09/08/14 – Some changes to the trading indicators have occurred during last week for this potential trade. Since the Buy order was placed for this potential Long trade on SLB, the Wave 4 pull back has formed a new Wave 4 extreme low. Normally this wouldn’t be a major issue but, in this case one of the crucial trading indicators for my “With Trend” trading strategy has been broken. The Elliott Oscillator has broken the 140% line taken from the high on the Oscillator on Wave 3. You will also notice on the stochastic study on the chart below, that the stochastic has now crossed over three times in the over sold zone, indicating false starts to a potential Wave 5 movement. This has, without a doubt, contributed to the failure of the Elliott Oscillator trading indicator failure. See Charts below
The probability for this potential trade to achieve its Wave 5 targets t this time is low and therefore I have decided to cancel the Buy order. You can’t enter every trade who’s initial trading indicators look good, sometime you just need to walk away.
05/08/14 – With 7/9 of my trading indicators in the green for this potential trade, the setup is looking good. The Wave 4 pull back extreme occurred around the Fibonacci 0.382 line taken between Waves 2 and 3. This one of the strong trading indicators, as 80% of strong wave 5 movements come after the Wave 4 has pulled back between the Fib 0.25 and 0.382 lines. I have chosen quite an aggressive entry into this trade s the trading indicators are looking so strong. Stop Buy Order @ 111.62, which is out of the Trend Channel for today’s bar position (blue vertical line) and also above the Fib 0.25 line. The Stop Loss is below the Wave 4 extreme and placed at 106.54 The initial take profit limit order is at 122.50 which give a risk to reward ratio around 1:2. See charts below.