It uses chaos theory to find structure in the markets. There is some academic evidence the Forex market may not be chaotic. It does not seem to have long memory processes, like the equity and futures markets have.
It does have short or intermittent memory processes, and these are built around structures such as order flow. But it seems these give Forex temporary chaotic structure which this book is the best thing I have seen for finding.
If you day trade equities or futures then by all means use this method. But if you trade Forex, use it, but use it perhaps with filters (as a starting point, the gold standard of forex indicators, the 34 EMA). Those bullish and bearish divergent bars happen and they are possible paths to $$$, especially on the 30 minute chart.
Filter perhaps with RSI spikes and the 34 EMA. I use a bounce in the wave to tell whether this is a true divergent bar or not. But as always in Forex, the market can turn on you like nothing else, no matter what you do, so cut your losses where they tell you, at the spike top or bottom.
© 2010 Guy Barry - All Rights Reserved.
