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A trade that went wrong

Posted on January 31, 2013 by Ramki Ramakrishnan

Hello Folks!

Well, it is about 3 weeks since my last post here, and many of you must be wondering if I have forgotten you! Of course not. WaveTimes will always be around as long as I am. The paid service has been keeping me busy as well. And during January, I made a quick trip to India to attend the wedding of my friend’s son…..
Anyway, here I am, boldly sharing with you a trade that went wrong in the paid service. First, read the trade idea carefully, and then let us figure out what went wrong.

The trade was first posted on 6 Jan 2013 as follows:

Sometimes we arrive at a fork in the road. We can see clearly both the roads beyond, but we don’t know which one to take. Elliott Wave analysis of Micro Technologies India Ltd has brought us to such a fork. We have either completed a 3rd wave that traveled 161.8% of the first wave, or we have completed an extended 5th wave. The implications are profound. If an extended fifth wave has been completed at the Rs 38 level, we should soon be on our way to wave ii of the fifth, and this comes at the Rs66 level. On the other hand, if we have just seen a 4th wave unfold as a triangle, we should look for one more move down and then a recovery. What should we do?

15 Jan 2013 update
MICT came to a low of 41.60 today. As your stop is below 38, at this level you are risking less than Rs 4 per share. I am considering we are all LIVE on this trade. Will post an update when a clear move happens on either side.

(Then on 26 Jan, we bit the bullet)
26 Jan 2013 update
We have been stopped out on this trade, losing around Rs 4 per stock. Thankfully, we had kept the position small because we were forewarned that although the returns were attractive if it worked, there was a clear possibility of the count being wrong, and that we could go down all the way to below Rs 32. There is no doubt that some of you are disappointed, and perhaps this is a good time to consider if this service is really for you. Please be aware that professional traders take small losses quite regularly because when they win, it more than adequately compensates for the small losses. However, in order to survive for the big day, you need to keep your trade size reasonably small. No single loss should upset you too much. If this is not the case, then trading is not for you! Most beginning traders give up because they trade too big a position hoping to strike it rich quickly. Unfortunately, in the real world, such notions are pure fiction.

Let us remain optimistic. Our Nifty Trade was a clear winner and there will be many such opportunities going forward
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NOw what do you think we did wrong? Unless you are an arm chair analyst, you will realize that we were following a plan. We had identified the opportunity and the risk associated with it. We knew how much to risk, and when to get out. Only Elliott Waves give these advantages, the edge.

Posted in Trading Tips | Tagged Elliottwave, trading lessons | 9 Comments

Recent trades

Posted on January 7, 2013 by Ramki Ramakrishnan

Hello everyone..as promised, I will share with you an occasional trade that was sent to the members of the exclusive club. On 3rd January I had recommended trying long EURUSD around 1.3110 with a 30 pip stop, I was betting that we will get a fifth wave type recovery, notwithstanding the fact that there were negative divergences in the daily chart. The support at 1.3080 held for a few hours, and the currency pair bounced around a bit. But eventually it gave way and went all the down to 1.2998. So yes, we had taken a small loss there. I am mentioning this here so you realize that WaveTimes is very transparent. We never trade with a rear-view mirror! Our aim is to capture a good move while keeping losses under control. I had also sent to the members the first chart below, suggesting that Gold will experience weakness from around 1690 and head to 1630. Take a look.

And sure enough, after a brief struggle above 1690, it came off quite aggressively to 1627. Here is the current chart of Gold.

I have recently posted a trade idea covering an Indian stock. (By the way, I now have a direct bank transfer option for members from India). This year promises to be exciting. Our mission is to be alert to low-risk trades. The key to success lies in taking signals whenever they show up. Some will work, some will fail. But those that succeed will work very well, and more than offset the setbacks. There are few approaches that work as well as Elliott Waves. Combine that with sound money management, and you have an edge that is invaluable. All the best in 2013.

10 Comments

Elliott Wave Analysis of National Building Const Corp Ltd

Posted on January 6, 2013 by Ramki Ramakrishnan

Wow! From a low of Rs 73 in May 2012, National Building Construction Corporation Ltd, an Indian company that offers project management, consultancy services and real estate development etc, has climbed to Rs188. Can this rally be sustained, and if yes, how high can it go? Elliott Wave analysis shows we have reached a first key level already at 188.50, being 38.2% of the distance from 0 to 3 (Remember this from my book “Five Waves to Financial Freedom”?) However, is this the end of the move? The fifth wave seems a bit incomplete and shoudl we break above the 188.50 level the stock could easily run higher to the Rs 212 level, which is the 61.8% measure of the 0-3 distance. Also, when we draw an Elliott Wave channel, by connecting the bottoms of waves 2 and 4 and drawing a paralled via the top of wave 1, we see that the 212 level could be reached in the next week or so. That is about 15% higher than current levels, and so is something traders can keep an eye on.

Remember, this blog aims to teach you how to use Elliott Waves. It is not trading advice! Good luck Ramki

Posted in Uncategorized | 5 Comments

JPY, USDYEN Elliott Wave Analysis of USDYEN

Posted on December 30, 2012 by Ramki Ramakrishnan

I have often stated in this blog that we should use Elliott Wave Analysis to aid us in our trading decisions. Some people mistakenly believe that the goal of Wave Analysis is to make accurate predictions, and spend a great deal of time verifying i ftheir count is correct. I am also aware that some analysts showcase their wave-counting skills when things go right. Wave Times is different. I would like you to see how my wave count in USD/YEN was actually wrong, but the direction was right. I have no hesitation is accepting that my counts are often wrong, although it will become evident only with hind sight. My approach to the market is to use this invaluable tool in making the right trading decisions. Start by looking at my Elliott Wave update of 23 July 2012. (An easy way to get there is by looking at the menu, under Forex, and choosing JPY). In that update, I has suggested to sell the USD on any recovery for a move down to 77.20 and eventually down to 76.70. The USDYEN went up to 79.66 on 20 August and then came down to a low of 77.11. Note two things here. (a) it did not reach 76.70 and (b) in that update I had counted the waves as a 5-wave downmove. Both are wrong. But did it matter to the trader? Of course not. He/she knew that 77.20 was a good level, and some action needed to take place there. In today’s new update, I present you with an altogether new wave count of USDYEN.

You can see that I am now calling the 77.11 low as the wave 2 low. As you know, corrections can never be in 5 waves, so my July wave count was wrong The next chart shows you how you could have figured out where the first wave up would end.

In the third chart, you can see how I am breaking down the third wave into its components. I am also pointing out how I decided that we are in an extending third wave. This is a delicate point that you should take time to understand. Supposing I had labelled the green wave 1 as the 3rd wave, then the subsequent decline would have overlapped the top of Blue wave 1. That would have made me bearish if I was only looking at wave counts. But I would have been hesitant to buy after that. But the sharp recover that followed left me in no doubt that an extension was beginning. I had actually called up my clients and told then that we are now entering a huge bull run in the USDYEN, and importers from Japan should now be patient as the Yen was going to weaken significantly. If you had read my book “Five Waves to Financial Freedom” I have covered this phenomenon. If you have a short wave 3 and an overlap followed by a sharp rally to a new high, get ready for an extended third wave!!

The final chart is a close up view of the extending third wave. I am looking for a move to 88.40 at least, but the path to that could invove a pull back. Don’t sell to capture this correction. Instead, be alert to buy at a good support. Around 84.80-85.00 is decent initial support. As always you need to have stops on any position, but if you get stopped, be willing to jump back into the bull camp the moment it starts steadying and moving up again. I wish you the best of luck. (By the way, I am going to be in India to conduct a private seminar in the third week of January. Just thought will let you know) -Ramki (PS I posted this via email, after testing it out last week! Not sure if the formatting will appear correctly though…so please bear with me)

Posted in Jpy | 22 Comments

Elliott Wave Analysis of Home Depot

Posted on December 27, 2012 by Ramki Ramakrishnan

Elliott Wave Analysis of Home Depot shows some interesting possibilities. I recollected having posted on Home Depot some time ago, and looked it up. I suggest that you do the same, as it is a learning experience. That old post which appeared on Forbes did not work out as anticipated. The dip was shallow and the stock started climbing again. What did we learn from that? (a) There are no guarantees in the market (b) We should always have a stop (c) We should be willing to turn around and do the opposite if the wave count shows an extension is in progress. However, these are easier said than done. In spite of these difficuties, I can confidently say that few other approaches to the market gives as good results as Elliott Waves. Hence, we should take such adversity in our stride, and profit from those instances where it works.

Today I am presenting you with several Elliott Wave charts of Home Depot. There are comments on each of them, explaining my wave counts. Study them and see how I am arriving at my conclusions. An easy way to read them quickly is to open each chart in a new tab and then look at them one by one. As always, WaveTimes is a place where you come to learn Elliott Wave analysis. Good luck.