Not sure If I've shown this before or not
My friends are NOT traders - they are more position based Investors, I sent this one out to them just before I headed out to the Tour de France and they got in on it because it made sense to them, purely because the stock was at rock bottom prices
They just bought blindly because it made sense - I doubt they have set a stop either!
Let me stage the analysis so it makes sense to you
Markets at some point in their life will base - it could be on any or multiple time-frames
This one was/is on the WEEKLY time-frame, which is perfect for base builder Investors looking to hold for months/years
BASE BUILDING - GOING SIDEWAYS for MONTHS
At some point is WILL breakout and notice the muted decline in March 2025, as the world markets plunged = BULLISH
So with a BASE, we want an idea of the rally potential - the potential as a minimum is that the HEIGHT = the WIDTH
Now I can't draw squares wth this charting software, so I have to draw an approx circle and then refine thereafter - the circle height will be the same length as its width - See we're using part of that high school maths you thought was useless knowledge
Now to avoid scaling issues, I have to create lines on the chart around the circle, as once I rescale the page view on my screen, the size of the circle is going to change and we don't want that, so I simply use a Gann Box to do that
Then I can delete the circle
Now I can either add horizontal lines or I can copy the Gann Box across
By using the Gann Box, I can now if I wish, use the ANGLES of the Gann Box as a trailing stop or whatever - the choice is there
Now if I zoom out to add more price action and time to the chart, I can see prior price history
I can also stack the Gann Boxes on top of each other and see where 2 or 3 times the height of the box lies in terms of price levels, that we might be able to use in the future
It will be Interesting to see the different personalities of my friends with this stock, because, they are all very different people and its going to be interesting seeing who holds the longest and the reasons - 1 of them is already out, he made circa 30% and for him that was enough as he's convinced everything is going to the dogs when war gets stronger, so its a bit of a social experiment for me watching
Obviously, I'm not going to let them loose, I've Insisted they use a hard stop of 100p, as it makes absolutely no sense letting a winning position turn negative, but I can't force them, some will listen to me and some I know will think they can outsmart the game - I'll assist those still in the position with logical stop placement along the way according to their outlooks
You can use whatever analysis methods make sense to YOU
The above concept came to me years ago, I was reading Dr Van Tharps "Trade your way to Financial Freedom" and in that book he referred to a Ken Roberts 123 pattern - That's the same 123 formation I've previously mentioned throughout this thread - anyhow,
I googled Ken Roberts, found his book below and on about page 110 he shows the basing method - I think he wrote the book in the mid 1980's, worth getting hold of