The equation can be found on some forums, reproduced here:

HL5 = (hi/lo)*close

HL4 = ( ((hi/lo)+0.83)/1.83 ) *close

HL3 = ( ((hi/lo)+2.66)/3.66 ) *close

LL5 = close - (HL5-close)

LL4 = close - (HL4-close)

LL3 = close - (HL3-close)

If the market opens BETWEEN the H3 and L3 levels, you must wait for price to approach either of these two levels. Whichever level it hits first gives you your first trade.

If the H3 level is hit, the idea is that you go SHORT (against the previous trend) in the expectation that the market is about to reverse, with a stoploss point somewhere between the H3 and H4 levels (if it is H4, chances are it's going to breakout bigtime upwards, so you want your stop to be before that!).

It is suggested that you wait for price to bounce back down into the H3 level again before entering the trade, as you will therefore be technically trading WITH the short term trend. You need afair amount of experience for this style of trading. The opposite, of course applies if the LOWER L3 level is hit first - wait for it to come back up, then go LONG.

In this case, you wait for the market to retreat back thru the L3 or H3 level - you will then be trading WITH the trend, and once again, put a stop loss somewhere before the matching H4 or L4 level. Taking profits is down to you - trailing stops seem popular. You need to be aware that you WILL want to take profits at some time during the day, because the market is unlikely to 'behave' and stay right-sided for your trade. These reversals from H3 and L3 appear to happen fairly frequently during intraday trading.