in their attempts to organize and analyze markets and to increase knowledge as to how markets at lually work. I he most prominent approaches to date have come from W. D, Gann, the Dow I lieory, and tire Rllioii Wave 1 heoiy. Each approarli endeavorpd to organize the markets, yet for the vast majority of traders, tfiese concepts remain untradeable in real-time. For example, it is now widely recognized thai the Elliott Wave Theory is based on hindsight rather than foresight, obviously calling its tradeability into question.

The SymiTietry Wave Method reveals wtiai 1 consider to be the single most powerful way to first organise, then analyze, then profitably trade the markets. It provides a unique insight into price action and the overall structure of developing trends.

You will not find lengthy discussion and narrations in this book. The Symmetry Wave Method is presented in a direct and simple manner, accompanied by pertinent observations that have comefromuncountablehouisof research and trading, propelled by a passion tounderstand how markets organize tl-u?mselves.

SECTION 1

Laying The Groundwork For The Symmetry Wave Trading Method

CHAPTER ONE

The Importance Of Having A Perspective

Whether it is someone who iikes lo establish a position in a market and keep it for several months, or someone who prefers to gel in a markeland exit within a few minutes, the framework of a perspective is essential for success. The object behind millions of hours of research by thousands of people has been to come up with a perspective through which they could earn money trading the markets. However, due to the complexity of the markets, its ber.n nearly impossible to come up with one successful perspective.

With the vast multitude of chart patterns, and varyingmagnitudes of price moves, it Isunlikely . that a single perspective can be found that will master all the possible complex patterns. For example, no single indicator can decipher between a slow-trending market, fast-trending m.arket, and sideways market. Not even a combination of indicators can accomplish such a complex task. While it i.s possible to construct an indicator to take advantage of one specific pattern, that same indicator will perform miserably during incompatible patterns.

To emphasize how even a simple image can fiave several perspectives locked into it, here are a few illustrations. Each picture simultaneously contains two images or patterns. The first picture contains a rabbit and a duck, and the second picture contains a goblet and two faces Icxiking at each other.

The following geomekic pattern, a more complex image, can be seen as being made up of MUems arranged in different ways.

Il is possible to see the above pattern as being made up of several flowerlike patterns, or

.. it could be .viewed a$ many hexagons arranged in hortzontal rows, or,

... it could be viewed as hexagons arranged in diagonal rows.

All of the above perspectives are correct, yet the mind can only focus on one patterrt at a time.

You may have heard that trading is an art and not a science. Art is a subjective experience. If an art expert and you were to look at the same masterpiece, the art expert would see thoughts, feelings, imagery and perspective that you had not considered. This leads us to two very important observations, first, a chart is an image and contains many perspectives. Your perspective, or how you interpret a chart, will depend on your intentions. People interpret the samechandifferently. Second, itisonlypossibletoseeonepatternorperspectiveatatime. Your mind may move very quickly between two perspectives but can only see one perspective at a time.

If you see two different possibilities as to how a market could progress, even if the difference is slight, it wi il lead to confusion and lack of confidence, furthcnTiore, since your attention and mind can only focus on orie perspective at a time, in order to develop consistency and confidence, you should choose one of the following: to trade with or against the trend; to trade long-term or shori-icrrtJ; to trade a sideways market or a trending market. By switching between perspectives you can rationalizegoing both with and against a trend eyery tradingday of the year. One idea, one perspective, one style of trading {plus consistency! lead to clarity and success. Compromise leads to confusion and confusion leads tochaos; therefore, it is necessary to choose a perspective to trade with, and ignore that which does not fit the perspective you have chosen.

In order to build a perspective, it is essentia! to reduce charts to their simpler components. A chart is a complex structure made up of price fluctuations. These price fluctuations are termed v«raves, and they come in many .sizes. See Illustrations 1-1 and 1-2.

Later, inChapterThree, we will demonstrate howorganizing waves intothe Symmetry Wave perspective helps make it easier to understand how markets function. Also, note in Illustration 1-2 that yvaves are made clearer by drawing lines through them.