The best way to learn this system is to demo it live with me every night starting at 1am EST/6am GMT.
Please go to: http://intradaywave.freehostia.com/ for the chat room for live trade postings.
Trades and stop loss updates are posted live as I take them in the chat room.
Chart setup:
Open the 4hr, 30min, and 5min of whichever pair you would like to trade.
Up Trend: Producing Higher Highs, and Higher Lows.
Down Trend: Producing Lower Lows and Lowers Highs.
Step 1: Identify the main trend on the 4hr chart using the basic definitions above.
Step 2: Confirm that the pair is in fact trending well on the 30min chart.
Step 3: On the 5min chart, enter the trade on the next higher high (if in an up trend) or the next lower low (if in a down trend.)
Step 4: Trailing the stop loss. Set your stop loss at the valley the previous wave, and trail it at every wave valley.
Exit when your trailing stop has been hit.
This is simple price action and produces significant profits. Some days will be less than 100 pips profit, some days will be over 1000 pips profit. It has been averaging out to be roughly 200 pips profit every night.
You MUST be careful not to enter the market when it is not trending well. If the 30min is ranging, DO NOT TRADE.
Trade Example:
http://img503.imageshack.us/img503/7841/example2ku2.png
Blue Line: 4hr changed to uptrend and 30min was trending well.
Green Line: Long Entry.
Dotted Red Lines: Where our stop loss was being trailed.
Profit: Roughly 85-90 pips.
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More Information
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Alright everyone. I have been trying and trying to figure out the best way to explain this system better. I haven't come up with a solution i'm confident will explain it well enough so i'm going to start off by explaining each of the 3 steps I originally wrote. Also, Starting next week, every single trade we take will have it's own thread with pictures of the entry. This way every single trade can get seperate analysis, questions, and answers in a much more organized fashion.
--Step 1. Identifying the main trend on the 4hr chart--
As you know, I use ONLY the high moves and low moves to determine the trend. I do not use trend lines, fib, macd, moving averages, or any other method of determining the trend. Some people probably disagree with what I consider a "wave." I consider ANY move up or down to be a wave. That means any time consecutive bars move in one direction, is a wave.
First I will show you the chart I will be using without anything drawn on it.
http://img18.imageshack.us/img18/5635/wavescopy.gif
In the picture of GBP/JPY below, I have drawn over the chart every single wave up and down. At the 2 black X's, that is when the trend changes direction. The current trend is shown by the green and red lines that I have drawn below the price.
http://img24.imageshack.us/img24/1466/miniwaves.gif
Before point 1: We are in an uptrend.
Point 1: A move down has been broken, we are now in a down trend.
Point 2: A move up was broken we are now in an up trend.
Here is the same chart without the up and downs drawn, only the main trend.
http://img10.imageshack.us/img10/6371/wavesedit.gif
---Further Information for steps 2, 3 and 4 coming soon.---
--Step 2. Confirm that the 30min chart is trending the same direction at the 4hr--
Start by using the same principals shown in step 1 to determine the trend on the 30min chart.
If the 30min chart is trending the same direction as the 4hr chart, then use the 5min chart to determine your entry.
If the 30min chart is trending against the 4hr chart, use the 3min chart for your entry.
--Step 3 and 4. Entries and Exits--
In this image, the 4hr chart is trending down, so we are only taking short entries.
5min chart:
http://img529.imageshack.us/img529/3051/5min.gif
Circles: Trade entries
Black lines: Stop loss moves
We'll start with our 30min entry.
That trades first stop loss is line 1.
We then move it to line 2
We move it to line 3 and are stopped out at the X.
Trade A.
Our first stop loss is Line 3.
Our second stop loss is Line 4
Our third stop loss is Line 5, which we are stopped out on, at the X.
Trade B.
First stop loss is line 5.
Second stop loss is line 6, which we are stopped out on, at the X
Trade C. Our first stop loss is Line 7, the chart is cut off so we don't know where this trade goes.
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Conclusion
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I hope the additional information helps explain how and when I trade. I truly believe the best way to learn this system is to follow along with my live trading every night starting at 1am EST/6am GMT. I think the new system of posting pictures and giving each and every trade their own thread for discussion and questions will really clear up a lot of questions.
Real time trades and stop loss moves will be posted in the chat room at: http://intradaywave.freehostia.com
Each trade will get an image of each time frame in a separate thread on the forums at the same web address. Please ask your questions in the trades forum post as I do not have time to answer the large number of questions that come through the chat during trading times, and trade at the same time.
On an average day i'd say i'll trade to around 7 or 8am. Eastern Standard Time.
