Trading is all about smart wave selection

I’ve traded the market for nearly 20 years. Every trading day — bar a few much-needed holidays. Over that time I’ve developed a system that overlaps technical and fundamental analysis to tell you WHEN to trade…and when NOT to trade.

As in surfing, you need to be willing to wait it out for the perfect set up. Sometimes that can take ages. It means hanging out till the multitude of variables all stack up in your favour — size, height, angle, tide, timing, position and, most important, placement.

In trading there are even more variables you need to take into account — momentum, distribution set-ups, risk-reward ratios, correlations, breakouts from pivotal points, fundamental data and much more.

If you interpret these variables correctly, you can make profitable trades.

Even in a ‘soup’ market.

For instance, during one two week period in May 2012 everything seemed to be going wrong with every major economy simultaneously. Europe was imploding. Here the ANZ CEO came out and said that funding markets were freezing up again. It was enough to kick the stuffing out of an attempted ASX rally.

The ASX plummeted 214 points over 6 trading days.

But I had prepared my subscribers in advance.

That’s five gains safely banked at the same time the market fell 214 points…over just six days.

Kelly Slater is arguably the world’s best surfer.

He comes from Huntington Beach, California, which is NOT world-class surf. Many of the world’s best surfers come from there. Why? Because learning to ride windy, frothy and choppy conditions hones your wave-judging and overall surfing abilities more than just riding clean, glassy waves all the time.

If you can surf junk, you can surf anything.

If you can find just a few little power-pockets in soupy waves, you’ll have an even better chance of finding the right spot when the share market’s version of ‘Big Wednesday’ arrives.

This has been a tough market.

But, as I’ll demonstrate by showing you some incredible charting data shortly, ‘Big Wednesday’ is coming.

Again, so there’s no confusion, I’m not predicting a market move that takes place LITERALLY on a Wednesday. If you can pinpoint moves weeks in advance with that precision, I’d love to know your secret!

I call it a share market ‘Big Wednesday’ because like the Great Swell of ’74 I’m predicting a truly unique, show-stopping, your-grandkids-will-tell-their-grandkids market event.

(And if you’d like to find out the specific trades I make when I see the big move coming, you can. On a no-obligation basis. CLICK HERE to take a 90-day trial of Slipstream Trader.)

But here is the point I’m making about this big breakout.

Troy Buckner, founder of NuWave Investment Management, says the market over the last three years has been terrible for traders because there’s been no directional persistence. ‘It has been a weak few years and the strategies that survive best are the ones that tread water effectively until the directional persistence is back.’

I’ll show you what the stakes are in a second.

I actually have a very good record at picking big moves before they happen.

I give general market forecasts on YouTube which one commenter called ‘scarily accurate’.

Adrian is one of my subscribers, and he emailed my publisher to say:

The point is, no amount of training or education can help you pick pivotal points in the market.

You just need to look at the charts and read the signs…every minute, every trading day, for years. Do that and patterns start emerging.

For instance:

On Thursday April 15th, 2010 the ASX clipped above 5,000 points. No surprise there — data out of China had been pretty strong that week. Aussie stocks responded favourably.

Most investors didn’t realise that the market was actually making a high.

I did.

Forty-eight hours before, on the Tuesday, I sent an email to Slipstream Trader subscribers that started:

I raised the alarm because of a seemingly unrelated and widely ignored piece of news from the US that I felt was about to affect the technical set-up on the ASX 200 — bank stocks particularly.

The American S&P 500 was already selling off, and I believed this would have a knock on effect here…with Aussie banks being among the worst hit.

In the three weeks that followed the market endured its biggest sell off since November 2008, the peak of the global financial crisis. The ASX tumbled to 4,480 — more than a 10% dive since its April 15th high.

In that first, torrid week of May, $90 billion was wiped off the value of Aussie stocks in just five days, with banking and mining stocks the worst hit.

Tens of thousands of Aussie investors got smashed.

Members of my service did not get smashed…provided they followed my advice.

I told my readers in April to make two ‘short’ trades: one mining stock, one banking stock.

What I do is look at the technical ‘topography’ of the market and I overlap it with fundamental data.

Then I identify specific trades and use more technical signs to time the entry points in those trades.

The point is you could have had advance warning of a big market move…and locked in profits even as the ASX tanked.

One of my subscribers, Bill Edwards, emailed me the week that followed:

So to be clear: