5 minute wave analysis. (Intraday price action method) (5 minute Wave Analysis. (Intraday price )

The best way to learn this system is to join me for a live demo every night starting at 1am EST / 6am GMT.

Please go to: http://intradaywave.freehostia.com/ Chat room for live trade postings.
When I get trade and stop updates in the chat, they are posted in real time.

Chart settings:

Open 4 hours, 30 minutes and 5 minutes for any currency pair you want to trade.

Uptrend: Produces higher highs and higher lows.
Downtrend: Produces lower lows and lower highs.

Step 1: Use the basic definitions above to identify the main trend on the 4-hour chart.

Step 2: Confirm that the currency pair is actually trending well on the 30-minute chart.

Step 3: On the 5-minute chart, enter the trade at the next higher high (if in an uptrend) or the next lower low (if in a downtrend).

Step 4: Trailing stop loss. Place your stop loss at the trough of the previous wave and trail your stop loss at each trough.

Exit when your trailing stop is hit.

This is simple price action and can generate substantial profits. Some days the profit will be less than 100 pips, and some days the profit will be more than 1000 pips. The average profit is about 200 points every night.

You have to be careful not to enter the market when the trend is not good. Do not trade if the 30 minute range is within the range.

Trade example:

http://img503.imageshack.us/img503/7841/example2ku2.png

Blue line: The 4-hour trend turns up, and the 30-minute trend is good.
Green line: long-term entry.
Red dotted line: where we trail the stop loss.
Profit: about 85-90 points.

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More information
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Okay everyone. I've been trying to figure out the best way to better explain this system. I haven't come up with a solution that I believe can explain it well enough, so I'll start by explaining the 3 steps I originally wrote. Additionally, starting next week, every trade we make will have its own thread with an entry image. This way, each transaction can receive individual analysis, questions, and answers in a more organized manner.

--Step 1. Identify the main trend on the 4-hour chart--
As you know, I only use high and low moves to determine trends. I do not use trend lines, fib, macd, moving averages or any other method of determining trends. Some may disagree with what I consider "waves". I think any up or down is a wave. This means that any time consecutive bars move in one direction it is a wave.

First, I'm going to show you the diagram I'm going to use, with nothing drawn on it.
http://img18.imageshack.us/img18/5635/wavescopy.gif

In the GBP/JPY image below, I have plotted each up and down wave on the chart. At the 2 black X's, that's when the trend changes direction. The current trend is shown by the green and red lines I drew below the price.

http://img24.imageshack.us/img24/1466/miniwaves.gif
Before point 1: We are in an uptrend.
Point One: The downtrend has been broken and we are now in a downtrend.
Point 2: The uptrend was broken and we are now in an uptrend.

Here is the same chart without the ups and downs plotted, just the main trend.

http://img10.imageshack.us/img10/6371/wavesedit.gif

---More information on steps 2, 3, and 4 coming soon. ---

--Step 2. Confirm that the 30-minute chart and the 4-hour chart have the same trend--
Start by using the same principles shown in Step 1 to determine the trend on the 30-minute chart.

If the trend of the 30 minute chart is the same as the trend of the 4 hour chart, then use the 5 minute chart to determine your entry point.
If the 30-minute chart is trending opposite to the 4-hour chart, use the 3-minute chart for entry.

--Steps 3 and 4. Entering and Exiting--

In this chart, the 4-hour chart is trending down, so we only make short-term entries.

5 minute chart:
http://img529.imageshack.us/img529/3051/5min.gif

Circle: Transaction entry Black line: Stop loss action

We'll start with a 30 minute admission.

The first stop for this trade is line 1.
Then we move it to line 2. We move it to line 3 and place a stop loss at X.

TradeA.
Our first stop loss is line 3.
Our second stop is line 4 and our third stop is line 5, where we stop at X.

Trade B.
The first stop loss is line 5.
The second stop is line 6, we stop at X

Transaction C. Our first stop is line 7 and the chart is truncated so we don't know where the trade is going.

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in conclusion
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I hope the additional information helps explain how and when I trade. I firmly believe that the best way to learn this system is to trade live every night starting at 1am ET / 6am GMT. I think the new system of posting pictures and giving each transaction its own discussion and question thread would really solve a lot of problems.

Live trades and stop changes will be posted in the chat room: http://intradaywave.freehostia.com
Each transaction will get an image for each time frame in a separate thread on the forum at the same URL. Please ask your questions in the trading forum thread as I don't have time to answer the numerous questions asked via chat while trading.