The pattern of Find a wave 3 and 4, to catch wave 5, i.e. Setup 1 is one that gives you Higher ODDS of success.
Now you have options to apply risk and trade management techniques to manipulate results. e.g. in this example of Setup 1 on DAX h1.
You could have taken Entry using the Standard Box entry with SL above the box and Entry Below The Box. You will then double that distance between SL and Entry and that would be your 2X (or 2R) Target Point or Take Profit Point.
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| #DAX30 H1 Chart – Setup 1 Example |
But also, you could have done this.
Took entry below the box, Had 50 SL, that was somewhere between the box. and set a 100 points SL. That meant I got 2R profit, and it was hit , in time and points, far before the example above.
There are a number of ways in which you can benefit from a pattern that repeats often enough and gives a higher chance of happening. In other words, as long as you know your edge, you can benefit from it by utilising several different trade and risk management techniques. T
The Setup that gives us the edge in the market is what we call the Setup 1. And here it is. Below I give examples of two types of setup 1. If you are an AIMS Member you’ll benefit more from the following images as you’ll know the background and further explanation about it.
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| Example of Setup 1 with Flat Wave 4 |
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| Example of Setup 1 with Steep Wave 4 |