Elliott wave analysis of the week - November 29, 2009

AUDUSD seems to be crawling up from Dubai shock over the Thanksgiving.

It seems to be a clear zigzag rebound which should lead to a mighty black 3 wave towards 0.8760.

I made a tweak to my trading strategy, and I will use stop sell order instead of limit; meaning that I will sell when 0.9085 breaks down.

If 0.9085 files, I will set my stop to 0.9180.

If 0.9180 breaks up before my stop selling filed, I will revise this plan, and attempt the stop selling thing at higher price.

I will plan to repeat this stop selling when 0.8890 breaks.

I know how much rebound to anticipate by Elliott wave principle, and by using stop entry orders, I will try to buy more probability of winning.

This also forces me to have more adequate time before pulling the trigger. More careful planning, and smooth execution.

$AUDUSD This is one possibility.

I am not taking any position as market continues to be choppy. EURUSD
is very messy these days, and if dollar strength comes into play, I
would prefer shorting AUDUSD as the wave seems to be pretty
I need confirmation with weak oil and preferably gold weakness,
together with the dollar strength before entering short…

Elliott wave analysis of the week – November 21, 2009


Above is a zoom up of my previous Elliott wave labeled chart. I entered short position averaging 1.49675. I split the position into two units. First one unit was for shorter term trade, and  got stopped out with 59 pips profit. I have been holding on to the second unit, and my ideal take profit level is 1.4650. I believe EURUSD is in purple .iii wave, but so far it’s not very explosive wave downwards, and this made me a bit cautious. So, I set my stop at 1.4890 that would violate the rule to make a wave impulsive: black iv would enter into the territory of the wave black i.

I am keeping my bearish bets, but I am also seeing 40% possibility that EURUSD will continue to go up towards the end of the year. (By the way, I found it interesting to read FT Alphaville’s entry about Goldman Sach expecting equity rally in December, especially in Europe.

Here is my EURUSD bullish scenario:


Now that 1.4805 was broken down by a bit, I would expect the current blue underline 4 wave would pull down to 1.4624 before the beginning of the final EURUSD rally of blue underline 5. This is very convenient for my EURUSD position: I could profit in either scenario by shorting EURUSD towards 1.4650 level.  1.4479 is the last support before this count would become invalid when it crosses the red line (1.4450).

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 (%)
About this graph

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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