Nov 26,2010

A few observations and lessons learned from the past few months starting Sept 2010.

• Everyone made their predictions on the USD and in particular how far the move up the Euro would be.
• Whether they were fundamental traders, technical traders or whatever experts. Many had it wrong, very few were able to even be close to the top of the move or even when the swing downward would be.
• The Elliotticians, at least a few, had nailed the top within a few pips. It was very impressive and made me realize that though it does have its flaws sometimes. There really aren't many methods out there that are in tune with the trend, and can predict directional movement in the same way. Prechter and EWI were off their forecasts by quite a bit,but were correct in their direction of the trend. ie. They saw the move up from the lows of 1.1876 Euro to the 1.4282 highs in early November as just a correction, not a new impulsive trend. Everyone else believed that the Euro was in a new Bull Trend, Prechter and really the Elliotticians went against this thinking and saw it corrective. They were spot on ignoring news and fundamentals and reading the real trend correctly.
• So despite the big loses the past few months. I've learned some expensive lessons, and a new respect for the Wave principle. It's been a savior and putting the work and faith in it could really pay off in the long run.
• From a severe drawdown the beginning of Nov, I'm glad to say we're up over 65% this month, with potentially higher gains in the near term.
  
• From here we'll just keep working harder on EW models, and try not to let Bias get us in trouble again.

And just for fun: Intrade predicts(as of this posting Nov 26,2010) that the Euro has a 60% chance of closing below 1.300 on the last day of the year 12/31/2010 conversely,there's a 40% chance that the Euro will close above 1.300, lets see how the intrade punters do. I like their bet though because I'm with the 60%.