Low Risk, High Reward Trading Experiment

Friday July 21 at 10:45 ET

GBP/JPY fell to 214.90 after the recommended short at 216.44. It then bounced, offering a re-entry opportunity:

TS#131 Sell GBP/JPY at 215.80

Stop is 216.11

Target #1 is 211.00

Risk is 40 pips

Reward is 471 pips

Reward : Risk ratio is 11.8 to 1

For research purposes only

Note: this short trade was stopped out by a rise in price to 216.29 at 12:00 ET July 21.

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Previous comments:

GBP/JPY is dangerous <hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title -->I think GBP/JPY will rise gradually to about 216.30 or a bit higher, which would be the place to short it. But overall, I think it is a very difficult currency pair to predict using our methods. Stop would have to be at about 216.85 to be somewhat safe, so I don't prefer this situation.

If it rises to about 216.50, however, one could short it with a much better reward : risk ratio. It could do this, in which case it would be an excellent trade.

post script:

GBP/JPY rose to 216.44. That was the perfect moment to short it in a low risk, high reward trade.

Since the last comment, GBP/JPY fell 154 pips to 214.90.

Friday July 21 at 10:45 ET_

Re-entry opportunity TS# 116E Sell EUR/CAD at 1.4433

Stop is 1.4467

Target is 1.4000

Risk is 44 pips

Reward is 423 pips

Reward : Risk ratio is 9.6 to 1

For research purposes only.
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Previous trade signals and comments:
<hr style="color: rgb(209, 209, 225);" size="1"> Wednesday July 19 at 15:00 ET

Re-entry opportunity TS# 116D Sell EUR/CAD at 1.4306 - 1.4310

Comment: On Friday July 14 at 10:45 ET we advised "Exit TS# 116D Sell EUR/CAD" trade due to the likelihood of a major bounce. In fact it did bounce exactly there, but only 42 pips, before resuming its downtrend. The trend carried on to 1.4132, which is 308 pips below the minimum entry price. EUR/CAD then bounced up 178 pips to the current price of about 1.4310, which we believe is the top of the corrective upwards component wave. Thus we believe it is a good time to re-enter a short position on this currency pair.

Re-enter TS# 116D Sell EUR/CAD at 1.4306 - 1.4310
Stop is 1.4331
Target is 1.3950
Risk is 34 pips
Reward is 347 pips
Reward : Risk ratio is 10.2 to 1
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Friday July 14 at 10:45 ET

Exit TS# 116D Re-Enter Sell EUR/CAD at 1.4440 - 1.4450
Temporarily exit this trade at the current market price of 1.4241, for a minimum profit of 190 pips, as a significant bounce is expected.

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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

More details here:

http://www.forexfactory.com/forexfo...2FCAD#post72909

Friday July 21 at 11:00 ET

EUR/JPY rose to 147.86, taking out our stop of 1.4735 belonging to TS# 114C Sell EUR/JPY at 147.00 - 147.10.

It since fell 99 pips to 146.87, then bounced in a complex corrective wave pattern to the current price of 147.40.

Re-enter TS# 114D Sell EUR/JPY at 147.40

Stop is 147.55

Target #1 is 145.00

Risk is 18 pips

Reward is 237 pips

Reward : Risk ratio is 13.2 to 1

For research purposes only.

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Previous trade signals and comments:

Re-enter TS# 114C Sell EUR/JPY at 147.00 - 147.10 <hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title --><!-- message --> Note: the stop was too small. According to our system, it should have been at 1.4735. If necessary, re-enter at 1.4720 to 1.4725 and re-adjust stop.
Wednesday July 19 at 12:30 ET
The stop on this trade was too small, and was thus triggered by a few pips. We therefore advise re-entry at 147.00 - 147.10.
Re-enter TS# 114C Sell EUR/JPY at 147.00 - 147.10
Stop is 147.26
Target #1 is 145.00
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Update as of 5:30 ET Wednesday July 19:
As recommended earlier, sell EUR/JPY at 147.00
Re-entry opportunity TS# 114B Sell EUR/JPY at 147.00
Stop is 147.11
Target #1 is 145.00
Risk is 14 pips
Reward is 197 pips
Reward : risk ratio is 14.0 to 1

Friday July 21 at 11:30 ET

GBP/JPY has risen to within a few pips of the 24 hour upper trendline. This is a probable reversal point.

TS#131A Sell GBP/JPY at 216.22

Stop is 216.51

Target #1 is 211.00

Risk is 38 pips

Reward is 513 pips


Reward : Risk ratio is 13.5 to 1

For research purposes only

Note: at 12:00 ET July 21 GBP/JPY rose to 216.29, to touch the 2 day upper trendline.

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Previous trade signals and comments:

Friday July 21 at 10:45 ET
TS#131 Sell GBP/JPY at 215.80
Stop is 216.11
Target #1 is 211.00
Risk is 40 pips
Reward is 471 pips
Reward : Risk ratio is 11.8 to 1
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GBP/JPY is dangerous

I think GBP/JPY will rise gradually to about 216.30 or a bit higher, which would be the place to short it. But overall, I think it is a very difficult currency pair to predict using our methods. Stop would have to be at about 216.85 to be somewhat safe, so I don't prefer this situation.If it rises to about 216.50, however, one could short it with a much better reward : risk ratio. It could do this, in which case it would be an excellent trade.post script:


GBP/JPY rose to 216.44. That was the perfect moment to short it in a low risk, high reward trade.

Since the last comment, GBP/JPY fell 154 pips to 214.90.

Friday July 21 at 11:45 ET

Re-enter TS# 114E Sell EUR/JPY at 147.64

Stop is 147.81

Target #1 is 145.00

Risk is 20 pips

Reward is 255 pips

Reward : Risk ratio is 12.8 to 1

For research purposes only.

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Previous trade signals and comments:

Friday July 21 at 11:00 ET

EUR/JPY rose to 147.86, taking out our stop of 1.4735 belonging to TS# 114C Sell EUR/JPY at 147.00 - 147.10.
It since fell 99 pips to 146.87, then bounced in a complex corrective wave pattern to the current price of 147.40.

Re-enter TS# 114D Sell EUR/JPY at 147.40
Stop is 147.55
Target #1 is 145.00
Risk is 18 pips
Reward is 237 pips
Reward : Risk ratio is 13.2 to 1
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Re-enter TS# 114C Sell EUR/JPY at 147.00 - 147.10 <hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title --><!-- message --> Note: the stop was too small. According to our system, it should have been at 1.4735. If necessary, re-enter at 1.4720 to 1.4725 and re-adjust stop.

Wednesday July 19 at 12:30 ET

The stop on this trade was too small, and was thus triggered by a few pips. We therefore advise re-entry at 147.00 - 147.10.
Re-enter TS# 114C Sell EUR/JPY at 147.00 - 147.10
Stop is 147.26
Target #1 is 145.00
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Update as of 5:30 ET Wednesday July 19:
As recommended earlier, sell EUR/JPY at 147.00
Re-entry opportunity TS# 114B Sell EUR/JPY at 147.00
Stop is 147.11
Target #1 is 145.00
Risk is 14 pips
Reward is 197 pips
Reward : risk ratio is 14.0 to 1

Friday July 21 at 11:45 ET

Re-Entry opportunity TS #127B Sell USD/CAD at 1.1375 - 1.1400

Stop is 1.1416

Target is 1.1160

Risk depends on the entry price. USD/CAD could rise again to as a high as 1.1415. The higher the entry price, the lower the risk, and the greater the reward.

For research purposes only.
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Previous trade signals and comments:

Wednesday July 19 at 15:30 ET

Update TS #127A Sell USD/CAD at 1.1370<!-- / icon and title --> <!-- message -->
USD/CAD moved downwards as predicted to 1.1314, then bounced. The current price of 1.1358 appears to be the top of the complex upwards corrective wave, so this is a re-entry position for someone who is not already shorting this pair. Target #1 is 1.1175, 183 pips lower.
<hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title --><!-- message -->
USD favoring CPI data release this morning at 8:30 ET caused a spike in USD/CAD up to 1.1406. However, our stop adjustment procedure moved our stop up to 1.1409. So we are still active in our short USD/CAD trade.

Update as of 14:00 ET Tuesday July 18:

Following the last attempt to short USD/CAD at 1.1329, it fell quickly 69 pips to 1.1256, then corrected all the way up 119 pips to 1.1375.

We think that 1.1375 is the top of the upwards corrective swing trend, and since then it has completed a Wave 1 down and a complex Wave 2 up. It is in an excellent position to short now, at the top of the corrective wave.

TS #127A Sell USD/CAD at 1.1370
Stop is 1.1391
Target #1 is 1.1175
Risk is 25 pips
Reward is 191 pips
Reward : Risk ratio is 7.6 to 1

Price of USD/JPY fell 204 pips to 115.81, then bounced up 62 pips to 116.43. A complex upwards corrective wave is possibly underway.

The target is still within sight.

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Previous trade signal:

Wednesday July 19 at 9:00 ET

TS #126C Sell USD/JPY at 117.85
As predicted, USD/JPY rose to slightly higher than 117.85 ("USD/JPY should be shorted the next time it rises to about 117.50 - 118.00. The price 117.80 is an important resistance line. This may be the turning point, or slightly higher.")
Stop is 118.08
Target is 114.00
Risk is 25 pips
Reward is 383 pips
Reward : Risk ratio is 15.3 to 1

For research purposes only.

The USDJPY seems to be bringing the other JPY pairs up with it.

Yes, Yardie. USD/CHF did not bounce at all, it is still going down towards its target around 1.2280 to 1.2360. We think it may bounce strongly at bout 1.2360.

Both USD/CAD and USD/JPY bounced quite strongly, which brought GBP/JPY to form a quadruple top and EUR/CAD to retrace most of its downwards gains of July 12 to July 17.

USD/JPY is on its way down again, and USD/CAD will follow in due course.

The concurrent fall of GBP/USD and USD/JPY has the potential to create a very strong downwards move in GBP/JPY from approximately the current price level.

Friday July 21 at 14:15 ET

USD/CHF fell as predicted from 1.2450 to 1.2356 (94 pips) at 14:00 ET July 21. The target is 1.2335, which will likely be met. But there could be a sizeable bounce at around this level. We therefore suggest exiting the trade the next time it drops to 1.2360, taking about 87 pips of profit, and re-enter a little higher, after a corrective five wave set, or a complex corrective wave.

For research purposes only.
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Previous trade signals and comments:

Re-enter TS #128B Sell USD/CHF at 1.2450 <hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title --><!-- message --> During the night USD/CHF descended to 1.2416. It then bounced to 1.2450, which is a good re-entry opportunity. This is the top of a complex corrective wave pattern.

Re-enter TS #128B Sell USD/CHF at 1.2450
Stop is 1.2471
Target is 1.2335
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Update as of 21:00 ET Tuesday July 18
TS #128B Sell USD/CHF at 1.2548
Stop is 1.2561
Target is 1.2360
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Comment Friday July 21 at 5:30 ET:
USD/CHF fell 70 pips to 1.2381 one hour ago, and is now starting a bounce.

Comment Friday July 21 at 14:30 ET:
USD/CHF rose 23 pips to 1.2404 as predicted, and then proceeded to form a downwards five wave set, a component wave, descending 48 pips, leading down to 1.2356

Friday July 21 at 15:15 ET

The current price of AUD/JPY is 87.44.

AUD/JPY has been trading in a 100 pip range from July 14 to July 21. It is due for a breakout.

If it rises to 87.96 or above, then we can short it with a small stop and a large target.

If AUD/USD rises sooner or faster than USD/JPY falls, then AUD/JPY wil rise enough to hit our entry target. If the fifth wave of AUD/USD is incomplete, then it may rise to .7550 or higher. USD/JPY could rise again also in a complex Wave 4 corrective wave.

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Previous comments:

Tuesday, July 18, 19:15

To Purple,

"itme what you think of AUD/JPY?

It has formed a pin bar at top for past two days, and has bounced back several times rapidly in past from current level."

AUD/JPY, at 87.55, looks like a great opportunity on the 1 day charts. As far as the entry strategy is concerned, we expect another pulse upwards before the big reversal of the trend.

If it makes it up to about 88.25 again, it would be a low risk, high reward trade.

Friday July 21 at 15:45 ET_

Second Re-Enter Opportunity TS #130A Sell GBP/USD at 1.8590 - 1.8600

Stop is 1.8621
Target #1 is 1.8330

For research purposes only
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Previous trade signals and comments:
<hr style="color: rgb(209, 209, 225);" size="1"> Friday July 21 at 10:00 ET_
Re-Enter TS #130A Sell GBP/USD at 1.8590
Stop is 1.8621
Target #1 is 1.8330
Risk is 34 pips
Reward is 282 pips
Reward : Risk ratio is 8.3 to 1
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Friday July 21 at 5:00 ET
TS #130 Sell GBP/USD at 1.8550
Stop is 1.8568
Target #1 is 1.8330
Risk is 22 pips
Reward is 216 pips
Reward : Risk ratio is 9.8 to 1

One third of the forex game is gaining a working knowledge of the market, having a working computer (or two or more), a working internet connection (preferably two), working charts, a working broker, and some money. All these are no small feat.

The next third is learning how to trade, which involves predicting the market's moves, and money management. This is a nearly impossible feat.

The third requirement is psychology - becoming a master of one's mind, gaining self-awareness, and tuning one's psyche up mentally, spiritually and psychologically to near perfection. Once one has achieved the Zen state of perfect mental poise, the task begins of stabilising one's mind, imagination, intellect and emotions so that it is an integrated adamantine crystal consciousness, unswervable and unshakeable - fearless, objective, disciplined, honest, precise, positive and unwilling to hallucinate.

This last third is the hardest part for most of us.

No wonder so few people profit in this market!

Thanks for that explanation Itme.

I think AUD will go up till .7590 and than fall down sharply, till than this pair too wont show a much big move. I have been trying to short this pair since last week, everytime I move SL to breakeven and it gets triggerred.

Wednesday, July 26 at 11:00 am ET

Third Re-Enter Opportunity TS #130B Sell GBP/USD at 1.8473

Stop is 1.8514

Target #1 is 1.8330

For research purposes only
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Previous trade signals:

Friday July 21 at 15:45 ET_

Second Re-Enter Opportunity TS #130A Sell GBP/USD at 1.8590 - 1.8600

Stop is 1.8621
Target #1 is 1.8330
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Friday July 21 at 10:00 ET_
Re-Enter TS #130A Sell GBP/USD at 1.8590
Stop is 1.8621
Target #1 is 1.8330
Risk is 34 pips
Reward is 282 pips
Reward : Risk ratio is 8.3 to 1
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Friday July 21 at 5:00 ET
TS #130 Sell GBP/USD at 1.8550
Stop is 1.8568
Target #1 is 1.8330
Risk is 22 pips
Reward is 216 pips
Reward : Risk ratio is 9.8 to 1
<!-- / message -->

By the same criteria employed to recommend shorting GBP/USD at 1.8473, our system advises shorting EUR/USD at 1.2623

However, there is likely to be greater reward : risk ratio from shorting GBP/USD, which is why we favor this trade over shorting EUR/USD.

We just point out the above information for the interest of those who prefer trading EUR/USD.

Comment later: EUR/USD went up another 100 pips to about 1.2724 after the above comment was penned. This is an unexpectedly large rise in the EURO.

Does anyone know why this might have happened?

This rise certainly looks complete.

Upside potential is severely limited. If it breaks out lower, ride it down. Or - better yet, take a low risk, high reward short position near to the resistance level at about 1.2720

Comment on July 26 at 14:30 ET: the price of 1.8549 was just reached. The pattern looks complete now, or very nearly complete. Re-entry short GBP/USD is advised now. Confidence level is high.


Wednesday, July 26 at 14:00 ET

Fourth Re-Enter Opportunity TS #130C Sell GBP/USD at 1.8518

Stop is 1.8541

Target #1 is 1.8400

Risk is 27 pips

Reward is 114 pips

Reward : Risk ratio is 4.2 to 1

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Previous trade signals:

Wednesday, July 26 at 11:00 am ET

Third Re-Enter Opportunity TS #130B Sell GBP/USD at 1.8473
Stop is 1.8514
Target #1 is 1.8330

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Friday July 21 at 15:45 ET_

Second Re-Enter Opportunity TS #130A Sell GBP/USD at 1.8590 - 1.8600
Stop is 1.8621
Target #1 is 1.8330
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Friday July 21 at 10:00 ET_
Re-Enter TS #130A Sell GBP/USD at 1.8590
Stop is 1.8621
Target #1 is 1.8330
Risk is 34 pips
Reward is 282 pips
Reward : Risk ratio is 8.3 to 1
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Friday July 21 at 5:00 ET
TS #130 Sell GBP/USD at 1.8550
Stop is 1.8568
Target #1 is 1.8330
Risk is 22 pips
Reward is 216 pips
Reward : Risk ratio is 9.8 to 1
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Wednesday July 26 at 15:30 ET

TS #132 Buy USD/CAD at 1.1335

Stop is 1.1316

Target is 1.1450

For research purposes only.

[Note: this trade stopped out when USD/CAD fell to 1.1287 overnight July 27]

Wednesday July 26 at 16:30 ET

TS #133 Sell AUD/USD at .7618

Stop is .7645

Target is .7325

Risk is 31 pips

Reward is 289 pips

Reward : Risk is 9.3 to 1

For research purposes only.

[Note: this trade stopped out when AUD/USD rose to .7656 overnight July 27]
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Wednesday July 26 at 17:00 ET

Since we advised exiting the short position on Friday July 21 at 14:15 ET at a price of 1.2360, the price of USD/CHF went up strongly 186 pips to 1.2546. This would have been a great sell opportunity, as it had formed a clear complex A-B-C corrective wave at that point. Since then it fell 149 pips to 1.2397, which is the current price, at which point we advise exiting the sell position, and entering a buy position to catch the corrective wave.

Buy USD/CHF at 1.2397

Stop is about 1.2380

Target is about 1.2500.

This is not a low risk : high reward trade, just a test of our system.

For research purposes only.
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Previous trade signals and comments:

Update TS #128B Sell USD/CHF at 1.2450 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Friday July 21 at 14:15 ET

USD/CHF fell as predicted from 1.2450 to 1.2356 (94 pips) at 14:00 ET July 21. The target is 1.2335, which will likely be met. But there could be a sizeable bounce at around this level. We therefore suggest exiting the trade the next time it drops to 1.2360, taking about 87 pips of profit, and re-enter a little higher, after a corrective five wave set, or a complex corrective wave.
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Re-enter TS #128B Sell USD/CHF at 1.2450 <hr style="color: rgb(209, 209, 225);" size="1"><!-- / icon and title --><!-- message --> During the night USD/CHF descended to 1.2416. It then bounced to 1.2450, which is a good re-entry opportunity. This is the top of a complex corrective wave pattern.

Re-enter TS #128B Sell USD/CHF at 1.2450
Stop is 1.2471
Target is 1.2335
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Update as of 21:00 ET Tuesday July 18
TS #128B Sell USD/CHF at 1.2548
Stop is 1.2561
Target is 1.2360
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Comment Friday July 21 at 5:30 ET:
USD/CHF fell 70 pips to 1.2381 one hour ago, and is now starting a bounce.

Comment Friday July 21 at 14:30 ET:
USD/CHF rose 23 pips to 1.2404 as predicted, and then proceeded to form a downwards five wave set, a component wave, descending 48 pips, leading down to 1.2356