Trade with an edge using Elliott Wave Analysis

I had looked for Euro to find good offers at 1.3045 levels and recommended a sell at 1.3037 with a stop at 1.3057. The currency did not even pause at either level and reached a high of 1.3294. Every once in a while we will encounter such a situation, and you need to be prepared for it. The lesson here is (a) trade a position size that will keep you in the game  and (b) always keep a stop. The second point is especially important because many people think that a good analyst can ‘predict’ the market accurately most of the time. Unfortunately this is not true, What I am capable of doing is to give you a carefully evaluated report of what I think the market is likely to do. The key words are “think” and “likely”. True, I have been successful at calling lots of turns accurately. But there is no guarantee that the next call will be correct. So you really have to assume that every call I make is  judgmental, and hence the amount you risk should be just what you can afford to lose on that trade, yet keep you ready to take the next call! Here is your chart on Euro for today with comments on it. Enjoy.

It looks like short-covering is a bit overdue in EUR/USD. Any fast break above the triple top at 1.2585 should easily take us to the mid 1.27s. But the fun will start up there. Stops will really kick in if the Euro breaks above 1.2750 by more than a few points. As a low-risk trader, we should wait for such an event and place our carefully chosen sell order somewhere near 1.2940. (This level will change if the Euro doesnt get to our sell level by London noon time tomorrow). Our stops need not be to far away, lets agree on 15 pips. If it works out, then we should be richer by about 200 pips. That’s a nice juicy risk-reward ratio, but don’t get emotional now! Only money in the bank is real money. We could still end up losing those 15 pips, but unless we are willing to take SOME chance, we should not even be in the trading game. Enjoy! Ramki