Thread designed to record set-ups and targets on index and FX pairs.
'A market is only your enemy until you understand it, then it becomes your best friend.'








Any questions, please feel free to ask.

From time to time i may openly state an opinion regarding direction of a set-up and wish to add that in no way am i recommending a trade. I am sometimes only in trades for a matter of minutes and can't always update as to entry/exits taken.
As always, markets are dangerous places to be and must be respected as such. Always use stop losses and never over-leverage; 3% of your pot as a maximum per trade. As always, YOU are responsible for your own trades! Happy pip hunting!

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Loads of info here... I was actually concentrating elsewhere, so although this was on one of my monitors, i didn't make any use of it. This is hindsight info, but it will certainly stick in my mind as of now... I was certain the rise earlier this morning (to the RHS of chart and off of the 261.8% fib of wave A), was a 5w signalling the end of the corrective move, so entering the trade on (what i deciphered as) the abc decline and with my stop a pip below the previous red bar (ending by the 261.8% fib and red line), i watched as it drifted down and took me out of the trade... I point blank refused to move my stop down to a pip below the start of the advance (point 0).

I set about investigating the 4 hrly & daily and realised this whole upswing is corrective. I was just working out what to do when the jobs data came out and unfortunately missed the massive rise.

Its always nice to get it wrong and lose some dough every once in a while isn't it?! )
The great thing about this kind of trade is, get it wrong and you will always find you are only stopped out by a mere handful of points, then watch it head very rapidly in the original direction without you on board, maximum pain and a great left hook applied by the market me thinks... the safe stop placement was as i said above, a pip below point 0... I should have known better!

Anyway, with the previous wave 4 (of 'C') now breached to the upside, it should be proof enough that this is the start of a larger 3rd wave and hence a lot more upside yet for this pair.... Now to find a low risk entry (as i keep saying... nothing is set in stone!)

Here's what i'm talking about;

Trouble with posting a chart or thought, is that when it changes, i am compelled to update it/them!

I'm now actually suspecting i may have been right with my expectation of the 5w short count, finishing where i suspected but possibly not as a 'C' wave... an 'A' of a larger correction. It fits with the rise, drop and subsequent rise being an 'abc' 'B' wave and also permits the previous 4th to be broken... Gonna stay out and watch instead...

*chart to follow*

I could never get the hang of Elliott! I'm much more of a 'look at the chart and follow the pattern', support, resistance trendlines, occasionally fib levels, MACD, rsi etc. Don't make many trades, just like them to be glaringly obvious when I do.

Agreed.... Elliott on its own doesn't amount to much imo. The problem being that Corrective moves look exactly like the inverse of Impulse moves with ABC's also respecting similar fib levels.. but knowing which fibs to apply and where is a huge part of the jigsaw.

You make a very valid point, however... most people feel compelled to trade whenever they are in front of the screen... having the discipline to sit and wait and stick to what you know is an art itself!

That's very good advice you two :) and one that I need to adhere to more often!

Toya, i looked at the FTSE and its got me a bit stumped, seems to be resistance just above us, which appears significant, it keeps trying to break above so if it does, a retest and we should be good for higher, otherwise i suspect we roll over and may actually have already begun... so to sum up i think it may go up... or down )

To try to explain my previous post, or at least to record my own thoughts. I have switched to the EurJpy. I think i was right to consider long (short term) on both this pair and the GbpJpy as per my original idea (the 4th of the 'C' wave down, on the Gbp, being breached on the way back up, on the jobs data spike earlier), however i think its trend change time and its actually only going to be an ABC correcting yesterdays/todays 5w down. I cant explain what i perceive to be the A&B waves beforehand though, so i will be a watcher for a mo... anyway, my reason for thinking this is from labeling the Eur tonight... first the daily;



So the bigger picture... the double ABC's around the middle fits with being first the 4th (subwave) of the 3rd and then the full 4th shortly afterwards once the 3rd was complete... all the measurements fit. With that in mind and switching to a smaller timescale to concentrate on the 5th wave;



so we have wave 3= 100% of wave 1, 2 is irregular, wave 4 retraces 50% of wave 3 and wave 5 has reached its popular 38.2% extension. The pullback appears to say that was the top... of course this is just my opinion based on what i've highlighted and its too early to trust it. I have had a nightmare day and probably should be having a beer right now instead.... anyway, i guess the next move is to concentrate on the move back up, of which we look to have completed the A&B already. If 'C' is in a small 5w and doesn't make a new high, we can look out to have started a larger ABC which will correct the whole 5w move since July (which was around 1400pips), even if its shallow, or Irregular its gotta mean 600+ pips south of here over the coming weeks, before we gear up for a fresh complete 5w back up higher... thats the theory... right where's that beer!

*edit 08/12/12; hmmmm there may be a possibility that i'm one count out... the 3&4 above might be 'iii'&'iv' of this particular third, with the 5th being the end of the 3rd. I've made this mistake a few times recently... will do some more work on it later*

Breaking it down even further, here is the 5th wave of the 5th wave (of the 5th wave!);



Looking at even this cycles minor 5th, it all fits. I will look at Fiber next to see if the recent drop is likely to continue (all imo!), but its time to unwind now. Have a good weekend all...

I'll leave the forex to you, Davai! Couldn't begin to do all that analysis... But I agree we've been testing around 5920 on the FTSE - I feel we may have reached the top there for a while; we'll soon see if that's correct!

Copied edited remark from above post 142;

*edit 08/12/12; hmmmm there may be a possibility that i'm one count out... the 3&4 above might be 'iii'&'iv' of this particular third, with the 5th being the end of the 3rd. I've made this mistake a few times recently... will do some more work on it later*

The more i look at it, the more it looks more likely... the double ABC again same as with the daily. I was obviously too tired last night! Honestly... mental state is also a big part of trading! It will mean that we are in the 4th (or just finished) right now and still have a blast north yet for the 5th of this degree. This can of course be extended, so its obvious to me the only safety will be to rely on the small time scales.

The reason for all of this? I'm looking to trial a bit of swing trading and see if i can ride a much longer phase. It goes against my usual style as i absolutely hate to stay in corrective moves and watch precious profit disappear time and time again, preferring to be in and out in succession. The problem is often missing the larger move while 'out' of a trade. That means an awful lot of work making small amounts and missing the larger portion...

All of the above charts are workings as to try to find the next big trend. As you can tell, however, it can be tricky and requires more (at this time) experience than i currently possess. This is a work in progress!

Trying to trade a wave 2 pullback to be positioned for wave 3 is proving to be lethal. The best trade and easiest to recognise is after the powerful wave 3 itself. If wave 3 doesn't extend (is not more than 1.618% of wave 1), and wave 4 retraces 38.2% of wave 3, you have a fantastic low risk trade, going with trend off of this fib level to trade the 5th wave. Your stop is a couple of pips inside wave 1 as wave 4 mustn't cross into this territory, therefore should be around a 1:3 R:R...

The reason that you probably find the kiwi generates easy to follow chart patterns against the greenback is that it's what I would describe as a 'single sided' pair.

By that, I mean most pairs and crosses are influenced by two distinct sets of newsflow. For instance, if you're trading fiber, then Europe's events will influence the pair, as will the newsflow out of the US. If both sets of newsflow are either positive or negative, then the pair can be a bit choppy until the market decides which side's newsflow carries most weight. If one side's newsflow is positive and the other side's newsflow is negative, then the moves will be more exaggerated as a result.

However, New Zealand as a country carries no real economic influence. It has no mineral resources, there are more sheep than there are humans, and they make some nice butter. But that's about the extent of it. The kiwi has historically been used sometimes for carry trades, but not at the moment. Therefore, there's unlikely to be any news coming out of NZ which is going to have any impact on the NZD/USD, and the pair is going to be almost totally influenced by the newsflow out of the US. This single-side aspect is what makes the chart easier to read and interpret.

The downside of this is that the minimal liquidity in the pair means retail punters will generally have to pay high spreads. Everything I've said about NZD/USD also applies to the EUR/NZD cross.

FTSE S/R line. Rejected yesterday, but teasing with it again now;

Very difficult to call wave structure with accuracy and i'm not getting many levels lining up, (usually means something is amiss), so not to be trusted, but just putting this out there;

I can't see an end in sight yet!

If the above is correct and regardless of whether its the 5th of the 3rd or the overall 5th, we should head higher from here (after a brief pullback this afternoon/evening), in a 3rd wave;

Somehow i managed to **** this trade up, despite watching it closely yesterday, pretty annoyed with myself, especially as i stated merely three days ago, its my fave trade, (the 4th wave pullback), admittedly, there was a bit more risk as wave 3 was extended;



Wave 5 might not be finished yet, but the 38.2% was primary objective, 16,100 being a round number was also going to provide res...

Euro about to turn down again?



Current move would be A&B (not 1&2) with 'C' to come

Turning back to the EurJpy again, its looking likely that i labeled the 4th of the third as the 4th itself again. Explains the confusion late last week. When i noticed it reversed at the 50% projection, it leads me to believe it was likely end of the 5th. If this is correct, we wont breach the blue line, so possibly a good risk/reward trade at present. Breach of this (a fresh HH) and its rethink time, there is still a count meaning the previous 1&2 was an A&B... I would prefer to wait to see a minor 5w short/abc retrace first off of the fib level (red line).




*Edit* Ok, a fresh high, so either 1&2 was an A&B, or its a much larger irregular. Can't see it being irregular as it would mean the down move was 'A' in three waves...

(I'm writing this for my benefit, i doubt anyone is following me and nodding in agreement!)

*Edit x2* sussed it i think... a small wave 'C';



No wonder i've been turned inside out with this one. Far too many possibilities until the HH earlier. Especially with an irregular 'B' wave. So a long at the lows got stopped out and a short at the highs likewise. Nice one. Malodyets mr.Market... Thie is why i'm preferring to stick with the 4th wave trades... far easier too determine and goes with the immediately preceding trend...

Same mistake again and again... previous labeling for cable, for the 3rd wave only. It doesn't change the respective levels, so the workings are all good, just that there was the 'real' 4th and 5th to come;

Fifth waves (and 'C' waves) can be tricky to trade, presenting themselves in several different manners; diagonals, expanding and contracting, (both of which can see wave 4 cross into wave 1) or in a regular impulsive structure. Here, breaking cables 5th wave down on a lower time frame, the 3rd wave gives it away again, leading to another set-up. Don't forget its not about pips, its about percentages;

Dax again, in post 149, i was expecting a small ABC pullback that afternoon/evening (11th). It happened but not before having a further blast north, so no brownie points there;



The larger ABC (4th) is not the one i have shown (expecting) in post 148. The size of this current cycle makes me believe it is indeed a 5th wave and probably finishing off (the larger) wave 3. That would mean a HH to come followed by a longer, deeper and more complex retracement, possibly lasting a week, before back on track to finish the year... The caveat is (and there has to be one with this kind of trending!), is that, if the previous larger ABC (ending on the 9th) was something more substantial, we could be playing out the overall 5th right now and once finished, get ready for a big drop... personally i don't think so... I reckon Mid Jan before putting the hats on... Just an opinion )

PS, the blue line... Wave 4 not entering wave 1 territory; what a fantastic R:R trade!

Might have to change my above view. Looks like it might be the overall 5th afterall. Got a few charts looking like some tops very near indicating dollar strength about to return. Risk off again?



16190 also relevant.

My earlier Euro call was dreadful and influenced slightly by the EurJpy chart, After i worked that one out i didn't bother to update the Euro chart. I now think the breach of the prior ABC can be explained like this;



The 4th wave allowed to breach the (iv'th) of the 3rd. I would normally expect only the 61.8% level for the top (as we reached on Friday afternoon), however, channel lines leave headroom for a little bit more. The channel lines (blue) working perfectly for predicting the end of wave 3 (connect 2&4, draw parallel off of top of 1 for end of 5), the second set obviously wont work the same due to the pullback of 2, thus we go off of the top of 3 for our parallel line... Well, we shall see... )