12 at 13:45 ET

Following the balance of trade info for USD and Canada today at 8:30 ET USD/CAD first went down, then up to 1.1398, hitting our stop which was at 1.1356.

From the perspective of the 1 day chart, 1.1400 appears to be a likely completion point for the upwards consolidation / corrective cycle.

Our model therefore indicates taking a short position on a rise to about 1.1375 to 1.1380 if it occurs. Stop is 1.1405

ITME

Any thoughts on GBP/USD ?

Bear

Wednesday, July 12 at 6:30 ET

Below we advised going long on GBP/USD at 1.8365 to 1.8375, with stop at 1.8348. Following this suggestion GBP/USD rose 185 pips to 1.8480.

It didn't go all the way to our target of 1.8550 to 1.8600, however. Instead it turned around at 1.8480 and came sharply down 172 pips to 1.8308.

It is currently bouncing, probably up to about 1.8365 - 1.8375, where it will reverse and head on down to finish its downwards swing, carrying it to about 1.8270, and then head up again for a strong uptrend with a target of 1.8550 to 1.8600, most probably 1.8583.

The strategic trade is to short GBP/USD at about 1.8585

________________________________________________________-

Previous trade signal and comments:

Monday, July 9 at 9:15 ET
TS#120 Buy GBP/USD at 1.8390 to 1.8400
Stop is 1.8373
Target is 1.8550 to 1.8600
Risk is max. 31 pips
Reward is min. 146 pips
Reward : Risk ratio is min. 4.7 to 1

For research purposes only.

Commentary:

Monday, July 9 at 9:45 ET

This trade was quickly stopped out by a fall to 1.8367.

This lower price looks like the bottom of the downwards trend. Our model indicates re-entry at 1.8365 to 1.8375, with stop at 1.8348.

GBPJPY USDCAD and I believe EURCAD (barely) stopped out.

Yardie, I confess, that my frequent trade signals, re-entries, comments, changes to trades, etc. is getting a bit confusing, but you are 100% wrong in your above statement. You need to check the time of each signal or comment carefully. Sometimes there is an error in the time or day, but I try to be as accurate as possible to minimize confusion.

"GBPJPY USDCAD and I believe EURCAD (barely) stopped out."
______________________________________

Regarding GBP/JPY:

Current update as of Thursday July 13 at 14:00 ET:

We were stopped out for what seems the hundredth time on this currency pair, when it rose to 212.60 (so far). Trading the cross currencies is a different game than trading the majors in some ways. We are studying to try to determine the salient differences in the behaviour of the majors and the crosses.

Current update as of Thursday July 13 at 1:30 ET:

GBP/JPY as predicted above rose to 211.95, where we advised entering a sell trade with a stop of 212.12 (the above recommended stop of 211.12 was obviously a typo). It subsequently fell to 211.39 and then bounced back up to 211.92, which would present another re-entry sell opportunity.

Last signal and comment:

Wednesday, July 12 at 4:15 ET

TS# 115B Re-entry Sell GBP/JPY at 211.60
Stop is 211. 86
Target #1 is 208.50

Note at Wednesday, July 12 at 6:30 ET: GBP/JPY rose to 211.99, 13 pips past our stop, as it rose to the 20 day trend line. There is a strong chance that this is the top of the upwards trend. Re-enter sell position at 211.80 to 212.00, on a rise. Stop is 211.12

______________________________

Regarding USD/CAD:

We missed issuing a signal to sell at the peak, but recommended selling on a rise. But the rise never came, so we aren't in a trade in this currency. We were, however, correct it seems in identifying the top of the medium term swing trend:

Wednesday July 12 at 13:45 ET

Following the balance of trade info for USD and Canada today at 8:30 ET USD/CAD first went down, then up to 1.1398, hitting our stop which was at 1.1356.

From the perspective of the 1 day chart, 1.1400 appears to be a likely completion point for the upwards consolidation / corrective cycle.

Our model therefore indicates taking a short position on a rise to about 1.1375 to 1.1380 if it occurs. Stop is 1.1405

_____________________________________________

Regarding EUR/CAD:

Current update as of Thursday July 13 at 14:00 ET:

The trade is still active, and has progressed down to 1.4332.

The last comment was as follows, indicating that we shorted this pair at 1.4470, and are in a profit mode now:

Wednesday, July 12 at 4:15 ET

EUR/CAD just rose to 1.4470 to trigger our entry. It should now proceeed down now to our target which is is 1.3950

Thursday July 13 at 3:45 ET

TS #124 Sell GBP/USD at 1.8387

Stop is 1.8408

Target is 1.8270

Note: stop was a little too close, or entry too low. The price of 1.8411 was just met. We think that this is the actual top. Re-enter if necessary.

_______________________________

Current update as of Friday July 14 at 3:30 ET:

The corrective wave refered to below was larger than expected, carrying GBP/USD a few pips higher to 1.8445, which formed a double top, before continuing with the downtrend a distance of 90 pips to 1.8356. This is the bottom of the "B" of the ABC Wave 4 upwards corrective wave. The price will now head upwards about 134 pips (.73%) , with a likely target of 1.8490.

________________________________________________

Yesterday's update as of Thursday July 13 at 14:00 ET:

GBP/USD price of 1.8411/17 was not the top, only top of an A of an ABC complex corrective wave upwards. (This is a common mistake we have made in the past, mistaking the top of A for the top of the corrective ABC wave pattern.) The price rose again higher, taking out our stop as it has done many times before, after falling in a Wave B and then rising in a clear Wave C to a probable top of the swing wave at 1.8466 . This was a prime entry opportunity for a short at the top of a corrective upwards swing wave.

The price then fell in the first downwards component wave to 1.8383, then retraced in the second component corrective wave up to 1.8431, which presented a re-entry short opportunity for those who failed to go short at 1.8466.

___________________________________________

Previous comment:

Analysis of future movements of GBP/USD <hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title --><!-- message --> Wednesday, July 12 at 6:30 ET

Below we advised going long on GBP/USD at 1.8365 to 1.8375, with stop at 1.8348. Following this suggestion GBP/USD rose 185 pips to 1.8480.

It didn't go all the way to our target of 1.8550 to 1.8600, however. Instead it turned around at 1.8480 and came sharply down 172 pips to 1.8308.

It is currently bouncing, probably up to about 1.8365 - 1.8375, where it will reverse and head on down to finish its downwards swing, carrying it to about 1.8270, and then head up again for a strong uptrend with a target of 1.8550 to 1.8600, most probably 1.8583.

The strategic trade is to short GBP/USD at about 1.8585