Chapter TwQ

Breaking Waves

To get the most from a wave a surfer attempts to catch it just as it begins
to break. The area where waves start to break is known as the impact
zone and this is where you will see surfers' congregate, waiting for their
turn to catch a wave. Channel Surfing works in a similar way because
most ofthe entries are based on the break of a channel line. But a
breaking wave can at times be hard to predict. While we may already
have several choices for entering a market, all of them are based on a
clear and distinct channel that is either fully or partially developed.
Unfortunately, some markets can be very uncooperative about revealing
a channels form, making it very difficult to pinpoint a low risk entry. So
a modified entry is necessary in order to get around this problem.
One case in point involves the early stages of a trend before any channel
is well defined. Price may be breaking higher or lower and giving clear
indications that there is a valid trend in there somewhere, but you can't seem
to put your finger on any specific point of entry until after it has jumped to
a high-risk area. A market that repeatedly gaps and then pauses is a prime
example and can be very tempting to trade because the jumps in price tend
to be very quick and large moves. The problem is that every time it does
pause it just lingers there without any indication of the direction the next
break will be in. This can leave you very nervous about attempting any
trade. So the profit potential is there, but you just don't have the confidence
to trade it. Because a market like this tends to jump so radically, a low risk
entry is essential in case you are wrong about the direction of the market.
What this all boils down to is that y3o1u need a simple way of
determining