Using Wave Projection to Tame Price’s Most Terrifying Runs

Like La Meije, when price is on a steep run, conditions can be extremely hazardous to your entries, and ultimately your account. Millions of traders never fully understand the danger of a particular run until they’re already barreling down the wrong side of price — losing more capital by the second.

La Grave, France. After a 40-minute ride to the top of this 10,500-foot mountain, the magnitude of this slope hits you. There are no freshly groomed ski runs and there is no ski patrol to look after you. You’re on your own.

Appropriately named ‘the grave’, this particular stretch of mountain is for experts only. Even for the world’s best, the runs range from ‘challenging’ to ‘downright terrifying’. More than one skier has died attempting to make it to the bottom.

When price is on a run, more than one account gets killed every second. Accurately sizing up the run’s depth and veracity can be the difference between trading on the right side of a trend — or facing total wipeout.

Fortunately, you have a guide to get you profitably positioned.

A way to evaluate the dangers of treacherous price runs

La Grave has two main routes of descent with several offshoots available. Among the runs you have to watch out for, it’s La Meije that can do you in in an instant, with a vertical drop of 2,000 meters and a technical difficulty of ‘extremely serious’.

Like La Meije, when price is on a steep run, conditions can be extremely hazardous to your entries, and ultimately your account. Millions of traders never fully understand the danger of a particular run until they’re already barreling down the wrong side of price — losing more capital by the second.

Imagine being able to see the size, depth and power of a pricing run, without even having to unfold a map or lock into a binding. With Wave Projection, thanks to the Order Flow Sequence suite of tools — you’re able to do exactly that. This insight means safety for your entries and your account.

Reveal a run without taking a single slope

Mechanical access to the mountain is limited to a closed, two-stage pulse gondola system. You can catch the first at 1,450 meters which brings you to an intermediate station; another ride after that and you’re at 3,200 meters — ready to look your maker straight in the face.

When using the Wave Projection, you need only to draw from the highest point to the lowest point in a pricing swing (or vice versa) — without stepping foot on anything. Doing so will give you a volume profile that is essentially a detailed map of that run — telling you where all the action took place.

More importantly, Wave Projection will tell you the veracity of any given price swing — by telling you the total volume and width (bars). Being able to evaluate price moves from this perspective will give you a sense of where the peak (or bottom) really is.

This puts you in a position to ski the run without wiping out.

Padding your pockets with the dangers of pricing slopes

If you’re ever interested in seeing the general conditions on any of the main runs, just check out the La Grave’s site. You’ll have an entire section with webcam shots that give you an hourly view of what’s going on at just about every run on the mountain.

Similarly, Wave Projection can be extended to every price run to tell you exactly what you need to know. While La Grave’s webcam shots won’t tell you much about oncoming conditions — Wave Projection will.

Simply compare one wave projection to the next, looking specifically at the Volume and Range. Even if price returns to similar levels, you’re looking for decreasing volume and range to tell you if the overall trend — or course — is losing steam.

This positions you to profit by locating the peak or valley that the initially dangerous run had to offer.

A point of projection, not confirmation, in your evaluation

Searching for peak or valley entries can be a deathly business if price is on the run for a new level. While volume may be decreasing, how can you really be sure that you’re seeing a top or bottom that you can really count on?

Unlike millions of retail traders that fall for false swings every minute — you have the benefit of Order Flow Sequence Tracking Intelligence. Thanks to this real-time intelligence, you can spot tapering conditions with Sequential Decline and Imbalances.

Considering Wave Projection as your starting point — not your final confirmation for an entry — will keep you from ultimately getting in on the wrong side. This approach will also help you avoid miscalculating a trend — like millions of retail traders do.

Taking dangerous price runs head on and winning

A yellow flag with black checks signals a run at La Grave that 95% of skiers will want to steer clear of. Yellow flag, black checks, AND a BLACK flag? Call home and check your life insurance policy. You’re at the top of one of the two death-defying runs.

When the market is on the run and price is waving two flags in your face — one of them black — don’t bat an eyelash. Simply grab your wave projection tool, drag it from top to bottom (or vice versa) of the run you’re sizing up. Take a look at the volume and the length for a sense of its strength.

Compare that to the next run, and the one after that, with successive projections. If your volume and length/range is tapering off — you know that it’s bottoming out. Exhaustion is setting in and a bottom (or top) is imminent.

Knowing where the bottom (or top) is puts you in position to trade for the bounce.

Adjust your goggles, take price head on and leave the wipeouts behind you.

Noft Traders offers a Funded Trader Program. To learn more, visit their informational page at NOFT-Traders.com.