Time Based Wave

In KG analysis concept, one important concept is the KG wave concept. It is said that "smaller waves move in the bigger waves direction and biger waves are formed by smaller waves".
If you wonder what a wave is, it is the price movement itself.
Now I'm not going to write all the theory here because it can be really confusing, even to me :D, if we can't see the application in the market then what's the use?
So I'll just go right away to the chart and let the picture say it all, I find it much easier to understand that way.
And mind you this concept differs greatly from Elliot Wave concept, so for you who are familiar with Elliot Wave (and hold it like a virtue) you might find this very difficult to accept :D

Okay first the wave itself is basically infinite, ranging from the smallest wave to the biggest one, and there is virtually no pattern in the move, it's random.
One thing very sure is it's just moving up and down, and that's the only pattern we have.
So to overcome this randomness another important thing in KG concept is the KG Time concept, in this we divide the waves based on time.
And this time is based on real life business cycle, so in this concept we have daily, weekly, monthly, yearly, etc etc, even the smaller intraday waves such as 8, 4 or even 2 and 1 hourly are used if needed.
Here we'll use LSMA to identify the wave. Why LSMA? Well, you can really use any tool you're familiar with but this LSMA is the standard tool we currently use to read market direction due to its more representative nature. If you don't have the indicator, just ask uncle google :D

Okay in this picture we can see the monthly wave, it's 120 period LSMA if you're on TF H4.



Notice the LSMA represents monthly movement, or wave. We will assume this as the big wave. Upwave is represented by aqua while downwave is represented by red.

And next we can see the daily wave, it's 6 period LSMA.



Notice that within the monthly wave, whether it's up or down there's this smaller wave, the daily moving in up and down rhythm but in general it's moving following the monthly direction.

Now let's take a look at it closer on H1, here the monthly is 480 period LSMA while daily is 24 period LSMA.



The monthly wave is formed by the smaller wave, in this case daily wave, and the daily wave is moving in the monthly wave direction.
Now within this daily wave, there are also smaller waves moving. Here for example we can see 4 hourly wave.
For better view, we'll switch to m15, monthly is 960 period, daily is 96 period and 4 hourly is 16 period.



See it closer, there's even smaller wave still, for example 1 hourly wave. This time we switch to m5, daily is 288 period, 4 hourly is 48 period, 1 hourly is 12 period.



So far I hope you can see what it means by "smaller waves move in the bigger waves direction and biger waves are formed by smaller waves".

Now you might wonder what's the use of this concept.
This concept helps us to read the overall price direction, from the big picture down to the very detail. I already wrote that the trend is something relative, it depends on where we're seeing it from and to, using this concept we can read the trend easily because here we have time as our basis.
One other thing is this concept really offers us wide degree of flexibility in our trades. Depends on our trading style, we can focus to any waves we choose, we might focus on monthly or longer if we trade on longer term, or weekly wave if we trade on midterm basis, daily for intraday, even smaller waves such as 8 or 4 hourly for scalping.

Well, that's all for tonight, I hope you find this useful :)