Timing Method

[OAC 10]

wave i don't have a clue about ew and gann, i'm a trendline and mp guy,i,ve got a tl at 1365, another at 1336,if u make one big mp chart using a letter for each week,ytd,theres an area btween 1385 and 1335 that we neeed to fill,1335 being the next magnet,do mrkt cycles denote sentiment changes?

 

MP and trendline confirmed by gann and ew is an excellent approach to the market :applaud:.

[OAC 10]

BTW, this may be of interest to some. another member in the Wyckoff Forum recently posted this link which is a reprint of Richard Wyckoff's interview of Gann back in 1909: http://www.tradingfives.com/gann/wd-gann-interview-1909.htm

It is pretty incredible stuff considering there were no computers or even hand-held calculators back in those days. Just how do you calculate the square root of a number without a calculator ? I guess you have to use a table of some sort and then zoom in on the details. I would imaging a simple task of calculating a square root within the accuracy of 4 decimal places with a simple touch of a botton today would take a whole day back then. :o

[OAC 10]

 

Should Monday prove to be a reversal, it will likely be a major bottom.

 

Last Friday's relentless decline blew through a lot of significant supports on its way down. Will the medianline on this 15min chart hold on Monday ?

[thrunner 10]

BTW, this may be of interest to some. another member in the Wyckoff Forum recently posted this link which is a reprint of Richard Wyckoff's interview of Gann back in 1909: http://www.tradingfives.com/gann/wd-gann-interview-1909.htm

It is pretty incredible stuff considering there were no computers or even hand-held calculators back in those days. Just how do you calculate the square root of a number without a calculator ? I guess you have to use a table of some sort and then zoom in on the details. I would imaging a simple task of calculating a square root within the accuracy of 4 decimal places with a simple touch of a botton today would take a whole day back then. :o

Gann probably got his squareroot idea from playing with the newly introduced sliderule in the 1880s, although sliderule had been invented in Europe in 1622.

1622 WILLIAM OUGHTRED invented the »Slide Rule« as two linear or

two circular sliding scales.

In fact the Gann wheel is a square root calculator.

[waveslider 10]

In the past month I have been applying gann lines as I see the experts do it, surprisingly accurate. Just like anything else, you have to establish a discipline to trade them. I don't have that personally, but they appear very much worth investigating.

Have read that trading fives article, thrunner, and was tempted to try to program it, the idea impressed me.. I'm sure someone has exploited that idea, but variations are always possible - - the limits are in the mind of the trader!

 

Hilarious, OAC , I have the exact same median line on my charts. Like that one, I think I drew it on YM and it's identical.

 

Back to this topic, wanted to point out one variation that I mentioned last week (last wednesday, the doji bar). So what it looks like is going on is that a larger wave (down) is taking place. Volatility contracted into the reversal day on wednesday, and it appears to be expanding out in a downward direction.

 

The bullish scenario are the white lines - this is the larger wave. In this bullish scenario, time tried to reverse too early on Thursday, and had to do that move down on Friday in order to establish a low on the proper reversal day.

 

I hope anyone reading can follow me here...

 

The thing that I would like to point out here is that using gann calculations and fib numbers, etc. - these are fixed ratios/numbers. But as we know, the market is dynamic and wave sizes are always changing, or being affected by multiple waves.

 

The only ratio I personally pay attention to is 50%, because this is a natural balance.

 

The key to be watching, and how to trade the charts I am posting is to note volatility expansion and compression. Currently the market is in a period of expansion after thursday and friday's wide ranges. We should see range contract soon, possibly monday. If friday's lows hold and volatility expands higher, the white lines are in effect.

Edited June 8, 2008 by waveslider

[waveslider 10]

Ok although the close was higher, the low was penetrated, and there was a low range day, as suggested.

 

Volatility has contracted and price is approaching a pivotal point in time and price but it's not ready to turn yet according to this cycle - here's why:

 

This chart takes the bearish opinion I posted last week. This suggested that last tuesday, the 22nd was the halfway mark for the current pullback in progress. The reason for that was because the cycle high did not come in as a high, indicating a larger wave was in progress.

 

All I did was take this cycle and extend it back to look for confirmation. Just about every cycle day is a major price reversal or a volatility contraction.

 

The major cycle here is 22 days, and you will notice at the halfway mark 11 days is also important.

 

This cycle suggests a low coming on 6/19, or next Thursday. On the market profile chart there are 3 VPOC levels to be hit below, first one around 1320.

 

According to this cycle chart price will move up until wednesday, then down into next thursday's time reversal.

 

As many have probably noticed, there is a potential wolfe wave that price is at pt. 5 of (not drawn). Personally, I don't think it'll work out.

 

The dark cyan lines show where a matching move would take price, about 1339.5. This suggests something of a double bottom is in the works, though it may just look like a price spike on this daily time frame.

[BigKahuna 10]

Here is a pretty simple way to find support and resistance using some gann related techniques.

 

By way of example, I will use the ES. On the hourly chart I pulled up, 1440.22 was a significant high, so I will use it for illustrative purposes.

 

1. Take the square root of the significant number.

 

sqrt of 1440.20=37.95xxx (I will round to the nearest cent)

 

2. subtract/add .25 from this square root to find the 45 degrees of support/resistance from 1440.22

 

37.95 -.25=37.70

37.95 +.25=38.20

 

3. square these numbers

 

37.70^2=1421.29

38.20^2=1459.24

This is the 45 degrees of support and resistance of the significant high at 1440.22.

 

4. To find other degrees of support and resistance use the following factors:

 

45 degrees .25

90 degrees .50

135 degrees .75

180 degrees 1.0

225 degrees 1.25

270 degrees 1.50

315 degrees 1.75

360 degrees 2.0

 

If you would like to experiment with this a little, use your sq rt number as the number of bars/candles to add a time element. For example, find the 45 degrees of price and time element, connect with a trend line diagonally(repeat each 45 degrees). You may just find it a nice framework to trade from.

Edited June 10, 2008 by BigKahuna

[BigKahuna 10]

A picture is worth a thousand words...

[waveslider 10]

Its an elegant method, Kahuna. How did you come on the 38 bar cycle?

Which chart service do you use?

[BigKahuna 10]

Its an elegant method, Kahuna. How did you come on the 38 bar cycle?

Which chart service do you use?

 

The number of candles/bars is just the sqrt of the price used. In this case, 1440.22(sqrt is 37.95 rounded is 38)

 

As for the charts, I trade only spot currencies and the best over all charting is Metatrader 4 for this market. They are available free from many different "brokers," or through the metaquotes web site (not sure url's are appropriate lest I be labeled a spammer).

[Guest forsearch]

4. To find other degrees of support and resistance use the following factors:

 

45 degrees .25

90 degrees .50

135 degrees .75

180 degrees 1.0

225 degrees 1.25

270 degrees 1.50

315 degrees 1.75

360 degrees 2.0

 

Are these factors above unique to ES? Just trying to figure out how you derived them, is all.

 

-fs

[BigKahuna 10]

forsearch,

 

No, the factors used are not unique to the ES, but can be used in all markets. They come from the study of Gann's square root calculator, commonly called the Square of 9.

[waveslider 10]

Thanks BK -

I understand, and this is very similar to the article thrunner mentioned on tradingfives. By the way, BigKahuna, don't know if you are from hawaii or not. I just got back from the big island and haole gave some skin to da reef bra. Only was able to surf for a day, but paid for it good.

As far as your support and resistance idea, I guess you could just take major peaks/troughs, create these calculations and look for confluence. Lots of work, but so it goes..

[BigKahuna 10]

Thanks BK -

I understand, and this is very similar to the article thrunner mentioned on tradingfives. By the way, BigKahuna, don't know if you are from hawaii or not. I just got back from the big island and haole gave some skin to da reef bra. Only was able to surf for a day, but paid for it good.

As far as your support and resistance idea, I guess you could just take major peaks/troughs, create these calculations and look for confluence. Lots of work, but so it goes..

 

 

Sometimes I wish I were in paradise, but I am not.

 

As for the calculations, excel makes it pretty easy, really. The attached xls is what I use in my day to day trading. It is not elaborate, but it is functional.

 

If anyone is willing experiment some more with this, instead of using a high or low, use the range of the last wave. You may be surprised what you can see when you play with this a little.

 

bigkahuna

SQRT Calcs.xls

[waveslider 10]

 

If anyone is willing experiment some more with this, instead of using a high or low, use the range of the last wave.

 

could you explain this further or give an example? Where would the range be entered into your spreadsheet for example.

 

Thanks

[waveslider 10]

My last chart suggesting the cycle end coming in on june 19th was pretty arty. I was using my eye to picture whether the wave size is expanding or contracting. It appears to be expanding.

 

To be completely unbiased, here is the current picture using a strict 4 bar pivot cycle. The cycle end is due on friday.

 

This yellow line keeps catching my eye. 2 touches on either side of the price cross.

 

Tempting buy here, still to early according to these cycles..

[OAC 10]

The number of candles/bars is just the sqrt of the price used. In this case, 1440.22(sqrt is 37.95 rounded is 38)

 

Actually the concept of change in price equal square root of change in time came from Albert Einstein. In a paper he published in 1905 called Brownian Motion, he found that a particle suspended in a liquid tend to move randomly and that the total range of the particle's movements would expand according to the square root of time.

Similarly, the brightness of a star diminishes in proportion to the square root of one's distance from the star and the influence of gravity diminishes according to the square root of the distance from the gravitational object.

[BigKahuna 10]

waveslider,

 

The only way you are going to get this crude little .xls of mine to work is to use the price cell. Instead of high or low price, input amount.

 

OAC-interesting comment on Einstein. I have not delved into the study of the history of price to time ratios other than through my study of Gann. There seems to be some evidence that he was already using such methods at about this same time: 1900-1905. Thank you for enlightening us.

[waveslider 10]

What about entering points of control instead of hh and ll?

 

here is an auto square of 9 code for TS if anyone is interested. I don't fully understand it, maybe someone can explain it to me, but it sure shows some interesting levels. Use on intraday charts.

 

[LegacyColorValue = true];

 

{

Indicator: Sof9 "Square of Nine" by W.D.Gann

 

Codetalker modified Steven code

codetalker@codetalkerworld.com

March 25,2003

 

mod by mido 9/13/2003

sadhu@myacc.net

}

 

Inputs:

TextPlaceTime(1200), { Place the text (if any) at this time location }

TextColor(magenta), { Text Color }

LineColor(magenta),

LineStyle_1to5(2),

LineWidth_0to6(0),

ExtLeft(false),

BaseNumber(1);

 

Vars:

xloop(0),

Counter(0),

Degree(""),

ID(-1),

n(3);

 

Variables:

ZeroDegrees(1),

FortyFiveDegrees(2),

NinetyDegrees(3),

OneThirtyFiveDegrees(4),

OneEightyDegrees(5),

TwoTwentyFiveDegrees(6),

TwoSeventyDegrees(7),

ThreeFifteenDegrees(8); { Array Index Positions }

 

Variables:

DegreeSections(8), { This only defines 8 major degree sections }

FullArrayCount(49), { I want Array dimensions definable with variables....Like these....Hello TS...come-on }

MyBaseNumber(0); { Used to build a contant }

 

Arrays:

DegreeOfAngle[8,49](0),

DegreeOfAngleWord[8]("");

 

{ This little dll is used to return a degree symbol string for us...it could of course return any specific ascii character/symbol }

DefineDLLFunc: "CT_CharKit.dll", LpStr,"CT_RetAsciiStr",Int,Int; { Ascii value, Number of Repeats }

 

If CurrentBar=1 Then Begin

 

MyBaseNumber=BaseNumber*7;

 

DegreeOfAngle[ZeroDegrees,0]=BaseNumber*2;

DegreeOfAngle[FortyFiveDegrees,0]=BaseNumber*3;

DegreeOfAngle[NinetyDegrees,0]=BaseNumber*4;

DegreeOfAngle[OneThirtyFiveDegrees,0]=BaseNumber*5;

DegreeOfAngle[OneEightyDegrees,0]=BaseNumber*6;

DegreeOfAngle[TwoTwentyFiveDegrees,0]=BaseNumber*7;

DegreeOfAngle[TwoSeventyDegrees,0]=BaseNumber*8;

DegreeOfAngle[ThreeFifteenDegrees,0]=BaseNumber*9;

 

Degree=CT_RetAsciiStr(176,1); { The degree symbol number....from my font selection anyway }

 

DegreeOfAngleWord[ZeroDegrees]=" - 0"+Degree;

DegreeOfAngleWord[FortyFiveDegrees]=" - 45"+Degree;

DegreeOfAngleWord[NinetyDegrees]=" - 90"+Degree;

DegreeOfAngleWord[OneThirtyFiveDegrees]=" - 135"+Degree;

DegreeOfAngleWord[OneEightyDegrees]=" - 180"+Degree;

DegreeOfAngleWord[TwoTwentyFiveDegrees]=" - 225"+Degree;

DegreeOfAngleWord[TwoSeventyDegrees]=" - 270"+Degree;

DegreeOfAngleWord[ThreeFifteenDegrees]=" - 315"+Degree;

 

For xLoop = 1 to FullArrayCount Begin

DegreeOfAngle[ZeroDegrees,xLoop]=DegreeOfAngle[ZeroDegrees,(xloop-1)]+DegreeOfAngle[ZeroDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[FortyFiveDegrees,xLoop]=DegreeOfAngle[FortyFiveDegrees,(xloop-1)]+DegreeOfAngle[FortyFiveDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[NinetyDegrees,xLoop]=DegreeOfAngle[NinetyDegrees,(xloop-1)]+DegreeOfAngle[NinetyDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[OneThirtyFiveDegrees,xLoop]=DegreeOfAngle[OneThirtyFiveDegrees,(xloop-1)]+DegreeOfAngle[OneThirtyFiveDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[OneEightyDegrees,xLoop]=DegreeOfAngle[OneEightyDegrees,(xloop-1)]+DegreeOfAngle[OneEightyDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[TwoTwentyFiveDegrees,xLoop]=DegreeOfAngle[TwoTwentyFiveDegrees,(xloop-1)]+DegreeOfAngle[TwoTwentyFiveDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[TwoSeventyDegrees,xLoop]=DegreeOfAngle[TwoSeventyDegrees,(xloop-1)]+DegreeOfAngle[TwoSeventyDegrees,0]+MyBaseNumber+(8*(xLoop-1));

DegreeOfAngle[ThreeFifteenDegrees,xLoop]=DegreeOfAngle[ThreeFifteenDegrees,(xloop-1)]+DegreeOfAngle[ThreeFifteenDegrees,0]+MyBaseNumber+(8*(xLoop-1));

End;

End; { CurrentBar=1 }

 

if DayofWeek(CurrentDate) >= 4 then n=3 else n=6;

 

if DateToJulian(Date) = (DateToJulian(CurrentDate)-n) then begin

if BarType <=1 then begin {intraday minute or tick bars only }

 

if Date <> Date[1] then begin { day changed }

for xLoop = 1 to DegreeSections begin

for counter = 1 to FullArrayCount begin

Value1 = TL_New(Date,0950,DegreeOfAngle[xLoop,Counter],Date,1155,DegreeOfAngle[xLoop,Counter]);

TL_SetColor(Value1,LineColor);

TL_SetStyle(Value1,LineStyle_1to5);

TL_SetSize(Value1,LineWidth_0to6);

TL_SetExtRight(Value1,true);

TL_SetExtLeft(Value1,ExtLeft);

ID = Text_New(CurrentDate,TextPlaceTime,DegreeOfAngle[xLoop,Counter]+ 1 point,NumToStr(DegreeOfAngle[xLoop,Counter],0)+DegreeOfAngleWord[xLoop]);

Value2 = Text_SetColor(ID,TextColor);

end;

end;

end;

end;

end;

[waveslider 10]

OAC (and Kahuna)

 

is there one particular level that you use religiously?

[waveslider 10]

OK I had to post this as an addendum to the last timing chart I posted - -

I still haven't decided whether to use SPY or ES for this. They are different in certain respects, especially timing.

This chart shows that SPY has nearly completed a perfect matching move in price and time:

[waveslider 10]

well you would have had it by the close. There was some weird stuff going on in the last half hour, as I was watching SDS. SDS is the double-inverse ETF for the S&P. It has huge volume because you don't have to borrow it to hedge, so fund managers must use is A LOT instead of the e-mini. There are legal reasons for this.

Anyway, the strange thing was that bid was going over offer quite a bit, indicating that someone was shorting this level big time.

That matching move chart I just put up for SPY is pretty compelling.

[BigKahuna 10]

waveslider,

 

In answer to your question regarding levels I like better than others, with currencies, I tend to use the larger angles: 90,180,270,360 more than the others.

 

As for being arbitrary, support and resistance derived from price action, fibonacci, gann, et al, are a guide(in many cases a very good guide) to frame the markets you trade. Are there times those who can move markets want to take it somewhere your calculated levels are not, absolutely.

 

In the end, we are trying to define the behavior of the human mind. Will any method be 100% accurate in doing such? All you have to do to answer this is to try and figure out what your wife really wants for her birthday but won't tell you. Instead, leaves you to your own devices

 

Now, where did I leave those chicken bones....

[waveslider 10]

I nominate you for post of the day.:)

 

Agree completely with what you said about it being a guide. Money management and wife's birthday most important.

[BigKahuna 10]

I offer this chart up for study. It was drawn a coupla days ago just to illustrate how the above mentioned square root technique can be applied to a market.

 

The es was specifically chosen because it was mentioned in this thread. I do not trade this market how ever. This grid was drawn using the range that is marked on the left had side of the chart and begun at its(ranges) conclusion.

 

fwiw...