How to trade a third wave in the charts

Third waves in the charts can make for rocky rides, says John C Burford. But if you can hang on, they can be very profitable.

In my book Tramline Trading, I list my five favourite trade setups. One of these is the third wave. Today, I want to show how to put the odds on your side when trying to identify these very profitable moves.

One point to keep in mind is that a third wave is often the longest and strongest wave in a sequence. If you can latch onto a third wave, it is like catching a tiger by its tail it is a very wild ride, but often very profitable so long as you can hang on.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.