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 .
Hand Drawing Charts for the SPI?
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wayneL
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I would say that's because nobody is willing, or able to explain it.
It seems a simple question on the face of it (but more complex when lognormal characteristics of markets are considered) but nobody will ever answer.
WTF?
Its not an easy one to answer and if you break it down it gets even more complicated . If we take XYZ as an example on the 22nd April 2007 it was trading at 180.00 we can construct either a trading or calender day angle and in some cases Gann kept both . XYZ has travelled 365 calender days in time so price would be balanced against the 45 deg line at 545 .
A trading day angle would travel 262 days and price would be balanced against the 45 deg line at 442 so depending on which application is used the results will differ . The primary componet is time and this has several dimensions depending on which timing componet you are using in your analysis Civil or Plannetary and as we know Gann used both . Geometric angles provide you with a directional gauge on how strong the prevailing trend is in relation to its harmonic angle . There are several angles that can be constructed . A 45 deg angle is 1 pt per day whist a 22.5 deg angle is 1 pt per 2 days and can used a measuring stick to gauge how much further a falling mkt has to go but just because price hits a particular angle doesnt always constitute a change of trend . There are other factors involved although the angles do offer some clues .
When you have an instrument like an index trading at 10,000pts true geometric scaling cannot be achieved because the average trading range on any given day might be 100 - 200 pts so setting a 45 deg angle against such an instrument would be impracticle and pointless . There are 8 16 and 32 pt divisors that some people use to balance time and price but this opens up a line of subjectivity as anyone can assign a value to one point per day .
If we assign 16 points to one day . will finish this later got to go out
A trading day angle would travel 262 days and price would be balanced against the 45 deg line at 442 so depending on which application is used the results will differ . The primary componet is time and this has several dimensions depending on which timing componet you are using in your analysis Civil or Plannetary and as we know Gann used both . Geometric angles provide you with a directional gauge on how strong the prevailing trend is in relation to its harmonic angle . There are several angles that can be constructed . A 45 deg angle is 1 pt per day whist a 22.5 deg angle is 1 pt per 2 days and can used a measuring stick to gauge how much further a falling mkt has to go but just because price hits a particular angle doesnt always constitute a change of trend . There are other factors involved although the angles do offer some clues .
When you have an instrument like an index trading at 10,000pts true geometric scaling cannot be achieved because the average trading range on any given day might be 100 - 200 pts so setting a 45 deg angle against such an instrument would be impracticle and pointless . There are 8 16 and 32 pt divisors that some people use to balance time and price but this opens up a line of subjectivity as anyone can assign a value to one point per day .
If we assign 16 points to one day . will finish this later got to go out
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Re: Data SPI
Hi TH,
Whoa, whoa ..... slow down and stay on your bike .....
Most Gann traders would agree that TIME is the most important factor
and as we are talking specifically about EOD charts here, charting and
analyzing XJO gives us a clearer picture of TIME cycle analysis, in the
underlying market .....
..... and ultimately, that is what drives the SPI ... !~!
In fact, if we do not consider XJO as part of our SPI trading, then we are
also missing out on another important indicator, that being the premium or
discount, that the SPI is trading to XJO.
Realistically, we are dealing with TWO levels of sentiment, DAILY
..... one generated by the whole market and reflected in XJO and the other
is "intraday noise" generated by interest in the SPI itself ..... this is what
produces the spikes, as well as the discount and premiums to XJO .....
..... AND any trader who has traded the SPI overnight, also knows that
the overnight market is chiefly influenced, by a THIRD level of sentiment,
which is the DOW ..... and some of the volume at the open and close of
the day session is overnight traders opening and closing positions.
So, reliance on SPI data, as the sole means of trading that market, means
that we have disregarded the primary driver, XJO ... and without XJO,
there would be NO SPI ..... !~!
Analysis of the TIME AXIS on the XJO chart is of utmost importance for
position traders in the SPI ..... the trades may be less frequent, but if
the timing is right, then the rewards speak for themselves ..... and the
stress level for traders is much less than being glued to a monitor all day,
trying to scalp a few points out of intraday moves .....
..... but, to be effective in position trading the SPI, MARKET TIMING is very important.
have a great day
paul
=====
Hi TH,
Whoa, whoa ..... slow down and stay on your bike .....
Most Gann traders would agree that TIME is the most important factor
and as we are talking specifically about EOD charts here, charting and
analyzing XJO gives us a clearer picture of TIME cycle analysis, in the
underlying market .....
..... and ultimately, that is what drives the SPI ... !~!
In fact, if we do not consider XJO as part of our SPI trading, then we are
also missing out on another important indicator, that being the premium or
discount, that the SPI is trading to XJO.
Realistically, we are dealing with TWO levels of sentiment, DAILY
..... one generated by the whole market and reflected in XJO and the other
is "intraday noise" generated by interest in the SPI itself ..... this is what
produces the spikes, as well as the discount and premiums to XJO .....
..... AND any trader who has traded the SPI overnight, also knows that
the overnight market is chiefly influenced, by a THIRD level of sentiment,
which is the DOW ..... and some of the volume at the open and close of
the day session is overnight traders opening and closing positions.
So, reliance on SPI data, as the sole means of trading that market, means
that we have disregarded the primary driver, XJO ... and without XJO,
there would be NO SPI ..... !~!
Analysis of the TIME AXIS on the XJO chart is of utmost importance for
position traders in the SPI ..... the trades may be less frequent, but if
the timing is right, then the rewards speak for themselves ..... and the
stress level for traders is much less than being glued to a monitor all day,
trying to scalp a few points out of intraday moves .....
..... but, to be effective in position trading the SPI, MARKET TIMING is very important.
have a great day
paul
=====
Trembling Hand
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Re: Data SPI
Trader Paul BUT
How do you deal with a part of the data that doesn't even represent the open as I first stated (because of the unusual ASX staggered open)
You gann stuff is all fine but if you are trading the SPI and the XJO is giving you an open that is 120 points away from the real market what application has it to someone who trades the SPI not an untradeable index?
Or more importantly why introduce false data into someones analysis that seems to be reasonably new at the game. When at that stage pattern identification and memory and opportunity identification is so important to learn the RIGHT way the first time. Why waste time when starting out looking at prices that aren't real. As per example below
Trader Paul BUT
How do you deal with a part of the data that doesn't even represent the open as I first stated (because of the unusual ASX staggered open)
You gann stuff is all fine but if you are trading the SPI and the XJO is giving you an open that is 120 points away from the real market what application has it to someone who trades the SPI not an untradeable index?
Or more importantly why introduce false data into someones analysis that seems to be reasonably new at the game. When at that stage pattern identification and memory and opportunity identification is so important to learn the RIGHT way the first time. Why waste time when starting out looking at prices that aren't real. As per example below
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Re: Data SPI
Hi TH,
Using the underlying XJO data makes sense to some people, as it is the
overall driver of the Aussie SPI .....
..... you can put up whatever charts you like to look at PAST PRICE data,
which is a LAGGING indicator in any trader's language ..... and you may
wish to fry your brain trying to scalp a few points intraday, but using a
longer-term stance, with a lower overall risk profile and less frequent
trades is an attractive proposition to some traders .....
..... AND the most important driver of the SPI over the longer-term must
surely be the underlying XJO market sentiment ..... and that can be
anticipated well in advance, using TIME cycle analysis of the XJO market.
Once we have identified a major turn in the market, we can further
optimize our intraday entries/exits, using a wide stop (or no stop initially)
and maybe even entering overnight, then closing the stop up to the entry,
as the trade moves into profit ..... this may sound reckless to those who
fear the markets, but for traders who have developed confidence in their
own SPI trading methods over a long period of time, it can be rewarding.
As for the gaps in the SPI ..... as explained, much of the day's session
moves are already anticipated by traders taking positions in the overnight
market and selling/buying at the open of the day session ..... so, the day
and night sessions are really two different markets, with traders
often being unwilling to stay with either one beyond the immediate open
or close ..... that was shown, in your own charts, where the SPI had been
driven up substantially overnight and profit-takers moved in, at the open
of the day session and buyers stayed away for the rest of the day.
As Zenin said:
"I currently don't require live data so any links would be appreciated."
..... so, we responded with a view that may be different to yours,
but that certainly does not make it WRONG (or yours right).
Again, TIME is more important than PRICE ... at the end of the day,
knowing WHEN to trade is more important, than the price level ...
..... ie ..... we just use price to calculate our profits/losses ... !~!
BTW, TH .... how long have you been trading the SPI ..... ???
have a great day
paul
=====
Hi TH,
Using the underlying XJO data makes sense to some people, as it is the
overall driver of the Aussie SPI .....
..... you can put up whatever charts you like to look at PAST PRICE data,
which is a LAGGING indicator in any trader's language ..... and you may
wish to fry your brain trying to scalp a few points intraday, but using a
longer-term stance, with a lower overall risk profile and less frequent
trades is an attractive proposition to some traders .....
..... AND the most important driver of the SPI over the longer-term must
surely be the underlying XJO market sentiment ..... and that can be
anticipated well in advance, using TIME cycle analysis of the XJO market.
Once we have identified a major turn in the market, we can further
optimize our intraday entries/exits, using a wide stop (or no stop initially)
and maybe even entering overnight, then closing the stop up to the entry,
as the trade moves into profit ..... this may sound reckless to those who
fear the markets, but for traders who have developed confidence in their
own SPI trading methods over a long period of time, it can be rewarding.
As for the gaps in the SPI ..... as explained, much of the day's session
moves are already anticipated by traders taking positions in the overnight
market and selling/buying at the open of the day session ..... so, the day
and night sessions are really two different markets, with traders
often being unwilling to stay with either one beyond the immediate open
or close ..... that was shown, in your own charts, where the SPI had been
driven up substantially overnight and profit-takers moved in, at the open
of the day session and buyers stayed away for the rest of the day.
As Zenin said:
"I currently don't require live data so any links would be appreciated."
..... so, we responded with a view that may be different to yours,
but that certainly does not make it WRONG (or yours right).
Again, TIME is more important than PRICE ... at the end of the day,
knowing WHEN to trade is more important, than the price level ...
..... ie ..... we just use price to calculate our profits/losses ... !~!
BTW, TH .... how long have you been trading the SPI ..... ???
have a great day
paul
=====
wayneL
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Re: Data SPI
However I recognize the importance of time, and use time (loosely) in my trading, but I'm stumped as to how time can be more important tahn price.
So far, despite questions, nobody has been able to explain this concept.
I've never been able to figure out how to get my broker's statement to show a profit for time (apart fro time premium). It is differential in PRICE that says whether I made a profit or loss. Even time premiums comes down to differential in PRICE.
However I recognize the importance of time, and use time (loosely) in my trading, but I'm stumped as to how time can be more important tahn price.
So far, despite questions, nobody has been able to explain this concept.
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Re: Data SPI
Hi Wayne,
.... it's a very simple concept, for most traders.
If we know WHEN to trade, then it matters not what the price level is
..... if we are trading at an extreme reversal level (and our timing is right),
then a minimal (or no) drawdown will be experienced, as our trade is taken
and the trend reverses, in our favour .....
.... alternately, if we are trading, with a trend and we anticipate a breakout
at a particular TIME, then we take the trade at that TIME, with a stop in
place.
Up to this point, price has not even been considered, except to place an
order, giving the broker something to do and enable you to gauge, whether
the trade is profitable or not ... simple stuff, really !~!
For example, we are already expecting some negative cycles to emerge,
in May/June 2008 for XJO/SPI ... so, on these days, our bias will be towards
trading the short side.
14-15052008 ..... 2 negative cycles
06-09062008 ..... 3 negative cycles - may be volatile on Monday
(09062008 = market trading around same level as 15052008?)
27-30062008 ..... negative cycle and market trading around
same level as the dates, above ..... ???
On the positive side, we are expecting to be trading long, on:
24-25072008 ..... positive cycle
Short again ..... 28-29072008 ... negative cycle
Long again ..... 04082008 ... positive cycle
08-11082008 ... positive cycle
Short again ... 19-20082008 ..... 2 VERY negative aspects.
... any of these may be further fine-tuned for intraday entry/exit TIMES, too.
So, let's see the PRICE traders give us some forward-looking dates to trade,
so we can compare market sentiment on those days .....
have a great day
paul
=====
Hi Wayne,
.... it's a very simple concept, for most traders.
If we know WHEN to trade, then it matters not what the price level is
..... if we are trading at an extreme reversal level (and our timing is right),
then a minimal (or no) drawdown will be experienced, as our trade is taken
and the trend reverses, in our favour .....
.... alternately, if we are trading, with a trend and we anticipate a breakout
at a particular TIME, then we take the trade at that TIME, with a stop in
place.
Up to this point, price has not even been considered, except to place an
order, giving the broker something to do and enable you to gauge, whether
the trade is profitable or not ... simple stuff, really !~!
For example, we are already expecting some negative cycles to emerge,
in May/June 2008 for XJO/SPI ... so, on these days, our bias will be towards
trading the short side.
14-15052008 ..... 2 negative cycles
06-09062008 ..... 3 negative cycles - may be volatile on Monday
(09062008 = market trading around same level as 15052008?)
27-30062008 ..... negative cycle and market trading around
same level as the dates, above ..... ???
On the positive side, we are expecting to be trading long, on:
24-25072008 ..... positive cycle
Short again ..... 28-29072008 ... negative cycle
Long again ..... 04082008 ... positive cycle
08-11082008 ... positive cycle
Short again ... 19-20082008 ..... 2 VERY negative aspects.
... any of these may be further fine-tuned for intraday entry/exit TIMES, too.
So, let's see the PRICE traders give us some forward-looking dates to trade,
so we can compare market sentiment on those days .....
have a great day
paul
=====
wayneL
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That's it?
LOL
LOL
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Re: Data SPI
Time is the only mechanism on the chart that allows you to forecast.
In your options trading, price needs to move to a certain level or change in a given TIME.
- Time is a Contant and Price is not
-Most Pattens you view in price are actually as a results of combinations of Cycles and therefore linked time, so pattern traders are actually using time without even knowing it.
I am not a Gann Trader but I do use time analysis frequently in Dynamic and Fixed Cycles work, but only in conjunction with Price patterns as Mag does.
How I use time, if I know the cycle is up between 2 cycle points then I trade long, if the cycle is down between 2 cycle point I trade short, it ain't complicated!!
Time is the only mechanism on the chart that allows you to forecast.
In your options trading, price needs to move to a certain level or change in a given TIME.
- Time is a Contant and Price is not
-Most Pattens you view in price are actually as a results of combinations of Cycles and therefore linked time, so pattern traders are actually using time without even knowing it.
I am not a Gann Trader but I do use time analysis frequently in Dynamic and Fixed Cycles work, but only in conjunction with Price patterns as Mag does.
How I use time, if I know the cycle is up between 2 cycle points then I trade long, if the cycle is down between 2 cycle point I trade short, it ain't complicated!!
Wayne,
Time is only relevant if you're building trading models that try and forecast, if you don’t use a forecasting model then don’t worry about. Time becomes irrelevant to your own trading.
Entry, exits, stop-loss, support, resistance are far more important.
A break of support or resistance, or a bounce off support or resistance, isn’t a pattern based on cycles, it’s about supply and demand at that instance, which a has a random outcome as an end result.
It just so happens that all my support and resistance levels are based on Time and Price variables and variations (example chart below), therefore a valid support level today doesn’t become a valid support level tomorrow, because of the shift in the TIME component: - i.e. Pivots, as per 5-day patterns, or higher timeframes
Because I know you use Pivots, you are using a time variable in your trading method.
It’s then up to me to develop trading strategies that are all based on price variables ;- ie entry, exit, stop loss, therefore Price becomes far more important than Time if you are a trader.
I’ve been using 'time and price' models far longer than most people, and Time is an important factor when building a ‘predictive’ Model, which helpS anticipate moves in the market, but in reality Price is the most important thing when I’m trading.
Time won’t make you money, Price does! Unless it’s Time in the market.
Time is only relevant if you're building trading models that try and forecast, if you don’t use a forecasting model then don’t worry about. Time becomes irrelevant to your own trading.
Entry, exits, stop-loss, support, resistance are far more important.
A break of support or resistance, or a bounce off support or resistance, isn’t a pattern based on cycles, it’s about supply and demand at that instance, which a has a random outcome as an end result.
It just so happens that all my support and resistance levels are based on Time and Price variables and variations (example chart below), therefore a valid support level today doesn’t become a valid support level tomorrow, because of the shift in the TIME component: - i.e. Pivots, as per 5-day patterns, or higher timeframes
Because I know you use Pivots, you are using a time variable in your trading method.
It’s then up to me to develop trading strategies that are all based on price variables ;- ie entry, exit, stop loss, therefore Price becomes far more important than Time if you are a trader.
I’ve been using 'time and price' models far longer than most people, and Time is an important factor when building a ‘predictive’ Model, which helpS anticipate moves in the market, but in reality Price is the most important thing when I’m trading.
Time won’t make you money, Price does! Unless it’s Time in the market.
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opcorn:Thats it LOL . You seem to be pretty ANTI Gann . After all you started The NON Gann thread ? Gann is not a perfect system , it is based on alot of seasonal and geometric timing componets that are described in The Commodity Course and if you have taken the time to study this material or similar books you would understand the importance of balancing time against price ,This is a key componet and should be used in conjunction with other factors like Anniversary Dates and Seasonal time , its not a silver bullet and doesnt work all the time but it is a timing mechanism . You want people who have studied Gann for the past 5 - 10 years to loosely hand out imformation and systematically break their system down for you to ridicule . If you are serious about learning Elliot or Gann go straight to the source do the work , get the foundations down and then you might have something to work with and contribute . I am sure your a nice guy , its the same with me , I could poke holes in Elliot , but I havent really studied his material in any great depth so I am not qualified in this regard , others like Wavepicker have done the work here and I can learn from them
Trembling Hand
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Re: Data SPI
You still haven't addressed my main point that this game is pattern recognition and a newbies first task is recognizing patterns. The right patterns. With a price bar you have 4 bits of info. With an XJO chart 25% of that info is RUBBISH. If you traded stocks would you make a bar chart with the open ALWAYS at yesterdays close irrespective of where it opened that day? As you have said Time is more important to you fine. But as I said in the first post about this looking at an XJO chart when trying to trade the SPI is going to show you data or opportunities that just aren't there. And with a new trader that is going to be a step in the wrong direction... BUT you must disagree?
I think you may find you are on the wrong end of your own zero sum game with arrogance here mate. I believe that people who have seen my long term results and volume of SPI trades I do know that I have a pretty good record in picking SPI patterns.
thanks for that wisdom.
You still haven't addressed my main point that this game is pattern recognition and a newbies first task is recognizing patterns. The right patterns. With a price bar you have 4 bits of info. With an XJO chart 25% of that info is RUBBISH. If you traded stocks would you make a bar chart with the open ALWAYS at yesterdays close irrespective of where it opened that day? As you have said Time is more important to you fine. But as I said in the first post about this looking at an XJO chart when trying to trade the SPI is going to show you data or opportunities that just aren't there. And with a new trader that is going to be a step in the wrong direction... BUT you must disagree?
and you may wish to fry your brain trying to scalp a few points intraday, but using a
longer-term stance, with a lower overall risk profile and less frequent
trades is an attractive proposition to some traders .....
this may sound reckless to those who fear the markets, but for traders who have developed confidence in their own SPI trading methods over a long period of time, it can be rewarding.
BTW, TH .... how long have you been trading the SPI ..... ???
I think you may find you are on the wrong end of your own zero sum game with arrogance here mate. I believe that people who have seen my long term results and volume of SPI trades I do know that I have a pretty good record in picking SPI patterns.
thanks for that wisdom.
Trembling Hand , Identifying and determing the possible outcome of a price pattern is of great importance . Certain stocks or Commodities might have a behavioural tendency to react in a particular maner after a price or time trigger . Mclarenn goes into detail on this subject looking at false breaks and counter trend reactions and at what stage of the trend these formations take place . Its a good series .
wayneL
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No I'm not anti Gann at all, just wanted some questions answered. It's just that some Gannists are pretty slippery when it comes to questions, you have to admit that. But you, Paul, WP and Frank have done a lot of answering on the time question, which I really appreciate.
BTW the LOL was misinterpreted. It was a LOL because that's pretty much how I understood it and was expecting something completely different... should have added a smiley or something.
Cheers
Trembling Hand
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Gazelle. Sorry not sure what your trying to say.
professor_frink
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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
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
Trembling Hand
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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.
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.
wayneL
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BTW, there is a SPI thread for Gann analysis here; https://www.aussiestockforums.com/forums/showthread.php?t=4875&highlight=spi+gann+techniques
It's got a few cobwebs on it, but it would be interesting to kick it off again. I'm sure there would be plenty of interest.
Cheers
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