thalestrader

Hi Folks, Current look at the EURUSD, and futures traders can translate the same opportunity to the 6E. Best Wishes, Thales

I find EW, practiced according to the guidelines found in Frost and Prechter, to be much less "open to interpretation," i.e. much less subjective than most folks seem to think it is. Like everything in trading, this is likely because so many seem to think they know something before they know it, or else the practioners are expecting more from the patterns than one should hope to receive in terms of "prediction" or certainty. It is not magical, but it is useful, up to a point. Did your guru not cover this? Shocking! I think you could look at my charts and trades and figure this out fairly easily. As I have said many times, I use S/R for my targets and then refine my orders using fibs. The one thing fib's have going for them is that they will keep your analysis of various swings in proportion to one another. Best Wishes, Thales

AIXG Still a peper trade, but long at a theoretical 32.86, stop loss 31.25 Best Wishes, Thales

As Marko warns in his post above, when using EW, you need to be careful not to mix degree. You were not plain wrong. You were very good. But you did mix degrees, which is going to cause problems. What you label as waves 1 & 2 are fine. What you label as waves 3 & 5 were one degree lower, i.e. your wave 3 was wave 3 of Wave 3 and your wave 5 was wave 5 of Wave 3. The first advance off of your 2 low was wave 1 of Wave 3 and the small pullback was wave 2 of Wave 3. So you shorted before the Wave 5 advance. Does that make sense? Best Wishes, Thales

Yes, indeed, I am as unoriginal as they come. None of what I use has been my own discovery. I do think in this case, however, Forrest, you are mixing "metaphor" so to speak. The "thre pushes" and a "wedge" are not in and of themselves EW structures. The are what an analytic philosopher (the horror) would term "epiphenomena." They are there, but they are not the thing itself. I was intending to label a 5 wave impulsive rally, which was followed by a five wave impulsive decline. The three pushes, when it does occur, is typically the subdivisions of the fifth wave. Best Wishes, Thales

I agree completely with your "b24x" rule. If I have anything that "filters" trades, I guess that would be it. It is really a subsumed by the impulse versus corrective distinction I have been making. Whenever I have a loss, it is usually because I made a mistake in making this determination. Best Wishes, Thales

I tried and failed many times to read Neely. And anything that is more useful after the fact is not something I find particularly useful. Here is how I do use EW as PA unfolds. Again, I am not predicting a rally, but odds of a favorable long have definitely increased with the last push down. Of course, anything is possible, including a third push down to complete an ending diagonal, or a collapse to lower targets. The point is that I try to enter when the odds are at least 50/50 in my favor. Best Wishes, Thales

I know you were just kidding. I really have to run, because my wife is not kidding, but in the mean time, take a look at the levels you posted and see how they line up with various fib expansions/retracements and see what comes up. Best Wishes, Thales

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

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 Elliot Wave Basics Booklet.pdf

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

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

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

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. The ending diagonal on all time frames can be a very easy pattern to trade. It presents itself well ahead of the time at which you would take a position, and it typically offers a decent risk/reward. Best Wishes, Thales

EURJPY has sprinted (after wandering around the starting line for a long time) to 132.50. Now, we wait and see. Higher targets are easily seen and for this pair, easily within reach. A decline to 130.00 - 131.00 would not be surprising. And, this rally may be terminal, so a decline to new lows could be at hand. But, a rally to new recovery highs can also not be ruled out. In other words, 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). Best Wishes, Thales

That trade has been over for almost 9 hours. What the EU has done since is not relevant to that trade. Best Wishes, Thales

1) You do not need to make money everyday 2) You do not need to trade everyday 3) a. if you are serious, your goal is to make trades in accordance with your defined entry and trade management guidelines, not to make trades for the sake of making trades. b. if you are serious, then your goal is also to avoid trades that do not fit your defined entry guidelines. c. if your are serious, and you seek to trade only when your defined opportunities present themselves, then the profits will take care of themselves. 4) If you have a specific $$/day goal, you are not ready for this. Your goal is to trade well and protect you capital. Not to make $500/day. Trade with discipline, and the profits will take care of themselves. I have a friend who starts every month with just 8K in his trading account. Most months, he will finish with about 24K +/- in his account. He does not make $800/day. He makes $50 one day, loses $600 the next day, and makes $2300 the third day. Over the course of a month, he does average $800/day. But he does not have that as a goal. His only goal is to trade the TF according to his defined plan. So long as he does that, he has no need to worry about how much he made or lost on any particular day or even any week. 5) If you are getting outside pressure (e.g. family, girl friend, wife, in-laws, etc.) who are dubious of your chosen vocation and demand constantly to know "how you are doing," stop them right now. If you feel, for some reason, you owe them progress reports, then it should be no more frequent than monthly, and quarterly would be better. There is enough pressure without having to recount the blow by blow every day to anyone other than yourself. 6) You should be ruthless with yourself as far as doing your own daily assessment of how you did. Do not beat yourself up for not making a specific $$ profit. But do beat yourself up for forcing trades because you felt you need to make a specific $$ profit for the day. Best Wishes, Thales

Only you can answer that question. Some wold not be at all happy with many break even stops on trades that ultimately went to target. Others are happy to be stopped at break even often, for the chance to partici[ate in those opportunities that reward large and reward quickly. You have to find what fits your desires. You might want to re-read the Rod Roth essays from one of the weekend reading installments from a month or so ago. He expains what I am trying to say far better than I. I thought the EU short was a reasonable trade, and my own result had I traded it would have been the same as yours - breakeven, though the market ultimately did move to PT1. The EJ trade would not have been for me. I still see price as consolidating at the highs, and I would not be looking for a short until either price made a decisive new impulse high ("thrust" in the terminology of John Hill) with a clear 123 reversal, or price breaking down through the most recent base and into the territory of the penultimate base folr a "1" low, followed by a rally into a "2" lower high, with a break of the "1". I might, under normal market conditions, be tempted to short a break of the NY session's low, but these are not normal liquidity conditions, so I am more than happy to just watch. Best Wishes, Thales

AIXG AIXG stumbled today and would have stopped me out at the opening tick. I still like this chart, and if AIXG recovers, I'd buy in with a 32.80 buy stop. Again, this is a paper trade. Best Wishes, Thales

I was out after my last post, but I think that this stop and reverse to long should have been pretty easy to pick up on. Best Wishes, Thales

I can only imagine you are looking to sell us something given that you have posted this to every other trading forum this afternoon, e.g. ET, T2W. So, why not cut to the chase, hit us with the spam, tell us where we can sign up, and move on? Thales

ES making a little move ...

Current look at the ES. Best Wishes, Thales

And just like that, long entry orders would be cancelled, and we would be be back to waiting for the next opportunity. Best Wishes, Thales

On another day, in another year, this may have been a long opportunity if price makes a HH before making a new low. Best Wishes, Thales