“Ok, so just wondering…….how do u decide to use the 60min chart to enter the trade vs. the 180 or some other timeframe where the ‘wave’ appears to sync up with the price action and you still get confirmation from macd?”

*   *   *   *

Great question.  First, let me tackle the last part of the question.  In a swing trade (playing corrections within an established trend) I do no use the MACD.  Confirmation of the trend is enough and that means all I really need is the Wave itself for the set up.

The choice of the 60 minute has to do with market cycle recognition.

In other words, not all the timeframes will be heading in the same market cycle.  There are short, intermediate, and long term trends.  I think timeframe selection is an aspect of overall trade selection that many traders do not consider because they use the daily chart as the “trend” and not the actual trend on the the timeframe they are watching.  So it’s obvious to say then that I do not subscribe to multiple timeframe confirmation.  Now for those of you who want a “filter” you can certainly choose to trade in the direction of the daily chart as that is the most psychologically significant timeframe of all.

The example of the GBP/USD short was going against the overall (daily) trend but that was not necessarily a deterrent for me personally.  If it is for some of you, then you would be looking for buys whether they be swing buys (like the 15, 30, and 60 minute charts today) or momentum buys (like what’s setting up on the 180 and 240).

The process by which I choose which timeframe to trade from within a pair is what I call “triage”.  It’s a comparitive process that I start by checking the clock angle of my Wave individually on each timeframe.  The clearer the reading - the more I can trust what it’s telling me.  The market cycle reading is then what dictate what I will do with that particular chart.

Since the previous post was a swing short on the cable you’ll notice that the market cycle was a downtrend and that I set up the correction (bounce) from which I could follow the trend.  So the entry may be shorting into temporary strength — which is the correction — but the overall trade is a trend follow.