I have taken it upon myself to create a strategy that is profitable and can consistently win prizes in the Dukascopy strategy contest, I know this is a big ask but I am willing to settle for a strategy that does well eight months out of the twelve months in a year. That would give me a winning percentage of approximately 67%.
For as long as I can remember, my biggest losing trades have been when I traded against the prevailing trend. These experiences have formed and hardened my trading ideology, which is to always trade in the direction of the market, and above all never to try and predict market tops or bottoms.
I have also looked for ways to sharp my trading edge; trading in the trend direction is not always good enough, one has to look for the best entry points to maximize the profits that can be gotten from a trend. This lead me to the Elliot wave theory and its numerous wave counts; there is a picture below that summarizes the wave counts.
My interest was kindled by the length of the various waves; waves 3 and waves 5 in particular. The theory was simple, after a trend begins, there is usually some kind of pull-back or correction before the trend continues on its way. The i…