Getting Started in Currency Trading, + Companion Website: Winning in Today's Market, 4th Edition

Chapter 18

The Propagation Trade Setup

Introduction

In this chapter and the next one, I show the Goodman Method at work using one of the most popular formations in Goodman Wave Theory (GWT), the propagation trade setup, or PTS. This walkthrough will allow you to learn not only a practical application of GWT that is easy to apply, but see the Goodman techniques and concepts for money management in action as well.

Goodman Wave Theory offers three trade setups. The return setup is easy to learn and master. It is an ideal complement with other trading methods. The Goodman 3-D setup uses all aspects of GWT. It can be very precise, but takes considerable time to learn and apply correctly. The propagation trade setup sits between the return and 3-D. It is relatively easy to master, the formation is plentiful at all time frames, and the serious student can dig very deep into it.

The PTS

The propagation trade setup has proven to be the most popular setup for most Goodman traders.

While the PTS accesses the three primary principles of Goodman Wave Theory, propagation, intersection, and 3-C, it relies most heavily on the principle of propagation.

PTS Time Frames

Tip: Thus far, you have been working with only a single time frame. The PTS will give you an idea of how analysis of multiple time frames for the same currency pair is accomplished.

Three time frames are used for the propagation trade setup. Do not worry, most of the work is done on the time frame you have selected as your trading ...