Nov 182013

As you know, this blog is there to help you learn how to use Elliott Waves. There are hundreds of examples of how one could be successful in the financial markets using this kind of technical analysis. There are also a few scattered examples of analysis that didn’t work out. Sometimes the analysis itself was wrong. At other times, the market just changed. The key point to bear in mind is one has to be consistent in his/her approach to trading in order to succeed. Also, success should be measured in the medium to long term. You cannot take just one or two trades and determine the method won’t work if you fail.Anyway, I thought it is a good idea to share with you a recent trade that members of the exclusive club took, and it didn’t quite go as per plan. Let us see how.

It was 31st October when I presented these charts. The first two showcased how wonderfully Elliott Waves were able to pinpoint accurately the top for the Euro. I used a 61.8% Fibonacci retracement and also confirmed its importance by measuring a 161.8% projection for the Wave C at 1.3820 levels.

EURUSD fails at the 61.8% Fibonacci retracement

The power of the 61.8% Fibonacci retracement

Wave C finishes at 161.8% projection

Wave C finishes at the 161.8% projection level

But what is the next trade idea? I saw the structure of the waves from 1.3830 and it looked like a double zigzag. If you have read my book “Five Waves to Financial Freedom” you would know that when we get a zigzag correction it often ends up above the top of wave 1.This was at 1.3560. However, I was willing to risk some money at 1.3610. I also reasoned that the second zigzag could travel deep. You can see these notations on the following charts.

A double zigzag correction in EURUSD

A double zigzag correction in EURUSD

The plan was to buy in 2 stages. One third at 1.3610 and the rest at 1.3560 with a stop at 1.3535, risking 40 pips to make at least three times that. But when the Euro made a low of 1.3582 and didn’t look like it was going to bounce, I sent out an email that we should get out if there was a recovery to 1.3630, and buy the full lot at 1.3560 (same stops). The Euro stayed afloat for some time, but it soon reached the second buy level. The supports around 1.3550 held for several hours, but the writing was clearly on the wall. I sent out another email saying that it might be a good idea to get out near the break-even level. But for all intents the trade was a goner.

EURUSD in a feeble bounce before sell off

EURUSD in a feeble bounce before sell off

What is the lesson here? Firstly, Elliott Waves don’t guarantee a profit. It does allow you to take early action to mitigate your risks. And when you are on the right track, it pays you handsome dividends. Secondly, we should be willing to accept that something is going wrong and get out of the trade quickly when such signals are presented to you. We should not stay married to a losing trade. Elliott Waves help you in the divorce from your position!

Sep 082012

The EURUSD has moved agressively higher. From an Elliott Wave perspective, I think that unless the Germans come out with a negating statement early next week, the Euro will continue to stay bid and could reach 1.2945/60 initially and later on 1.3145. Trade from long side by buying on supports now until we get get a close below 1.2645. (sorry brief, but this is how it will be for the next few updates)

May 022012

As kids, we have heard fables of how our poor young hero saw a gleaming diamond on his way to the school and that made him rich. Sometimes, the markets are like that. They offer us real gems for the picking, and all we need to do is to be alert.

Take, for example, the EURUSD. There was no question about the making of a diagonal triangle, and we know what happens when a diagonal triangle appears in a C wave position. Yes, the price will come off swiftly. You too could have traded this with very low risk to your capital. (As you know, WaveTimes is all about teaching you how to give yourself an edge in the markets).

Let us quickly look at the charts now. Study it carefully, and learn the lesson for the next time! Also, if you care about giving back to wavetimes, download this document from here, and share it with all your friends. (or just pass them the link!). See you next time.

Apr 052012

The EURUSD found support yesterday at 1.3105, quite precisely as anticipated using Elliott Wave analysis.(see yesterday’s outlook for the EURUSD). The recovery stopped at 1.3164 and the downmove has been aggressive. I think there exists a small chance for a clean out to 1.3005/1.2995 and if that happens, it should present us with a low risk buying level for the next few sessions, perhaps taking it back to 1.3160 after meeting some initial resistance at 1.3105 the prior low.
PS This analysis used a 10 minute chart, and clearly is meant for short term traders.

Apr 042012

My comments on MarketWatch a few days ago seems an understatement. No matter how fancy your charts are, and how imagiative you could be with attempting to figure out in advance how a complex correction will unfold, you are simpply shooting in the dark. This is why I went to great lengths to explain that whatever I have shown you on the chart last time could all be wrong. In a complex correction we should expect the unexpected. Trading a complex correction should be strictly for those with deep pockets and quick access to the markets.

I am presenting you with another chart, where I have made only a minor change to the count. Instead of the ‘X’ at 1.3002, I have placed a “b'”, which allows me to see a dip down to 1.3105 initially. We could later on go lower still to 1.2953, but I don’t want to discuss that before we see what happens at 1.3105.

Stay tuned! This is your live lesson on how to deal with complex corrections.