The Square of Nine

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Old May 27, 2009, 5:30pm   #1
 
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The Square of Nine

This thread is the discussion of the number chart that has come to be know as "The Square of Nine" over the years.

The reason it has come to be know as the square of nine is because when the number one is put in the center square, and then the number two starts the next row of squares the last number on the second row is the number nine.
The number ten starts the third row.
As far as I know Gann never called this particular number wheel the square of nine.
He did call the true square of nine, the square of nine though.
That would be 9X9. Or nine rows of nine numbers for a total of 81 numbers.

There is more than one number wheel that Gann used in his trading.
He used them all in the same way for the most part. It's just that the different charts work for different markets.
The number of sides on the chart plays a part in how the numbers fall when compared to a 360 degree circle around the outside of the chart.
He used three, four, five, six, and eight sided charts from what I can tell.
He also used a "true" circle chart that only had one side so to speak. The solid line of the circle.

So to be truthful, all the hype around the "square of nine" number wheel should be spread around to all of the number wheels. That will come later. For now we will look at only the four sided number wheel.
From this point on I will refer to that chart as Sq9.
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Old May 27, 2009, 5:45pm   #2
 
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Old May 27, 2009, 5:54pm   #3
 
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hwsteele started this thread The first thing that should be know about the Sq9 is the fact that it is a square root calculator.
The most popular way of using the Sq9 is to find the number that what ever market your looking at's price matches on the chart and then moving around the chart by 90 degree increments to get support and resistance levels.
When you do this you are really just using the square root of the price and then adding or subtracting .5 to or from it then squaring the new number, and using that as your level.

Let me explain.
Look at the chart uploaded.
Let's look for any number on the chart.
We will use the number 75 cause that's the year I was born, but you can do this with any number on the chart.
Get a calculator and find the square root of 75.
It is: 8.66
Now add the number "2" to 8.66.
We now have the number 10.66.
Square that number. (Multiply it by it's self.)
That number is 113.64, or rounded to the nearest whole number is 114.
Now look at the Sq9 again and you will see that the number right next to 75 on the next row out is 114.
Now let's take the number 8.66 and add just "1" to it to get 9.66, or 93 rounded to the nearest whole number.
If you look 180 degrees around the chart from 75 you will see that it's the number 93.
So to go 90 degrees around the chart you are taking the square root of what ever number it is and adding or subtracting .5 to that square root.
Take any number on the wheel and find the square root then add 2 and square that number, and you will get the number right next to the first number but one row out.
Take away 2 from the square root and square that number you will get the number right next to the first but on the next row in.



That means when looking at a price chart all you have to do is take the square root of a pivot in price and add or subtract .25, or .5, or 1 to or from the number, and square the new number to get support or resistance levels. The same ones you would get from the Sq9 chart by moving around the chart 45, or 90, or 180 degrees.
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Old May 27, 2009, 7:08pm   #4
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Quote:
Originally Posted by hwsteele View Post
The first thing that should be know about the Sq9 is the fact that it is a square root calculator.
The most popular way of using the Sq9 is to find the number that what ever market your looking at's price matches on the chart and then moving around the chart by 90 degree increments to get support and resistance levels.
When you do this you are really just using the square root of the price and then adding or subtracting .5 to or from it then squaring the new number, and using that as your level.

Let me explain.
Look at the chart uploaded.
Let's look for any number on the chart.
We will use the number 75 cause that's the year I was born, but you can do this with any number on the chart.
Get a calculator and find the square root of 75.
It is: 8.66
Now add the number "2" to 8.66.
We now have the number 10.66.
Square that number. (Multiply it by it's self.)
That number is 113.64, or rounded to the nearest whole number is 114.
Now look at the Sq9 again and you will see that the number right next to 75 on the next row out is 114.
Now let's take the number 8.66 and add just "1" to it to get 9.66, or 93 rounded to the nearest whole number.
If you look 180 degrees around the chart from 75 you will see that it's the number 93.
So to go 90 degrees around the chart you are taking the square root of what ever number it is and adding or subtracting .5 to that square root.
Take any number on the wheel and find the square root then add 2 and square that number, and you will get the number right next to the first number but one row out.
Take away 2 from the square root and square that number you will get the number right next to the first but on the next row in.



That means when looking at a price chart all you have to do is take the square root of a pivot in price and add or subtract .25, or .5, or 1 to or from the number, and square the new number to get support or resistance levels. The same ones you would get from the Sq9 chart by moving around the chart 45, or 90, or 180 degrees.
Sounds interesting, have to get my head around it. Have to do some background reading so that I can understand the concept well enough to be confident to use it in tradring. Thanks for pointing to this one, very interesting.
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Old May 28, 2009, 12:12am   #5
 
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hwsteele started this thread For the most part when I work with the Sq9 I use a smaller chart that only goes up to the number 361.
I will explain why I do this in a later post.

Any time the number I have to work with is bigger than what the chart has I move the decimal place so the number fits.
For instance if I'm working with the SPX instead of the number 900 I would use the number 90.
If I were working with a stock that was trading at say, $2.11 I would call it 211 on the wheel.
The above should be easy enough to understand.
One of the reasons I do this is that I'm not looking for an exact number but more of a range. If I use 90 on the smaller chart I am actually working with a ten point range. From 895 to 905.

There is also another way to make prices fit.
An example would be if the market is trading at 900 then you use 801 as the center square and then the number 100 on the chart would actually be the number 900.
Seems like this second one wouldn't work but believe me it does.

Now keep in mind the fact that the Sq9 is a great tool, but it's not the holy grail.
Look at the first chart attached to this post.
It's the SPX. I took 667 as the low and found the square root. Each line up on the chart is the square root of 667 with .5 added to the number. As in the second line is 1 added to the square root and the third line is 1.5 added to the square root.
Not perfect but a nice frame work for looking at the market.

The second chart is from moving the decimal point so the low of 667 turns into the number 67 an the chart. Each new line on the SPX price/Time chart is 45 degrees up on the Sq9 chart from the number 67.
Again, not perfect but a nice frame work.

The third chart is again the SPX with the 667 low. This time we take the number 6 off the front to leave the number 67. We start at that point on the Sq9. Each line up on the third price/Time chart of the SPX is one full circle around the wheel. Nice frame work from the method that you would think shouldn't work.
The number 67 is really 667. The next number out on the Sq9 is 104 which is really 804. On and on like this 'til we get to our highest number of 332 or 932 on the SPX chart.
Off by less than two points not that bad.


More tomorrow.
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Old May 29, 2009, 4:22am   #6
 
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hwsteele started this thread Today I saw a thread with some one talking about the S&P500 going all over the place and taking him out of trades cause his system didn't like it.
Some thing like that any way. So i decided to show a way to use the Sq9 for a price time combo. The only problem is the S&P500 or SPX, which is what I like playing with, does not really use the four sided Gann number wheel. The HEXAGON number wheel is the correct one to use for that market.

SO

I will be introducing that chart in this post and from this point on calling it the Hx chart.
The Hx chart gets it's name from the fact that it has SIX sides.
The first row of numbers goes to 6.
The second row of numbers goes to 18.
The third row goes to 36 and so on.
Each row has six more numbers in it than the last.

Now keep in mind you use the Gann number wheels the same regardless of how many sides it has.
The first picture is that of the HEXAGON number wheel I got off the internet. Sorry it wasn't a better picture but this chart is MUCH less famous than the Sq9.
The one I use is an actual hand held chart and I don't have a scanner so I couldn't show you that one.

Now with the four sided chart (Sq9) you go around it in 90 degree increments.
BUT
With the six sided chart you go around in 60 Degree increments.
If you think long and hard you will most likely be able to figure out why that is.

The methods that I show you today you can use on any of the number wheels, but because the S&P500 uses the Hx chart we will be working with that.
You may be asking your self right now "how do I know which chart to use on which market". The answers to that is: All of the charts can be used on all markets BUT each market will work best with just one of the charts.
If you remember the Gann interview from 1909 he said something along the lines of each market/stock has it's own vibration.
Now you can understand what he was talking about just a little bit more.

The second picture is the SPX five minute chart for today. 5-28-09.
The first thing we are going to do is use the market to help us draw in support and resistance lines.
First we let the market open and then wait for two full candles to form, or ten minutes.
We see that the high of the first candle of the day is the high so far at about 903.
That first candle made a pivot as the market moved down in the next candle, so that is the number we will be working with ALL DAY LONG.
Now you break out the Hx chart and turn the number 903 into 103. You then find that number on the chart. Moving around the wheel 60 degrees at a time you get the following number going down:
97
91
86
Going up you get these numbers:
109
115
121

So now these numbers are turned into:
886
891
897
903
909
915
921
We put these levels on todays five minute chart. I put them on with Black lines.
We now have the support and resistance lines for today.
If the market is not moving much use every 30 degrees around the chart for your levels.
If the market moves like a bat out of hell then use every 120 degrees.
Or you can use them all if you like.
Look at the chart again and notice what happens half way from each level to the next.
If we had put lines on this chart from every 30 degrees it would have caught almost every level the market stopped at today.

Ok now we are going to use the chart to time the market.
The first thing we need to do is wait for the first and second price pivot to happen.
The first pivot came from the first candle and then the second came 8 candles later.
Plus it took about 5 more candles after the first eight to know for sure that the first swing was 8 candles long.

As a quick note... if you were watching price action also, like you should be, you would have seen the nice tail on the 8th candle (really the 9th candle of the day as we don't count the first candle of a swing as one, but 0 instead.)
then the next candle was an inside candle.
PLUS the price was at one of our minor 30 degree price levels.

Ok so now we have the number 8 to work with.
The first swing is done and it took eight candles.
Find the number 8 on the Hx chart.
Now counting from the 8th candle of the last swing (because it's the first candle of the second) we count out eight more candles.
I have circled the candle that the second 8 count lands on.

Notice that this candle's top is right where the middle 30 degrees would have been again. Now we know for sure we should have added the 30 degree lines to the chart.
That candle is a spinning top so we watch for a reversal.
It is a pivot, but not a big one and it is not a reversal.
(Something that I will explain in the new timing forum when it gets started is the fact that not all pivots are reversals.)

Ok back to the Hx chart.
We have the number 8. Now go half way around the chart (180 degrees) and find that number.
The number is 14. That means we keep counting from the circled candle like this:
Circled candle is number 8.
The next candle is number 9, and so on.
I have marked the 14th candle and the chart with an arrow.
This candle should be a pivot. Hopefully a turn also. (remember MOST pivots are turns but not all of them)
Now look at that candle. It touches one of our 60 degree price level lines and has a nice tail. Looks to me like the market is going to go up a little more.

Now lets go half way around the Hx chart again. This time we find the number 21.
We keep counting like we did before.
I have market the 21st candle with an arrow also.
Ok, this pivot should be good because we are back up at the price we started the day at.
Which means we are at one of our 60 degree levels. Also it's one of our 30 degree levels because it's where we started on the Hx chart. We also have a nice tail. The market is telling us it wans to go down.

Again 180 degrees around the wheel to find the number 30.
I have market that with an arrow again.
The 30th candle looks like it's a loser, but it's not.
I'm not going to tell you why right now cause I am going to do so in the timing forum.
I will even use this chart to help explain when the TIME ( ) comes.

Again 180 degrees and the number 40 comes up.
Is it a dud?

The next number is 52.

You get the idea.
There is an arrow with out a number by it. It's there for a reason. Once you figure out why it's there let me know. It's not hard.


Ok that's todays lesson.

P.S.
Here is your home work.
Well besides figuring out what the numberless arrow is doing there.
What happens when you keep counting from the first pivot?
Instead of counting out a second eight after the first keep counting to the numbers 14, 21, 30, and so on.
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Last edited by hwsteele; May 29, 2009 at 11:04pm.
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Old May 29, 2009, 11:16pm   #7
 
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hwsteele started this thread Today will be a MUCH shorter post.

I have loaded a chart of the SPX today (5-29-09).
The chart has 30 degree support and resistance lines and time counts all from the Hx chart.

Note two things about this chart.

1:
I showed two methods in the last post for counting time with the Hx chart.
The first one I spent all the time on, and then the second I talked about very quickly in the post script.
I personally like one better than the other. If you look at today's chart you should be able to figure out which one.

2:
In the last post I asked about the arrow that didn't have a number.
If you look at how I did my timing on todays chart you should be able to figure out why that arrow was there.



I'm not going to talk about todays chart because you need to look for your self and see what you can find.

Remember to follow ideas you get 'til you can prove or disprove them to your self.
That's always the point to my posts here is to give you some information and then get you to think about it. Not just "oh that's cool" and you never look at it a different way, but hopefully you will get all kinds of crazy ideas to test.
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Old Jun 3, 2009, 4:45am   #8
 
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hwsteele started this thread Ok, this next lesson you will have to pull up your own chart for oil for the last year, and the Sq9 that goes up to 361.
This method is a timing method you can use with the Sq9 on some markets.
You will have to do your own work to find them.

On my chart light crude topped out at 147.30 on July 11th.
The next major low after that was September 16th at around 90.
First we need to count the number of days from those two dates.
I get 67 days.
Now look at the Sq9 chart and find the number 67 on it.
Look at the number right next to it one row out.
104
Now keeping our count as starting from July 11th add the difference in days between 104 and 67.
In other words add 37 days to September 16th.
That comes out to October 23.
Then look at the number one more row out.
149
Take 104 from 149 to get 45 days from October 23.
December 7th.
Keep doing this and you will discover that all of the dates you get worked out quite well.
Also, as a test early on you could look at the 67 days that it took to make that first major low and look back on the Sq9.
In other words look one row in.
That number is 38.
Test to see if 38 days from the July top something happened in the market.
If it did then you would have had conformation back around the september low that all of the future dates would also turn out well.

This method is very close to the other timing method used on the SPX with the six sided number wheel.
If you can't get the Sq9 to work like this on a market try the Hx chart.
One or the other should fit most markets.
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