Archive for the ‘Wave 3’ Category

Seeing upside on AUDUSD

I entered AUDUSD long position on July 13. Unlike my usual habit, I hadn’t posted an article of the trade planning partly because I was busy outside the trading world, and partly because I had thought it was going to be another week before my entry order triggers.

Now it’s been more than 2 weeks, and AUDUSD is in my favor both for the price action and the swap interest in this longer than usual holding.

This week, Australia’s CPI rose more than the market anticipated, and it slightly increased the expectation to RBA’s interest hike. RBA’s interest decision will be announced on August 2.

Meanwhile, US politics on debt ceiling stagnated, and the added uncertainty on dollar also seems to be positive on AUDUSD.

Here is the weekly chart of AUDUSD with my Elliott wave counts:

The primary scenario is that AUDUSD is in wave b of an expanded flat wave in the very long cycle. If this is the case, what is waiting is a sharp downward c wave that goes even lower than 2008 low. I am not really sure if this will happen (who does?)

The secondary scenario, showed with the label with parentheses, seems more attractive scenario as the long term outlook for USD only gets worse, and the fear for inflation increases.

In either scenarios in this very long term, AUDUSD is at the end of wave V, and I am focusing on much shorter span. Here is the 6 hours chart:

My average entry price is 1.0805. Currently my stop loss is set at 1.0815 (so the profit is guaranteed). I will probably book the profit at 3 or 1.1182, and think to re-enter the market at 4.

Gold: We came in early, so just follow the trend

Wave .1 is from 1308.45 to 1445.05 and $136.6 in length. And Wave .3 started from $1381.25. So now, the length of Wave .3 has reached the length of .1. Elliott wave defines Wave 3 of an impulse wave not to be shortest among Wave 1, 3, and 5. Elliott wave suggests Wave 3 to be often the longest, and it also suggests the length of Wave 3 in price often reaches 1.618 times Wave 1. If I assume all above, the target for Wave .3 is $1600 level. As the gold making record highs everyday, some people may start worrying and take profits. But more people may start jumping into gold buying thinking that $1500 is the new standard.

I do not know what will happen, but all I know is I entered the market early enough (average entry point of $1450) to lock my break even point, and just follow the trend until either reaches my target ($1600) or it gives the sigh of reversal.

EURUSD: Increased the short position. Stop loss at 1.3750

Six days since I entered the EURUSD short position, and it’s looking good so far. EURUSD clearly marked 2 at 1.3744, and went below 1, so I sold some more at 1.3495. Now my average entry is 1.3518. I moved stop loss for all position to 1.3750.

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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