Archive for the ‘Complex wave’ Category

Complex Elliott Wave of EURUSD (daily and weekly charts)

On September 22, I successfully exited after being short EURUSD for two weeks from 1.3960 to 1.3450. 1.3450 was my target and I did not care how much further it’d go down from there. The bottom was 1.3146. Soon after I expressed my view that EURUSD may not get downward pressure for long from there as in the previous post, EURUSD started to rebound strongly. Actually I had been anticipating a EURUSD rally after the pessimism as you can see unrealized X in the chart I posted on September 5th.

Now looking forward in the weekly chart, I am split into the two slightly different scenarios. Scenario #1 is telling me that b has been marked and EURUSD will rally towards X (1.5350 or higher) without making new low since Oct 4:

In Scenario #2, I am seeing a possibility that the current rebound is .b of uncompleted b , so EURUSD will go further down to 1.2450~1.2500 in coming weeks:

Below is the daily chart if I take Scenario #1. In the very short term, I may be able to take short position from b to c. But I have not made up my mind to participate in this trade. If anything, I’d be conservative since my view is split in two scenarios.

Update on EURUSD and gold

EURUSD gradually formed a short-term bottom, and struggled to reach over 1.4300 last week, followed by a sudden drop to 1.4100 to the end of the week. I’m still thinking this is just B of b, meaning EURUSD will try 1.4385 to complete the upward flat wave b. But just in case the rebound had faded already, I set my stop sell order at 1.4038. I may cancel this order if I confirm EURUSD is still in wave b.

I prefer to think gold’s rally has not completely ended. The current nervous price action shows the characteristics of Wave 4. I did finer Elliott wave analysis in the 180min chart:

I give enough time to gold price to swing on the seesaw. There is a good possibility that gold goes down to $1460 level before resuming the rally.

Sell AUDJPY at rally and buy AUDUSD at dip?

The earthquake and tsunami that hit Japan shocked the world, and the global equity markets plunged. It was the one more and even more horrifying event to the world that was already busy following the news from the Middle East. Surely it made the price of everything from stocks, bonds, gold to oil volatile.

Surely at first, I suspected the massive decline of Japanese stock market becoming the catalyst of the greatest risk aversion after 2 years of what Elliot Wave follower believe to be the massive bear market rally…or should I call it dollar’s sell off against everything else.

For the risk aversion part, it is persuasive because AUDJPY’s one day decline is something we never saw for almost a year after C of b that looks like an ending diagonal (i.e. reversal sign):

But when I look at AUDUSD, I’d rather draw different conclusion and Aussie may have some more way up towards summer. Here is the weekly chart:

As I zoom up to 360min chart, I see very complex wave structures that I barely managed to label Elliott wave that makes most sense so far.

What this wave is telling me is that we are in the woods of very complex IV wave that may dip to 0.9533; this is an support that we call IV wave floor as I showed with gray line.

So, as much as I want to short AUDJPY, I would like also to buy AUDUSD if the IV wave floor holds well. A possible strategy may be to first short AUDJPY at the rebounding rally, then buy AUDUSD at the dip?

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
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From recent 100 trades (%)
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Total returns

Since inception
(Aug 10, 2009)
Year-to-date Quarter-to-date
0% 0% 0%
This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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