Trading Wave 5 on the 'Swissy'

I took a couple of trades a week ago - I have highlighted one of them above on the US dollar Swiss franc currency pair (USD/CHF).

I use a combination of Elliot Wave theory and momentum to determine my set-ups. Since wave 3 is the most dynamic move i use the momentum oscillator (green and red bars - greatest peak) to identify it. I then work from this reference point. I wait until a pull back for Wave 4 to the 38% and a candle pattern in this case bullish morning star.

I look at the lower time frames for further confirmation but I will leave that to another post. I wait for price to make its move and on a retracement (significant Fibonacci level) I enter on a candle pattern.

I am a little more conservative and I took 200 points at the double top - as you can see there was more on offer to the 127% wave 4 retracement.

The market is now providing potential opportunities on Wave A corrections.

People ask me what way I think the market is going - I tell them I don't care - as a short term trader I just want it to move with some conviction either way.

Forex - Patience Pays Off

Last week was a great week for my trading. A few nice Wave 5 set-ups for +600 pips total. This was on my 'small' account so not vast amount of $$ but certainly building my confidence to go hard in the second half of the year.

On my larger account where I scalp the yen crosses using a trend following trade I picked up +450 pips on $2/pip. I have now hit my second target and will up my contract size to $10/pip.

I probably left some on the table last week as the volatility of the GBP during all the uncertainty in Europe and UK government made me get out early on some trades (still in profit). These are the periods when experience should tell you to press hard and can make a traders month or year even. I am still striving to build the confidence to press hard during these times.

I digress but - It reminds me of last year when I was trading Apple (AAPL) Call options at historical lows (I was accumulating options at $80 stock value - do you recall March 09?). This was a prime opportunity with a fundamentally strong company to go hard. I lacked conviction and bailed in June with a good profit - the stock then soared through $200. That is +200% profit on stock but with an option it was more like +1,000%. These gifts are presented periodically but the trick is to recognise them (which I am starting to do) then push hard on the confirmation.

I did promise some charts - I will make some time soon to present a few of my recent Elliot Wave trades with commentary on what I was thinking at entry and exit.