he is drawing a trendline matrix... it projects out possible turning points, the moving averages act as trend filters. If MA indications is up and at next break of trendline off peaks, buy quantity with stop in place If MA indications is down and at next break of trendline off troughs, sell quantity with stop in place
With that many lines price is bound to reverse from some of them simply by chance. What's the use then?
its all about probabilities and algo's in the market doing the same thing on the fly... types of algo: 1) if MA indications are up only scalp on the buyside if MA indicatioins are down only scalp on the sellside 2) if MA indications are up only scalp on the buyside with a line break. if MA indications are down only scalp on the sellside with a line break.. its all about decreasing the probability of stop loss being hit on 'noise' variance, those peaks and valleys in price action are the outliers where you want to enter the market.
I'm giving away too much.. if you look on the above chart, 2263-64 was the last line break, orderflow volume generally starts about 10:30.. here is a news trading algo below.