Hand Drawing Charts for the SPI?

[gazelle]

Wayne , Gann used certain geometric squares and custom squares . This is where the balancing of time and price comes into the equation . Gann would look for time and price to come into balance and when these two componets were in harmony we could look for a possible change in trend . Squares were an important part of his analysis and he used several squares for several markets . Looking at the square of 144 , it is a complicated process and you need to ensure that your chart scales ( time and price ) are balanced otherwise the true geometric balance will be skewed . try setting up a 1x 1 angle on the DJIA as I discussed in previous post and you can begin to understand the difficulties , I mainly stick with Commodities and some Indexes as they lend themselves to this particular line of operation . Everything is interconnected when it comes to seasonal time , 360 deg is equivalent to 1440 as there are 1440 mins in a day , 180 deg is equivalent to 720 as there are 720mins in half a day ( See Circle 24 post ) so the square of 144 like other squares needs to be set against the chart . if you assigned an arbritary no like 4c per day you would complete the square in 144 days and be up 576 pts which is not balanced , if you went up 72 pts in time in 72 days you would be 1/2 square in time and 1/2 square in price , if you went up 144 pts in 72 days you would be against the 2 x1 , just because 144 has expired doesnt always constitute a trend change , price could be up 96 pts in 48 days against the 90 deg angle , there are alot of subtle geometric applications just within this square so balancing your co ordinates and setting up your chart properly is very important , hope that helps

 

[Trader Paul]

Re: Data SPI

If you are looking for a change in trend on a particular date, it really shouldn't matter if you are looking at the cash or futs- they turn on the same day. How the bar looks on the chart for that particular day is largely irrelevant for this type of analysis, except for the fine tuning an entry point. I have position traded XJO options in the past without using the SPI chart at all, and it's not been a problem

..... thank you, Professor ..... hats off to you ..... !~! .....

have a great day

paul



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[zenin]

Re: Data SPI

professor_frink yep agree. fine, fine. :

Still think it's worth pointing out the possible problems with a XJO chart to a newbie.

By the way, where has zenin gone. Other than hand drawing charts we aren't even sure what application he was looking at using.

Zenin is still around TH. Just been away from the forum for a little while.

Currently i'm in a demo mode viewing charts for the ASX Mini via IG Markets...any opinions their service (ASX Mini) for a new small time SPI trade?

Is their tick for tick during the course of the day following the real time SPI?

Thanks again Zenin

 

[Trembling Hand]

Re: Data SPI

Currently i'm in a demo mode viewing charts for the ASX Mini via IG Markets...any opinions their service (ASX Mini) for a new small time SPI trade?

Is their tick for tick during the course of the day following the real time SPI?

Thanks again Zenin

The ASX has a mini futures contract that is useless. No one trades it and the spread is miles apart. The IG mini contract is linked to the SPI tick for tick but may be set at a diff price. The the moves are the same.

Don't be sucked in by the "Free" brokerage of these index CFDs. If you are trading the same size as the Futures contract you are much better trading the real market and paying a smaller spread and brokerage, its cheaper. Although there are not a bad place to start if you are trading longer term and learning without risking lots of $$.

CMC has an even smaller contract @ $1 per tick which maybe better than paper trading.

 

[zenin]

Re: Data SPI

The ASX has a mini futures contract that is useless. No one trades it and the spread is miles apart. The IG mini contract is linked to the SPI tick for tick but may be set at a diff price. The the moves are the same.

Don't be sucked in by the "Free" brokerage of these index CFDs. If you are trading the same size as the Futures contract you are much better trading the real market and paying a smaller spread and brokerage, its cheaper. Although there are not a bad place to start if you are trading longer term and learning without risking lots of $$.

CMC has an even smaller contract @ $1 per tick which maybe better than paper trading.

Many Thanks TH!

 

[macca]

Hi all,

I might just add that CMC do have $1 ticks but do not follow the SPI like IG.

They have their own numbers which usually follow the SPI tick for tick in movement but not in price whereas IG forward contracts seem to mimic SFE SPI prices.

City Index is another with $1 ticks and also seem to follow the SPI quite closely.

HTH

 

[Hyerczyk]

Hi Jim,

Regarding "angles"; maybe you can answer the burning question many a Gann doubter has always had.

The question is this: The relationship between the x and y axes on a price chart isn't, and never has as far as I know, been absolute. As trader a and trader b may use different scaling on a particular axis to the other, how can an angle be absolutely measured, without a great whopping handful of discretion, with regards to scale on the x axis?

I've asked this question many times without ever getting an answer. I'm genuinely interested in the solution to this conundrum.

Cheers

Working with the angles takes time and experimentation.

I can offer you this quote from Gann's Master Egg Course as a guideline. As far as I know this is the only time he wrote about Gann angle construction.

This is the only trade that I have ever found where Gann actually pulled the trigger using angles. A lot of his writings in his courses and books are just hypothetical examples of how to use the swing charts.

Gann was working an egg chart. In the article he interchanged ratios and degrees.

"I wired Chicago last night that October Eggs was a sure sale today. The reasons were as follows: Based on the angles on the daily high and low chart, the angle of 4x1 which moves 2 1/2 points per day from the first top at 4760 made December 6, 1943, crossed 5020. The 45 degree angle moving up from the low of 4685 on March 16, 1949, crossed at 5020. The angle of 67 1/2 degrees, which moves up 20 points per day from the low of 4785 on April 18, crossed at 5020 and the angle moving up from 4735 on February 14 crossed at 5005, making 4 important angles coming out at this high point. A sure point for great resistance because the time from the starting of the option was over 6 months. The time from the first important top on December 6, 1948, was close to 5 months and the angle from this top called the top exactly."

Here is the best part and the basis of my experimentation.

"Since receiving 1 letter stating that the contracts for Eggs were changed on February 1 and that 1 point now equals $1.44, I did some experimenting to adjust angles to the money value because that is very important. I wanted to get something that would work to an angle of 11 1/4 degrees and by multiplying 144 x 8 it gave 1152 or $11.52 profit on 8 points. This would give an angle 5x4 or about 39 degrees, moving up at the rate of 8 points per day, instead of the 45 degree angle which moves 10 points per day."

So you can see that in 1948, at least 39 years after he first started trading and 7 years before he died, he was still making adjustments to his angles using the dollar value of 1 point.

The other thing to note is how many markets during his day were based on 8ths. Remember he used the 45 degree angle. 360 degrees divided by 8 = 45. Soybeans, Corn, Wheat and Stocks traded in 8ths also.

I work with the minimum move first then work up. For example 1/32 for bonds, but actually use 4/32. 1/8 for soybeans, corn and wheat but actually 1 cent per day. (I don't have the room for gigantic charts). Silver is 1 cent per day, gold is $1.00 per day. Because I want to fit the data on a workable chart, I scale up to 1, 2, 4, 8, 16 cents per day in Silver and 1, 2, 4, $8.00 per week in Gold.

Stocks posed a problem because I had so much research on 1/8 moves or .125. I now start with .01 then work up in the same way .01, .02, .04, .08.

The best advice I can offer you is to start with the minimum move then work up in a geometric fashion. Something like this:

Daily 1 cent
Weekly 2 cents
Monthly 4 cents.

The hardest markets to determine are Live Cattle, Lean Hogs and Sugar.





I hope this helps you.

Best Wishes,

Jim

 

[Hyerczyk]

Re: Data SPI

..... thank you, Professor ..... hats off to you ..... !~! .....

have a great day

paul



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But as we all know, there is a difference between a top, bottom and change in trend. A change in trend may occur upto 45 days after a top or bottom.

I find a lot of newsletter writers using these terms interchangeably when in fact they are two different terms.

 

[Hyerczyk]

Hello James . Most people do not understand or appreciate the basic geometric principles that are involved in the proper scaling of a Gann chart . I am embarrased to say that I havent read your book in its entirety but I hope to get hold of it soon and study it . Do you still keep hand drawn chrts or do you print and scale your trades through Gann Trader . for me this is a reasonable compromise and allows me to do most things properly .

I use Ganntrader to make the chart then fill it in. I also have blank chart paper.

Geometric angles can be hard to explain if you go in that direction. I read a lot of math articles and it seems new things are being discovered everyday.

 

[Hyerczyk]

Early in my career I used to waste a lot of time trying to defend technical analysis and Gann. Mostly because being in Chicago, the floor traders thought they were gods. It wasn't until I was able to show them what their average win was and how they only made money because of the edge, that many of them realized they weren't the great trader they thought they were.
My favorite trick was to show these traders that at $7.00 a trade, most of them were losers. Many of them never learned why they made money. The failure rate from the floor to the electronic platform is staggering.

Even in the Gann community I still find people attacking others.

It's almost like a religion to some.

I find this Aussie group friendly and knowledgeable.

Just to let you know where I come from, I have no ego when it comes to Gann analysis and trading. I am constantly trying to get better. This is why I get up at 1 am to go to the Aussie stock forum. My wife and 3 daughters make sure that my ego stays checked.

As a trader and analyst I welcome all comments and criticisms. I usually try to stick with facts that I have verified. I think I have survived in this business because of one rule I try to follow:

1. I am as good as my last trade.

Gann analysis is just a tool for me. It's what gives me my edge.

The way I look at it I'm somewhere between a guy who digs ditches all day then makes Gann charts at night and a professional who has access to order flow. I'm better than the latter, but can't beat the guy holding the cards.

When I trade, I let the charts take me to the zones where I anticipate activity, but actually pull the trigger when I see the order flow at this zone and have a lean.

I've learned this in 26 years, the markets trade toward size not Gann angles, moving averages, etc., etc. So when there is size on the bid in my zone, I buy. I've seen Gann traders get killed just putting an order where a Gann angle is suppose to be. Just like I've seen Elliott wave traders get killed putting an order on a Fib number.

Look at how many times an angle or Fib number has been penetrated, then regained. The novice Gann trader puts an order in ahead of time without knowing the order flow at the angle. The professional reads the order flow at the angle. If Level II shows that there are 1000 shares bid on the Gann angle at $50.00 and 10,000 shares at $49.75. Guess what, the angle won't hold.

As a professional I work my order this way. Size has to be there because I am not big enough to stop the market. If I miss the bottom so what. I can always get in when the market regains the angle.

Anyway, this is how I trade. When I analyze to set up the trade, I throw everything I can into finding out where, when and why the market may go to a certain point, then wait for my lean to show up. If size doesn't come in, then I won't trade it. My charts look like maps of latitude and longitude. I want something to happen in the box I have created. That something is order flow. As I said before, time and sales prints the chart, not the other way around.

I guess you can say that I analyze to find entry zones, but I only enter when I know my out. If I can't find an out, I don't get in. Take a look at how many entry signals people have versus their exits. Most poor traders have sloppy exits.

Gotta start my work now. Talk to you soon.

Good Trading,

Jim




The best thing I ever learned is that time and sales print the chart.

 

[Hyerczyk]

Hi Jim

Welcome to Aussie Stock Forums!

Thanks for taking time to explain your field of study to us, it's always encouraging to have interesting traders here on ASF. I'm glad to hear that you try to keep your analysis and forecasts simple rather than making it too complex.

Excuse me for asking, but how should we pronounce your surname?

fwiw, I too am interested in your reply to Wayne's question about angles. There are a couple of Gann based traders here on ASF- Trader Paul and Magdoran. I don't know which school of Gann they subscribe to exactly but you may have some things in common.

My surname is pronounced as Higher-Check.

 

[gazelle]

Thanks James . Very interesting , Establishing a geometric balance between time and price co ordinates can be a tricky excercise depending on what instrument is being charted . I use 12 grids to the inch chart paper , Having spent some time with Ganntrader ( which is a very comprehensive programme ) I decided to go back to hand scaled charts on 12 grid charting paper . on a monthly chart the scale might move up 12.00 in 12 months or 1.00 per month so if we have a major low at 360.00 on January 1st 2000 our 45 deg angle would be at 372.00 on the 1st January 2001 . for a 90 deg angle we would double the price scale so on the 1st January 2001 price would be 384.00 and against the 2x1 angle . Initially I did have some difficulty scaling my squares against the chart because it was 8 grids to the inch which isnt calibrated to suit square 144 or square 52 . There can a fair degree of subjectivity in scaling a chart and Gann trader is calibrated at 2 4 8 16 32 64 price divisors which provide the user with a scaling alternative depending on what they are charting so determining a true scale between time and price can be difficult . Gann said 1 point or 1.00 per time unit is a good measure and if we look at this in more detail over different time scales the results are interesting . Starting with a yearly chart lets say we do an excercise .

Stock XYZ
FTD Jan 1st 1950
List price 100.00
1.00 per year scale
Running out 58 years to 2008 the 45 deg angle would be at 158.00
The 90 deg angle would be at 216.00 in 2008

Monthly Angle
1.00 per month scale
Runing out 696 mths ( 58 years ) the 45 deg angle would be at 796.00
The 90 deg angle would be at 1492

If we assigned 1.00 per week the outcome would differ greatly as there are 3016 weeks in 58 years so just working with the monthly and yearly time periods provide us with a few angles to work with . Sometimes the trend will turn on angles but time is the most important factor . alot of people do get blinded by angles especially on computer charts and miss the big picture .

Regards Gazelle