Sydney Kris' Journal

[KrisL]

This is a trade that I took yesterday that I used a combination of Elliot wave theory and AIMS to take advantage of.

I identified a contracting triangle in the B position of wave 4 on EU using the M15 chart and decided to look for the breakout wave C. I took it well outside the triangle's trend lines, and my entry lined up perfectly with a break of an AIMS box and the AO close to ZL. Bill Williams insists that the Elliot Wave is the structure of the market and that the structure of the Elliot wave is the fractal. I see it unfold like this nearly every day!

Anyway, I used the length of the base of the triangle to set a target and scaled out of the majority of the position once it was reached. I let a tiny portion of the original position run as far as possible.

This trade could have been taken using just AIMS alone, but I love using Elliot wave thoery to point the way. An AIMS entry that lines up with my Elliot wave thinking makes for the most stress free trading!!

2014_01_14 eu contracting triangle.png

[Michal]

Fantastic Kris ! (wd)

[KrisL]

The Aussie did it again for me today during the Asian session, but not as perfectly as I'd like. The original entry (the one that you see still running in the picture below) was a H4 seed and I stand by it as a legitimate entry. However, the closed trade that you see below was taken on M5 based on an assessment of the H1 Elliot wave requiring a 5th of wave 3 down. Nothing wrong with that, until I was surprised by a news release only moments after I placed the trade! Luckily it went in my direction, but next time I'll be more cautious around news releases. I'm trailing M15 AIMS levels to manage the original position.

Some interesting food for thought regarding this trade and other news trades - can Elliot wave analysis point the way for price following a news release? Here is my hypotheses:

Consider a news release that comes out and is significantly different to analyst expectations. Prior to the release, the market unfolds in real time, responding naturally to the events that make up the news release before before it is officially released as news. If anything, inaccurate analyst expectations would have the effect of tempering the natural movement of price, as traders act in accordance with the consensus expectations. The news is finally released and the market very quickly adjusts to the point where price should naturally be - the point where it would be if everyone ignored analyst expectations. The news release tells a story about what has already happened, but the market can't help but give clues as to the underlying real story in real time. If a news release is contrary to analyst expectations, the market very quickly catches up.

What if you could put together a picture of probable price movement following a news release BEFORE the release actually happened?

Before this idea is dismissed as tripe, consider the Fibonacci expansion in the picture of my trade below. It corresponds to the predicted end of the H1 wave 5 of 3, and I placed it there prior to entering the trade to decide whether trying to trade wave 5 of 3 was worth the risk. The spike following the news release touched it almost to the pip. Price then continued to move in its wave-like fashion.

If there is any substance to this hypothesis, the implications are quite astounding. I'll continue to think about it, but I won't be changing my trading style too much just yet - AIMS is working beautifully!

2014_01_16 au.png

[KrisL]

A nice setup right on the Tokyo open this morning.

2014_01_20 ej.png

[immy]

A nice setup right on the Tokyo open this morning.

2014_01_20 ej.png

This is a Higher Probability setup. Just look at H1 and see the "position" of your trade, within the H1 Wave. Impulse wave within impulse wave, a true example of "Breakouts in the direction of Higher Time frame trends". nice.

[Nikita]

This one was amazing! \m/

[KrisL]

Thanks Immy and Nikita! I have been incorporating a bit of HTF analysis prior to entering trades on M15/M5, and it certainly helps identify the higher probability setups.

Some action on GJ during Asian trading this morning. The first trade was a breakout of an ending triangle, and my entry corresponded to an H1 AIMS level. For the second trade, I entered what appeared to be the end of wave C of 4 when I saw a BDC. I set TP for TZ1 of Wave 5, then took my wife out for the evening. We just returned home to find a happy ending to the trade. It should always be that stress free!

2014_01_21 gj ending triangle.png

[immy]

Thanks Immy and Nikita! I have been incorporating a bit of HTF analysis prior to entering trades on M15/M5, and it certainly helps identify the higher probability setups.

Some action on GJ during Asian trading this morning. The first trade was a breakout of an ending triangle, and my entry corresponded to an H1 AIMS level. For the second trade, I entered what appeared to be the end of wave C of 4 when I saw a BDC. I set TP for TZ1 of Wave 5, then took my wife out for the evening. We just returned home to find a happy ending to the trade. It should always be that stress free!

2014_01_21 gj ending triangle.png

Good trading mate, just a word of warning, HTF analysis, should not Last more than 1sec 2 maximum. If its more than that, you're over analysing. I know its very short time, but thats the amount time it would take you to find out if the market is trending or sideways on the higher time frame. In both conditions we can trade lower time frames but during a trending market we don't worry about AIMS levels to the left too much whereas during a chop or tight range on higher TF's we pay attention to AIMS Levels to the left on lower time frames. thats it. cheers

[KrisL]

Thanks for the advice Immy! I've gotta say, I was surprised to read what you wrote. But the more I think about it, the more I see your point. What we do is really not complicated, and we don't need to make it any more so. I definitely think that we tend to analyse for the wrong reasons - to avoid having any losses - rather than to identify the high probability setups.

The analysis that I do is geared towards finding these high probability setups, and I spend about 3-5 minutes on each pair before I do any trading whatsoever. I'll still glance back to M15 and H1 before placing a trade on M5 though. I feel like I trade better when I spend this time at the start of the day, and my results are definitely better. But I will try to reduce the amount of analysis I do and just focus on the important stuff. I'm still a beginner, so perhaps I'll get faster as I gain confidence and experience.

[KrisL]

Today's Asian session went nowhere for most of the day. I was keeping an eye on the M15 charts while working, and had some POs set and ready to go, but nothing got triggered for a long time. I tried a long on GU that I should have realised was a poor entry. Lucky to get away with a small loss.

2014_01_24 gu small loser.png