The tool that I am calling secret number 1 is a simple way to project a market type change. As I have said before it is not perfect and the longer you work with it the better you can become at using it. It is more of a general area in time that it points to, but can be very accurate at pin pointing the market change.
I wouldn't trade with just this but it can be used as a "heads up" to give you a time area to pay closer attention to.
Here is the first example that I used before again...
Notice the fact that after the second high, but before the forecasted point in time, the market closed for the weekend. The market close CAN cause the results to be less than they would be other wise. If the close is involved It seems to work better when the highs or lows that you are using to make the forecast do not have a close between them.
Ok, now to give some other info...
This last chart has a forecast from the very next market change. It is from bottom to bottom. It also has a market close involved (although it is the less "harmful" of the two ways).
Notice how close the two bottoms are to each other. This is ok as long as the bottoms/tops are easy to spot. That means there is some real cyclical "stuff" going on there.
Also, notice how the time forecasted lands right about the place the market starts to trend again.
One last thing I would like to talk about from this chart is the red and blue bar that have the same bottom in price at point "0". The question here is which bar to use to make the forecast from. I have found that it TENDS to work better if you use the most recent bar in time with the first point (0). That would be the bar on the right.
If there where three bars there with the same bottom and no other clear indication of which to use then the middle of the three TENDS to work well.
With MT4 you can't place the starting "click" of the tool in the middle of two bars.
If you could that would be the best place to use in a situation like the one above.
There the market clearly closes at the low and opened at the low, and that indicates to me that the area between the two is the place to start from.
This next chart has more new things to talk about...
The big thing to learn from this chart is that it is just fine to use a bottom more than once. On this chart secret 1 is started from the same low but this time a more pronounced and obvious second low is used. Looking at the first examples (second) low you can see that it is not the most beautiful looking low. You may have missed it, or simply decided not to use it, and it would have been ok.
Two things to notice are:
1 The weekend close is in the middle of the first and second point in time for setting up the tool. Not the best thing to have, but I did it any way to show how that might work out.
2 The low that I picked was hit twice almost perfectly with two consecutive bars. I used the opposite of what I did last time because the bars are not the same. Here the bar did not make a low and close at that point, it made the low and then moved back up. In the very next bar the market moved back down before moving up strongly. The first bar also had a slightly lower low, so these two things together gave me reason enough to use the first bar over the second.
The results were not the greatest as the 1.414 forecast time market the "top" of a sideways market.
Here is the last chart for this post...
Here instead of having a low in between the two lows I use the two consecutive lows. This almost always works the best. As you can see from the chart we still have the weekend in the least desirable place but the forecast time area worked out very well still. It pin pointed the next big low.
BUT
From a trading standpoint this may have been a hard trade.
Was it the end of a sideways move?
Was it a smaller top?
Was it the Bottom that in hind sight we clearly see?
