How To Gain A Market Advantage Using Harmonics

The Hawkeye Traders E-Letter — Your No. 1 Source for Volume Trading Insights

Hi Trader, Earlier this week, we started talking about my process for identifying potential stock setups using the TradeStation scanner. We'll continue that discussion in coming editions of the Hawkeye newsletter… And I actually gave my paid members a full tutorial on how to set up and use the scanner in this Wednesday's Hawkeye Traders Mastermind Training. Of course, all of those members-only training sessions are recorded and stored in our training archives… Which you can access at any time with a membership on any Hawkeye package or product. Today, though, I want to talk about another crucial concept that's key to successful trading… And that's trading with triple time frames. Let me show you an example…

Now, this is actually a quadruple-time frame setup, which I personally like to use in certain instances… But three time frames are all you really need to leverage the power of harmonics in the markets. Essentially, a harmonic is a wave with a frequency that is a positive integer multiple of the frequency of the original wave. Now, harmonics are used in all kinds of different disciplines, including music, physics, radio technology, electronic power transmission and many others. But all you really need to know is that harmonics are a powerful force that can help you see — and take advantage of — patterns in the markets. So, how do you set up a triple time chart using harmonics? Let me break it down… In the example above, the chart at the top left is a 3 minute chart. To find the integer multiples of my next two time frames, I simply multiply 3 by 2, which gives me 6… So, the chart in the bottom left pane is a 6 minute. Then, I multiply 6 by 2, giving me 12… And I have the corresponding 12 minute chart in the upper right pane of the image above. That's my go-to triple time frame setup — 3, 6 and 12 minute charts. Now, the bottom right hand chart is a 60 minute, which is OK because it's still a positive integer multiple of 3 (3 x 20 = 60). At this point, you're probably thinking, "OK, Randy, I see HOW you set up your triple (or quadruple) time frames using these fancy harmonics… But WHY are you looking at three time frames in the first place?" The answer is pretty simple. By looking at longer time frames, you're able to see the longer term trend… And trading in alignment with the longer term trend gives you a statistical advantage in the markets. Think about this… If the longer term trend of a market is short, but you're going long, you're going against the longer term trend, or counter-trend as we like to call it. Now, you may make some money trading counter-trend… But it won't be long lived, because the market will eventually go back in line with the long-term trend. That means you have a higher probability of getting to a larger profit multiple if you're trading in line with the longer time frame charts. Remember, one of the core principles of the Hawkeye methodology is to trade with the highest probability for success. And using a triple time frame setup based on harmonics is just another way for us to improve our probability of making money. Now if you'd like to learn about the other fundamental aspects of the Hawkeye system and see how it can lead you to consistent profits quicker and easier… Just click right here to watch a no-cost training video!

This Little-Known Rule Reveals A Major Flaw That Cripples Most Traders

As traders, it's easy to get caught up in the hype of the latest "hot" stocks… And even chase them as they make runs of several hundred percent. But did you know that the 80/50 Rule of probability states that once a major, sector-leading stock makes a huge upward surge, there's an 80 percent chance that it will decline by 50 percent… And a 50 percent chance that it will fall by 80 percent? Those are some pretty dismal numbers if you ask me. The good news is that there's a better way to trade than just chasing the trending stock of the day… And Ross Givens is breaking it down for you in his latest article. Click here to make sure the 80/50 Rule isn't crippling your trading… And discover the details of a system that routinely serves up winning, off-the-radar stock and call option plays!

The Hawkeye Team

Hawkeye Traders team1@hawkeyetraders.com hawkeyetraders.com

Call us: (888) 233-8598

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