BI-DIRECTIONAL IN-WAVE ENTRY
This technique is something that I should have included in my eBook “Forex
Surfing”, but I simply forgot to write about it then. Oh well, here it is
now. This concept is equally useful to you if you are “Surfing” or if you are
“Scalping”.
Sometimes (actually often) you’ll encounter times when you are uncertain
about the market direction, but you do expect it to move (not for times when
the market is likely consolidating). It’ll often appear that the market has
moved from a trending movement, retraced, done a slight extension that didn’t
cross the top/bottom of the wave, and retraced somewhat. When you see
something like this you might be wondering in what direction the market will
eventually break out in. FYI, the early stages of a triangle in formation look
like this too, but it might simply be a brief period of market indecision.
So now you are faced with a dilemma – in which direction do you attempt to
trade?
What I do is I, in such scenarios, might place two entry orders on both sides of
the double wave. The theory is that if it breaks out in one direction that it
should often continue (for however far) in that direction. Doing this you need
to be careful; you don’t want to get caught in a bull/bear trap if the market is
actually consolidating (so keep a close eye to scalp an exit at the first sign of
reversal in your new petit trend).
You’ll frequently see such a setup shortly after a Fundamental has been
released, after the market has settled from a strong panic reaction and
everyone starts to more logically evaluate in which direction the price should
move.
Simply put, you “secure your entry” as was taught in the above section, but
you do two of them for the opposite directions. Once one of your two entry
orders gets activated as a trade then simply cancel the other entry order.
Notice on the above image how it appears that you’ve got a downward
surfable wave (the larger wave), but it also appears that you have a smaller
upwards wave? Simply straddling the market in this way means that you’ll be
able to catch trades when otherwise your uncertainty would prevent you from
trading. As a general rule of thumb use this method primarily during market
overlap times when the market is likely to resume some kind of a trend rather
than just be consolidated (as often happens outside of market overlap
times). Again, after getting entered be watchful to scalp an exit as a
precaution (it is always better to exit with even a couple of pips than to suffer
a potential loss, whenever possible).
You should also note that when you see something like this it may potentially
be the start of a consolidation or even (rarer) a triangle. Later in this eBook I
explain how to deal with those situations should what you are seeing develop
into either a consolidation or triangle.
TIP – In the eBook “Forex Sailing” I give a technique that is useful to apply
to this “Bi-Directional” opportunity. Look for the technique in the section
titled “Netless Straddle Trading” which will teach you how to trade these “Bi-
Directional” opportunities without getting doubly burned if the market
bounces around indecisively.
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