Secrets

Gann liked to code some of his understanding in the things that he wrote.
I have done that in the past on MANY of the posts I have made and I would venture to say that all have not understood, or for that matter, care to understand what was encoded.
There have been a few people who have been helped by a small amount of what I have posted but I'm guessing that it was almost all surface level subjects. I did have two folks who would pick apart some of my posts, but they are not members of the forum they simply troll around T2W at times. It was a fun game to play with them and they did a good job at uncovering most of what was in the posts. The really good stuff was encoded in a combination of more than one post.

Some of the good stuff was laid out in the open in some threads but most was not. And as I have said before most people simply don't care about the esoteric methods that I employ to forecast the markets. [SIZE=+0]Their paradigm will simply not let them believe that the methods would be a help, or they simply are not interested.[/SIZE]

[SIZE=+0]After a nice ego check initiated by my lovely girlfriend Gigi...[/SIZE]






[SIZE=+0] [/SIZE]
[SIZE=+0](Just in case you can't figure it out Gigi is the good looking one on the right.)[/SIZE]


[SIZE=+0]I decided to simply explain as much as I can about all the Esoteric stuff I have learned in this thread. :-0[/SIZE]
[SIZE=+0]Or maybe I should say: [/SIZE]

[SIZE=+0]So if the following stuff interests or helps you in anyway then God bless and good luck with it. If not then please pass on this thread as to keep the negative out.[/SIZE]

Jenkins and Mr Bill here is my last code:
:48
:58
1:11
1:20
1:40
1:50
2:03
2:32
2:40
And so on...

OneRepublic - Secrets - YouTube

To start with I will talk about some things that are not really big secrets but may not be in the main-stream so to speak.
I will also be doing most everything, at least in the first few weeks/months, with free charts. Doing this will show you that you don't have to have $100.00+ a month charting package to do this kind of stuff.
But keep in mind that using the free stuff (mostly MT4 to start) will take extra time and effort that the high dollar stuff can do in a few clicks. WAVE59 is nice, but $$$$.

Subscribed.

FYI, for anyone interested or those who don't like Metatrader, Netdania has some decent free java web browser charts with real time pricing.

Forex Charts | Currency Charts - free

Peter

wackypete2 said:

Subscribed.

FYI, for anyone interested or those who don't like Metatrader, Netdania has some decent free java web browser charts with real time pricing.

Forex Charts | Currency Charts - free

Peter

Click to expand...

Thanks for the info I'm sure it will help any who may be interested in testing some stuff.

The first thing to talk about is the chart.
When you are going to use the chart and draw lines on it (this will be the method talked about first) you need to scale your chart correctly.
When Gann would draw his charts he would scale them so that 1 day would equal 1 point. Or he might have used 1 week to equal 1 point. Or even 1 month, year, or more would be equal to a point.

The reason he did that was so that the price would be able to be "converted" to time, or the time to price. In other words the "X" and "Y" axes of the price/time chart were equal. If the axes were not truly equal then they were related by simple harmonic conversion. An example would be multiplying by 2,3,4,or 8.

Now the first charting software that I will be using will be MT4. The only problem with MT4 is that it does not come with an automatic chart scaling converter.
By default the charts resize them selves to fit all price data currently displayed on the chart. This can render your drawing on the chart of little value in many cases.

The good news is that you can manually set the charts up to scale.
The way to do this is to right click on the chart and click on "properties", or you can push F8.
After you do that then you click on the "common" tab.
On the bottom left hand side you can click in a box marked "scale fix".
Then you can set the highest price on the chart along with the lowest.
Doing this will keep the charts top and bottom the same amount of price from each other no matter how much you move the chart. Well that's almost true. There tends to be a very small amount a slippage at times but this is negligible and should not be worried about.

The second part to scale your charts with MT4 happens by sizing you charts hight as exactly as you can to the background grid. For instance I sized the charts I will be showing as examples in this thread to 25 boxes from top to bottom. I forget how big my monitor is 28 or 29 inches so if yours is smaller you will most likely not get as many as I have.

The third part is to set the zoom level and leave it alone. I have the chart I will be using as the next few examples set to 2 bars per square.

Now this may seem like a lot of work but the scale of the chart is important. Very important. There may be some EA some place that you can download and load into MT4 but I want to give you the most basic way to do this.

Interesting. Subscribed.

Now that I have posted a quick bit of scaling info concerning MT4 I will start with some basic information.

The following should be part of everyone's basic understanding of price movement:

Price can do one of three things. It can trend up. It can trend down. It can trend sideways.

There are different ways to do all three (basically we are talking the amount of momentum involved). We can have strong moves and weak ones but the three general categories stand.

This is good information to know.

The following is but one example of how to use this information:

Let's say you have a timing method that gives accurate signals 90% of the time.
The thing is, what is "timed", is a change in market sentiment. In other words the market will change from what ever it is doing currently to any one of the other two things that are left from our three possibilities.
If the market is trending up then the timing method would show when the market could turn down or simply start going sideways.
If the market is going sideways then it could start trending up OR down at the forecasted point in time.

This is one of the big reasons why market timing can have a bad name. People think that you should be timing only tops and bottoms. That would be the case if the market never moved sideways but we all know that it does, a lot.
The fact of the matter is most timing methods isolate a cycle that is active in the market. The thing is there are more than just one cycle active in the market at any one given time. So while the cycle we are measuring may be cresting or ebbing other cycles can compensate in the other direction and cause the market to behave in ways other than expected. But now I am getting ahead of my self.
We will talk more in depth about cycles in the next post or two.

Back to the example I was giving.
Armed with the information that the 90% accurate timing method can time a market change to any one of the three states of market price movement we could use it like this.
If the market is trending up when we get a time signal the market will either move down or sideways 90% of the time. So in this instance we know if we short the market 90% of the time we will either make money or basically break even.
The same goes for the market trending down when we get a time signal.
Now if the market is moving sideways and we get a time signal then 90% of the time we will either make money by getting the trade direction correct, or lose money and get stopped out by getting the trade direction wrong.
So with no other factors used we SHOULD come to the conclusion that we should only take a trade if the market was trending when the time signal showed up.
The reason being 90% of the time we will make money by countering the trend or at least break even(or come close or make just a little) due to the market going the other way or sideways.

More later...

Eminently sensible. More pls.

Before I make a post about simple cycle understanding I want to expand on the idea that the market can only do three things. By expand I mean contract.

The three things that the market can do falls into two different categories.
1: Trending
2: Consolidating

Because of the fact that any market's price over time either trends or consolidates the possibility of a "Holy Grail" simply does not exist.

Why you may ask?

Ever have a system that made you great money and the all of the sudden stopped working and lost you money just as fast?

Was the "trend your friend" while the market was trending and then your trend following rules killed your account?

The reason is very simple...
To make money in a trending market you need to trade IN the direction of the trend. If you trade reversals then you will lose your trades.

BUT

When a market is in a consolidating faze you need to trade reversals or in other words AGAINST the trend to make money.

This is why both types of systems (trend following and reversal) work, just not at the same time.

Think about it for a while

More to come...

The next few posts will be about cycles.

When making forecasts in time in the markets with lines on your charts you are really closing in on a single cycle (most of the time) and measuring when it should crest or ebb again.

The issue with this comes from the fact that there are always more than one cycle moving through the markets at any given time.
Below is a screen shot of a composite cycle I created with Excel.













This is only an example and was not taken from the real price or cycles of any market.

The first top and Bottom are nice and to the point. The second top is a triple top, while the second bottom is a double bottom.

Now you might expect a time forecasting method to be able to pick the tops and bottom of the first two with out a problem, and then the second top and bottom might be a bit harder. You might think that the time forecast should land on one of the three tops or two bottom, or maybe right in the middle of the big move up or down.

Just looking at the composite chart would make a good case for what I just wrote right? After all, it is quite obvious that there is one big cycle and a few smaller ones at work here. Right?

Take a look at the four cycles that I used to make the chart in the last post...




















That's right I used only four cycles and two of them were big while two of them were smaller ones.
Take a look at the two big cycles. Notice how one is longer while the other is taller. The blue cycle has more amplitude and a greater frequency.
The Yellow is a more "relaxed" cycle. It is responsible for less amplitude and is slower, or has a lower frequency.

At this point in the chart the two cycles are overlapping for the most part so they "look" like one cycle in the composite. Remember that real price action is always a composite of more than one cycle.

When we overlap the four cycles AND the composite whe get this picture...


















There are several things to take note of here.

First, please note how the amplitude of the composite cycle decreases as the two larger cycles start to fall out of sync.

Second, Note how the smaller cycles were creating the "elliott" style pullbacks on the way up the first big top in the composite, but mostly lined up at the top to create a nice "sharp" top. For the second big top in the composite the smaller cycles lined up for the second half of the move up. As a result the move was very fast. Then at the top the cycles were spreading apart again and resulted in a sideways triple top. This was also do, in part, to the fact that the two larger cycles were starting to fall out of sync.




Now remember how I said that when you use lines on a chart to forecast a change in market you are basically measuring a single cycle?
Here is a picture with some markers on it to show where the forecasts would have landed...







You see how some of them look really good and other not quite as good?

You notice how the first blue top was a little "off" while the second top was a nice hit?
Also take note of the fact that the yellow cycle was a closer match than the blue on the first top but then was off the mark more for the other top and both bottoms?
Did you also notice how the yellow tops were both off by the same amount?
As were both the yellow bottoms?

More to come...

It might be just me, but there's no charts showing. It all sounds very interesting, but i've just got blank spaces where the charts should be.

Maybe it's all a joke.....

Now i'm just confused - normal service has resumed then!

Sorry, the charts are not printing.

it's ok for me - wonder if it's another ie vs firefox vs chrome thing - i'm using chrome

HW - you're probably better off attaching your charts as thumbnails.

jon

no charts here either using latest version internet explorer.

G/L

I'm using Chrome. No charts here either.
He's using .png files
Wasn't there some issue about them not being very t2w friendly after the upgrade or am i thinking of something else?

Peter

here's the url for one of the charts. It doesn't show up in a separate tab either. Is this even a proper url? looks like he has the wrong directory.

http://www.trade2win.com/boards/members/14025-hwsteele-albums-stuff-picture2540-chart-three.png

Peter

I'm still seeing mine ok - wonder if ddobs, splt and bbmac right click on the blank spaces they'll get the url?

Is that what you did wacky?

wackypete2 said:

here's the url for one of the charts. It doesn't show up in a separate tab either. Is this even a proper url? looks like he has the wrong directory.

http://www.trade2win.com/boards/members/14025-hwsteele-albums-stuff-picture2540-chart-three.png

Peter

Click to expand...

i think you're right, they don't exist, at least where the address points to. maybe hw removed the album directory and pics?

here's where the address is pointing, but there's no directory for "stuff" http://www.trade2win.com/boards/members/14025-hwsteele-albums.html

barjon said:

I'm still seeing mine ok - wonder if ddobs, splt and bbmac right click on the blank spaces they'll get the url?

Is that what you did wacky?

Click to expand...

I tried that first but nothing was there at all so I looked at the HTML code for the page and searched it to find the pic urls.

Peter