Thursday, 28 April 2011

How to stop exiting too early - How about "EXIT SETUP"

I have noticed many people struggle with identifying correct setup.
Once that is done the next problem comes staying in the trade until "Exit Setup" is created.
Lets now create a new mindset. Lets give it names.

Its time we make  firm decisions and promise to stick to it.

To trade we look for what we call
Entry Setup.

To ensure our setup is there we would look for the following rules, while "staying in the now". This is the mental condition bit. Stay in the NOW. How do we stay in the now? simple, look at Current AO Bar, Current Gator Lines, Current AIMS levels. We can also have an overview of entire picture but most important is current ones.

Lets Look at our Rules, that "create" our setup.

Three Trading Rules to make it simple

Rule 1 - Is the Alligator Sleeping?

Rule 2. Is AO Close to Zero Line? Preferably flat at Zero Line.

Rule 3. Is AIMS Level Close to Red Line?
(Rule 3 Modified 28/04/11)

AO: Take Trades off the bars near ZL.
Alligator: Take Trades while lines are intertwined and flat i.e.  sleeping , atleast snoozing LOL.
AIMS:  Take trades ONLY on break of AIMS Level i.e. 1pip + spread above when going long, and 1pip below when going short, and prefer to take trades when AIMS levels up and down are not too far from each other.

Rule 3 comes after Rule 1 and 2 are met already. By following Rule 1 and 2 we create the correct setup, whereas following Rule 3 would ensure we make entries close to exit point, ie. red line.

As a rule we can say, is entry close to Red Line?. e.g. entry should not be e.g +15 on m1 and +25 on m5, away from escape route, ie. the red line or the opposite AIMS level, which ever you decide to take as exit point.
Note: 15 or 25 pips distance is for demonstration purposes only. Although it applies to EU during LO and NY session, since each pair has different wave length and behaves differently during different  periods of the day, of the week, of the month, of the season etc. brings different volatility and character.

Following the above would ensure we focus more on "Taking Profits" and less on "bailing out", "Taking Heat", "Paying Rent", "Losing", "Giving it Back". We need to take such words/statements out of our vocabulary. To remedy the "Negative" words/statements I suggest we use. 


After we identify and take the Entry Setup we search/wait for Exit Setup.

Rule 1.  Has Candle Closed on Red Line? (Or green line if that's what you decide to use, its entirely up to you, but I'd suggest stick to Red Line to start with)
Rule 2. Has AO Changed colour? if yes has it Diverged as well? I yes to both Exit at will, or tighten SL by either following candles or following AIMS either on current or lower TF. This would ensure we take maximum pips out of a move.

Note: Exit Setup just came to my mind and instead of losing this thought I've recorded it here. Expect some fine tuning later.

Wednesday, 27 April 2011

The Sniper

All day spent watching EU not putting a single trade. I just was not sure. I did not feel like it to put a trade. While I hit a nice H4 EJ Trade starting 120.10, I also managed an m5 setup. Later, quite late, I saw price broke out of a sleeping alligator. It was news time. I put a pending and let our AIMS Trading Manager do its thing.

The moooovie sniper is about a marine sniper killing "its" own men. While I do not support his mission what he did was something that resembles our, dare I say job, our GAME. We are snipers more like spiders. We sit at a comfortable spot and watch. But this waiting and watching is no easy job unless and until you fall in love with it. You cannot enjoy without loving it and you cannot love it without enjoying it. You gotta play it.

When you enjoy the surroundings, every sound, vibration is sensed, every thought is bounced back to its origin, blocked or rejected. Every move is calculated, limited and controlled. And as soon as the opportunity present itself, a sniper DOES NOT hesitate. For this moment contains the energy of the entire waiting period. You pull the trigger, after that if you're a hunter you let the DOGS do their work. We have developed such dog. AIMS trade manager.

Picture of this hunt!

Setup 2 Example. 
Note that the Entry was taken after a properly opened up Alligator mouth. When the alligator's mouth is open to above we are in some sort of Impulse wave and we trade aggressively until the mouth starts closing again and AO starts peaking and diverges. 

Tuesday, 26 April 2011

The Amigo

While I'm busy trading the markets here is my Uncle playing with "the Amigo". One of only few people in the world. Click on the link below to watch the video.
Dr. Ejaz Khan. an Electrophysiologist at Winchester Medical Center and lead doctor on the clinical trial.

EU Strategy


Firstly I hope everyone had a fare share of fun during this lovely weekend that is gone.
I knew nothing, before YOUR desire for knowing more was created. It is YOU who wanted and hence it manifested in my mind delivered through this video. So I thank you for wanting to know so now I know as well thanks to you.

I turned a long weekend a bit longer by deciding not to trade today as well despite the fact that I love Tuesdays. But I had an hr spare so I utilised it towards NY Open.

Following is an example of collecting quick pips in little time. I say this because trading the shorter time frame is exactly like trading any other time frame the only difference is you live life in a "Fast Track". compared to a D1 chart within one hour you've done 2 months of trading. I leave the rest to your imagination.
What I mean is not that you can do it when ever YOU want to do it, but if you just trade 2 hrs a day, that is London Open and New York Open / or Asian open any combination, you'd be able to collect 10 pips per session at least. and with experience I can guarantee you that you would make much much more such as 90 pip trades etc.

Also = Answers to your questions emailed to me.
Raj: Your question was how did I time my exit so perfectly. and that I mention M1 in some of my post. Its our EUR/USD Strategy. We used two charts to time our entries and exits. It could be Lord of Chaos' Mercy for my timing that day, LOL with a little bit of wave counting. Click here please.

Since I was not trading this day but had an hour to spare I sat at NY open and saw a possible 3rd wave to the left, ie. London Session, I targeted getting into the 5th wave of M5 using First bar of AO setup on M5 and timing it with 1-2 situation on M1. I did MM, (money management) and Trade Management on M1. (Consecutive candles trail. ) The result 1:1. not bad. You can see the advantage of 2 fractal trail on the m1 chart.

I hope you enjoy the rest of the day.

Edited: 14.44

While answering questions and updating blog (yes i have this bad habit of updating my journal and blog during trading hours) I saw a perfect saddle point. M1 trade.

Thursday, 21 April 2011

We had a discussion (A Webinar type of thing!!!)

Last night we had a talk about how to trade our system. We briefly went over the following
1. The system - What is Alligator, AO and AIMS
2. The setup  - What is the saddle point -
3. How we count Elliott wave
4. Exits
5. How to avoid Whipsaws

I thought I'll share with everyone. Here is the link to that session I hope you can see it. Personally I think it was a good reminder for myself. When I talk about the setup it triggers thoughts that forms my belief system. I feel very refreshed this morning. I hope it helps you understand the "underlying" structure of the market.
Note: Its not a you tube type video. When you click on the link it would download some stuff and a proper full screen webinar will begin exactly as we saw it on our screens. I must say the quality is really good.

If you could please send your comments to I'd really appreciate that.

btw: a Beautiful 5th wave has begun on USD/CFH. We took off the break of AIMS on H4 Chars

Tuesday, 19 April 2011

Count Elliott Wave within 10 Seconds

After Reading this material you should be able to do the following:
  • Objective 1. Understand Elliott Wave
  • Objective 2. Count Elliott Wave within 10 Sec
  • Objective 3. Learn how to use AO

Objective 1

What is Elliott Wave? 

We believe the market has a structure. That structure is Elliott Wave.
We also believe that the structure also has a structure and that structure is shown to us on our charts by using our indicator AIMS Levels.
EW consists of impulse waves and corrective waves. We are interested in trading the impulse waves and avoid the corrective waves.

Which wave is most profitable and easy to trade?   

Wave 3 is where we make money. Our strategy puts us right into the impulse waves, where the money is made.

Hypothetically, this is how Elliott Wave looks like.

Within each Impulse wave there are 5 waves.  of which wave 1,3,5,  are again impulse waves whereas wave 2 and 4 are corrective waves.

An impulse wave consists of sequence of 5 waves starting from 1 up 2 down 3 up and 4 down and 5 up again. This is then followed by smaller waves a,b and c. This is then followed by a new 1-2 and 3 and 4 followed by 5. and goes on....

This is where AIMS/Fractals come in and this is where the concept of Fractal Geometry enters the scene.

Fractal geometry simple means that we live in a universe where things have a certain specific structure and the parts have the same structure as the whole. It keeps repeating itself e.g. Waves within waves within waves.

Please watch this video.

Just like the Mandelbrot Set above, the Fractal Geometry of Elliott Waves works in the same manner.

If you strart off a monthly chart and work your wave down to one minute chart you will see that the Elliott Wave sequence repeats itself over and over.

Moreover, we have limited time frames available on mt4 otherwise we could be much more clear about waves. We need a platform that zooms in and out using seconds or minutes rather than set time frames. I wish one day I might get one like that.

Remember: We do not trade Elliott Wave, we use it as a confidence measure. As an ungrounded assessment that works in conjunction with our Grounded Assessments. 
To understand Elliott Wave further please visit

How to make money using this information?
 We can make money by trading Wave 3 and 5

How to make avoid losing money using this information?
We avoid losing money by Not Trading Wave 4 and 2.

The following charts and text  shows how to count the waves using AO within 10 seconds.

Remember we do not trade Elliott Wave, its an Ungrounded assessment, its an opinion its there to give us confidence. Instead we take trades based on our system generated Entry and Exit Signals. We use EW for confidence and fun.

What are Grounded Assessments?

Indicator 1. AIMS AO
Indicator 2. Alligator
Indicator 3. AIMS Levels

To make our job easier we have 2 simple Entry Setups with clear and easy rules. So entries and exit according to rules only.

To make our job even easier we have a talking alert with Human Voice Interface. Click Here

Objective 2 and 3

How to use AIMS AO to count waves within 10 Seconds?


Each trend begin with wave 1 and 2. They are quite small as compared to its 3rd wave. infact in a sequence of 5 waves 1-2 could be the smallest. But dont bet on it, chaos is unpredictable yet stable and highly organised.

In my experience 8 out 10 time we find the best 1-2 waves when AO is close to ZL. Setup 1 is the answer.

1-2 also occurs sometimes at the peak of AO but that is reversal technique an its not discussed here so far. But we do it in a different fashion. Which I shall discuss some other day.
Then comes the third wave, this is the biggest prettiest wave. We want to be in it when it happens. The way to be in it is to watch the market when 1-2 occurs. The way to catch 1-2 is to catch AO when its at Zero Line.
3 is the strongest move after which comes the ugliest wave 4. We dont want to be in this and we use AO to help us here again. Then comes the 5th wave. Its usually is relatively smaller in length then its respective 3rd wave. There is a way to find out in advance where the 5th might end. I'll discuss later. Getting into 5th wave could be tricky. Hence we use lower M1 to enter 5th wave of M5. We simply look for a setup to occur on m1 in the direction of m5. more on this later... but first EW!!!

Wave 1-2 usually Occur around and near Zero Line

How to make money using this information?

The answer is follow Setup 1. for Details of Setup 1 How to Trade AIMS

When Alligator is asleep and AO is close to Zero Line, i.e. Setup 1 as per our rules, we increase our chances to hit the 3rd wave.

Wave 3 - Peak of AO Identifies 3rd Wave

How to make money using this information?

We know that when AO peaks we might be seeing the end of Wave 3. Now Wave 3 is our primary objective and if we have successfully take Setup one, into the third wave, AO would now help us time exiting with profit.

How to use AO? 
AO is momentum indicator and hence if it peaks properly and starts to show signs of weakness of momentum we start thinking about bring our Stop Loss closer and perhaps might consider exiting on close on green line and/or break of AIMS Level in the opposite direction of our trade, which ever is closer.

Please go to How to Trade AIMS to understand how to read AO. 

Wave 4 - After 3rd wave i.e.  peak of AO is identified, AO crosses ZL and changes colour, that is minimum requirement of 4th wave.

How to avoid losing money using this information?

If we traded the third wave and now are out of the market, we would happily wait and do not trade until AO cross ZL in the opposite direction or at least travel back closer to its ZL.

Three things might happen while AO starts its journey back to ZL.

a. Price goes up and down in a crazy fashion and may confuse bars on AO but still remain range bound but rather taller AIMS are created. In this case AO takes a bit longer to get to ZL.

b. price remains range bound within tight aims level and goes sideways, AO goes back to ZL easily and we are read to trade again, of course without doubt if the rules are there.

c. Price might reverse in this case quikly forming a 1-2 formation at the top/peak of AO and starts reversing. in this case by the time we get to the first bar of AO situation, that is crossing of ZL we are too late to make entries. Checking the 3 rules will help greatly here. Hene we do not trade the crossing of AO in the opposite direction of a peak of AO. That is because 1. It could be the 4th wave, (crossing of ZL of AO being minimum requirement for assuming we are in wave 4) and 2. by the time AO crosses ZL the reversal had already begun at the peak of AO and we are too late. We wait for next setup.

So what we need to do is to use AO in this fashion in order to avoid Wave 4 and its profit destroying whipsaws. Though I beat the drum about this I find myself quite often giving back my profit during this wave. As soon as I'm "conciously aware of it" I stop and calm myself down. Take some deep breaths. :)

If we could avoid wave 4's successfully we shall never lose money even if we are not making alot of money. I can almost guarantee that. In fact the defining point between a money making trader and otherwise is this. The ability to avoid wave 4s. And its simple. Dont trade after peak of AO. Wait for it to come back to ZL. Check the Rules. Don't trading without checking rules.

Please read this page for How to avoid the chops/Wave 4 and Strategy in a Nutshell  

Wave 5. After 4th wave AO crosses ZL again in the direction of the previous peak of AO which signified a possible 3rd wave and peaks again but this time it Diverges.  This divergence is our clue that we might be in wave 5.

What is Divergence? Click Here    Again Babypips does a fine job here. I love this site.

How to make more money again using this information?

Getting into a Wave 5 could be tricky. This is because it comes out of a Wave 4. The assassin wave for all the traders in the world. LOL!

As discussed above if price moves in a relatively calm manner, does not create very tall AIMS Levels and gives us either of the 2 setups, we take trade in the direction of the previous third wave in case of setup 2 or bracket the market in case of setup 1.

Note that even if we think wave 3 has occcured we would still take setup against wave 3 if the rules on the setup apply. This means,

We Do-Not trade Elliott wave

We trade our Entry Setup 1 and 2. But it does serve as a pathway that keeps us motivated and brings some fun. It gives us confidence to take a trade an certainly, anything, any tool that would help confidence is honesty welcome.

The experience of unfolding of ones predictions and the count as we expected is a tasty pie to have!

Here is a little trick on how to get into wave 5 easily. 

Once you have found peak of AO on m5 chart. and would like to make entry into 5th wave (ungrounded assessment) we would use m1 chart.

Use m1 chart to count a,b,c.  After a Green Peak of AO on M5 ,

you'll see an A down then B up followed by C down. During this period AO on M5 will either turn red or come close to ZL. Now wait for setup to appear on M1 or M5. Which ever comes first take it.

We can also find out where would Wave 5 end. This is a handy tool.

Find Target Zone of Wave 5? 

8 out of 10 times Wave 5, ends between Fib Expansion 62 and 100. We call this the Target Zone 1 and Target Zone 2.

Fibonacci Expansion Tool

This is standard MT4 study that comes free of cost. 

We plot between FE 62 and 100. We can start looking for exit signals when price enters this zone.
One can also set Target Point at either 62 or 100 or somewhere in between.


Following is an example of Counting Elliott Wave within 10 Seconds and the 5th wave Target Zones, followed by more examples from live charts.

Example 1.

Example 2. GU M5 Chart

Note that the 4th wave went quite deep and was even tradable. AO peaked nicly on the other side yet when it reversed we found a fifth wave divergence (green) and completed the wave sequence.

Example 3.

Note that Wave started off a peak of AO on the other side, hence difficult to catch on current time frame.

Note that Alligator turned around quickly and 1-2 were formed after cross of AO, also note that AO diverges before it crosses ZL that shows the 5th of the 3rd wave and then it goes to ZL briefly crosses ZL and comes back up and creates a new peak but the peak is lower than the previous peak

Example 5 - In the following chart you'd be able to pick 3  4 and 5 within 10 seconds. give it a shot!!!

The blog is full of examples on how to count waves within 10 seconds. Have Fun!

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