[thalestrader]

Originally Posted by thalestrader »

EURJPY has sprinted (after wandering around the starting line for a long time) to 132.50 .... we watch and wait. We would trade our defined opportunities as they present themselves, while keeping an awareness of where price is in the big scheme of its recent range (125.xx - 139.00).

Sometimes this is even easier than it is. EURJPY has declined to first target.

[thalestrader]

Originally Posted by thalestrader »

I posted this ending diagonal on the EURUSD some days ago. The initial rally out of that pattern has reached a point where it could be ready for a rest, if not an outright reversal.

And here again, this is sometimes easier than it already is.

Best Wishes,

Thales

[forrestang]

As mentioned, it's always an option to attempt to target the next level of S/R for anticipated areas of extension.

But if you wanted to be able to more so mechanize your targets for trading to simplify things, at least at the onset of a path to consistency, does the following example makes sense?

The targets are essentially based on the swings price made on its way to your entry, shown by the black lines. This is just an ES example from earlier this morning.

The red double arrow is the thrust or sharp move up.

The orange double arrow is the depth of the swing into the swing.

The blue double arrow is that last move to produce the LH that got you into the trade and also a logical stop.

I have project each arrow downwards past the BO point.

Are any of these targets more sensible than others in an attempt to mechanize where you'd target your extension to move?

[forrestang]

Originally Posted by thalestrader »

Sometimes this is even easier than it is. EURJPY has declined to first target.

You obviously have a crystal ball you are not telling us about.

[thalestrader]

Originally Posted by Cory2679 »

Questions:



Does this mean that whether you have an intial risk of 15 ticks or 50 ticks, the initial $$ risk is the same?



Did you have any type of formula for this? For example, for every 20% return on the account (compounding), reduce risk as a % of account equity by 0.5%.

I'm just trying to get straight what I want to do beginning next week.

Thanks,

Cory

First, nice trading!

Second, yes, a proper position sizing approach would mean that whether the initial risk is 15 pips or 50 pips, the $$ amount at risk is the same. For example, if you are trading a 5K account with a 2% risk and you are looking at a trade with a 15 pip intial risk, you could trade 66k on that trade (5000 * 25 = 100/15 = 6.66/pip risk). For another opportunity with a 50 pip risk, you would reduce your position size to 20K (I'll let you do the math).

Third, no, we have no formula, and there were a few days where we used super crazy rodeo clown leverage, but those were days like today, i.e. where everything lines up for a 80/20 trade to the short side. We didn't trade today (and she is not at al happy that I have not allowed her a live trade while she is off from school for Christmas break), but if we had been trading, I'd have let her essentially go "all in" on the EURJPY short.

Great job! Keep up the hard work.

Best Wishes,

Thales

[thalestrader]

Originally Posted by DaKine »

Thales, is there anything that would have had you off the sim trades I made. The first trade I can see why that may have not been the best as I am shorting right into previous R now S. The SAR on the breakout of the H would you have been off that because of the overextended nature of the move and as you said maybe ready for a rest?

I was thinking the first short would retrace more...

How about the 1.4420 short is that something you would have taken?

Thanks...

I would not have taken the short where you did, as price had rallied in three waves with most of it during that extended third leg. I know Elliot Wave gets a lto of bad press, and I try to keep it to a minimum here as I know there are many who would discount this whole approach based on the introduction of Elliot. But, when you get a large move in either direction with obvious momentum behind it, do not fade that move. Wait for a chopy pullback and then a push to a new high that stalls and presents a clear 123 going the other way.

I absolutely would have taken that short at 1.4420-1. If you look at my earlier post about the progress the EU had made since its rally out of the ending diagonal, I had said the rally has reached a point for at least a pause, if not a reversal. The reason I thought that is because the whole rally out of the ending diagonal's low can be counted as five waves, and thus it was high odds (e.g. 80-20) in favor of the short side.

I do not use Elliot to predict, but I do use it to identify short term probabilities. The way I trade is I basically am trying to catch, in Elliot terms, a wave 3 or C for my first PT, and a wave 5 for my second PT. Some moves are just three waves, so in those cases, I do not hit my PT2.

I posted a basic EW booklet in the thread a while back (I reattached here). It really can help you so long as you do not get sold on the "predictive" powers of wave proponents. Concentrate on the difference between impulsive moves and corrective moves, and the patterns that accompany them. I use EW for pattern recognition, and not for predicting.

Best Wishes,

Thales

[thalestrader]

Originally Posted by forrestang »

You obviously have a crystal ball you are not telling us about.

Funny Forrest, and I also am keeping my special magical indicators under wraps as well!

Seriously though, I have held nothing back in this thread. I have shared the books I have found useful, essays I have found useful, patterns, concepts, you name it. There is no private chat going on, no private trading room where we are working on further revisions and editions of the method. This is how I do it. It worked last year. It works this year. It will work next year, no matter how many folks employ this approach. In fact, the more folks who use it, the better this approach should get.

You need nothing more than to open your eyes and you can do it too.

I have a house full of family today, and my wife just came into tell my daughter and I to pull away from out charts and join the rest. I'll try to pop in later, but don't be surprised if I am MIA for the rest of the day.

Best Wishes,

Thales

[forrestang]

Originally Posted by thalestrader »

Seriously though, I have held nothing back in this thread. I have shared the books I have found useful, essays I have found useful, patterns, concepts, you name it. There is no private chat going on, no private trading room where we are working on further revisions and editions of the method. This is how I do it. It worked last year. It works this year. It will work next year, no matter how many folks employ this approach. In fact, the more folks who use it, the better this approach should get.

I was just messing around of course...... what are your thoughts on the above picture in looking for targets?