Shallow RR | $GBP $JPY

FX:GBPJPY   British Pound / Japanese Yen
405 8

Parameters as defined in chart ... Pending long entry.

Low risk, high RR.

Probability: Medium.

David Alcindor

(not shared in Twitter or other social media)
03 DEC 2014 - Update:

From Twitter:
$GBPJPY nears 188.777 target; Approximates WW's Point-5:

via @tradingview | $GBP $JPY $USD #BOE #BOJ #forex

David Alcindor
+3 Reply
27 NOV 2014 - Update:

For the Wolfivores out there, here is the geometric rational - Pattern remains very much in force; target may need refinement. I will keep this thread going unless price turns against underlying pattern:

David Alcindor
+1 Reply
4xForecaster 4xForecaster
Traders seeking early involvement in Wolfe Waves pattern, if anything, this example provides a lesson on how this pattern behaves. While the 1-3 Line remains fixed from the beginning of the pattern inception, expect the 2-4 Line to shift until a certain point.

This "certain" point has to be defined based on internal structures. What I recommend traders to use is the Point-3, as it defines a level of entry that is high enough from points 2 and 4, and in this manner adds credence to the probability that the 2-4 Line is done shifting.

What I was wrong to do here was to assume that price had done moving against me and would turn up towards Point-3. As demonstrated, there is never a good way to time the market without any structural reference.

A more conservative SL remains very much reliable here, which would be to place it right at Point-4. There is little reason to place it below Point-4, simply because the lower edge of the geometry will provide the geometric support as price moves to the right of the price field. Such a tight SL would also guarantee a lowered risk against a large reward.

If price were to fall below the current Point-4, then I would use a symmetrical ab=cd pattern to define a lower support, thus maintaining the same low risk as above.

Note that all this would only pertain to the very aggressive trader seeking entry at the current level. In contrast, the conservative trader might seek entry at the NEXT candle following an actual crossing and closing ABOVE the level defined by Point-3, namely: $186.113.

David Alcindor
+1 Reply
4xForecaster 4xForecaster
27 NOV 2014 - Update / Tech-Note:

At this point, and as indicated above, we have to consider Point-4 as undefined 9hence, now ghosted in the chart). This has important implications in the entire construction of the chart, since Point-4 determines the slope of the 2-4 Line which is subsequently used to define a potential Point-5-prime and rarely Point-5-second.

There are many ways to speculate on the possible level at which Point-4 could be expressed, and in this regard, I have added in YELLOW a reversed pattern (reversed to the standard symmetrical ab=cd pattern), which is known as a "One2One" pattern - See it in the chart as the yellow feature.

I have also added two predictive/forecasting model-based targets, namely:

1 - TG-Hi = 188.777 - 27 NOV 2014


2 - TG-x = 189.962 - 27 NOV 2014

Note that 184.509 (GREEN) is a structure-low coming near alignment with this One2one pattern. Hence, it offers an approximated entry level. In contrast, 183.958 (RED) represents the next structural level defining a conservative stop-loss. If price were to cross and close below this level, it should prompt the trader to abandon the entire geometry and remain on the sideline.

Of late, there is only ONE major bank having taken a LONG position with very different parameters in terms of target - Prepare for this bank to re-adjust its trade n a way that might comes nearer to above targets. Still, there is institutional support in this long directional bias, and it could be that more banks will join in.


Here is a great lesson on a live trade, in which I have demonstrated a very aggressive entry that failed. The take-home message here is that, despite a great rationale based on geometry, the market will always have the upper hand. However, this means that tight, vigilant money management is key here and in any aggressive trade op - The higher the risk, the tighter the stop-loss should remain.

More on this as relevant structures get defined.

David Alcindor
+2 Reply
MannyV 4xForecaster
well this worked... wider margins maybe with lower size would have worked. g j sir,
+1 Reply
Thank you @ManuelValbuena for the heads-up - David
Well, that was short-lived. Market turned with widened spread into the shallow SL.
+1 Reply
4xForecaster 4xForecaster
EAGLE strat was the application here. Still a good long consideration after the shallow retracement taking place right now completes.

+1 Reply
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