Handbags at 20 paces

[It's Snake Pliskin]

Tech,

What does it matter?

I for one can't understand why anyone would want to disclose their ways for fear of it being compromised in the mass market.

 

[tech/a]

Snake we are talking about Gann Time analysis and moggies use of it.
I am simply using an example which he has made public.

A simple generic question with regard to his use of tools in this case Gann Time grids.
This and other questions I have directed towards the author dont require exposing of any "secrets".

Its just common discussion I would have thought.

It appears those working with Gann have an in built negativity toward any questions.

 

[krisbarry]

Oh my god Just started reading this thread and the egos are out in full force, I might just crawl under a rock and let them go for it

 

[chops_a_must]

Oh my god Just started reading this thread and the egos are out in full force, I might just crawl under a rock and let them go for it

My e-p*nis is bigger than your e-p*nis! SING IT!!!

 

[krisbarry]

My e-p*nis is bigger than your e-p*nis! SING IT!!!

lol...too funny

 

[tech/a]

Moggie.
I notice that the Gann grids in this case dont start from a significant low but from the higher low which you placed as a critical low which has so far held.

Surely this would have had a bearing on your time analysis and you could also have selected other significant Lows or Highs to give you timelines,there may have even been some confluence.

Why THAT low?

Anyone at all answer this question?

 

[Magdoran]

I was planning to go through the whole Zinc campaign chronologically to deal with a range of issues in depth and how to deal with a range of contingencies in a campaign like manner, which was how the actual events unfolded in order to maintain the integrity of the analysis and application.

I was also planning to go though some other pertinent example such as the DAX example from the recent 02 June high to the 08 June support as published. It’s this simple, short the DAX for a counter trend play on the 04 June, and wind out that short on 08 June.

Given the recent comments and the incessant demand for pieces of the puzzle in piecemeal which won’t really be of any benefit, I just think, “what’s the point”? But I may as well address the nonsense once and for all and leave it at that.

So instead I’ll abandon the methodical approach I was going to do in instalments outlining the whole campaign when time allowed (which I don’t have much of currently), and just quickly answer this specific question in text without explaining the whole trading rule approaches available and gloss over these and let people work it out for themselves.

I can’t currently post any Zinc charts since Hubb has stuffed the data up yet again, and all my Zinc charts have corrupted data.

Hence I’ll make this one quick comment and that will be an end to it.

So for the chart posted on the 18 April 2007 for Zinc, it is clear to see that key support was identified for Zinc on the 16 of April, and a long was signalled then or by the 17th April.

There were three entry options open based on the pattern and the apparently valid time cycle in play:

1. Buy into weakness on either 13 April or 16 April given that April 15 was a cycle termination date.

2. Buy on confirmation on the 17th of April.

3. Wait for a pull back and buy into weakness after the 17th of April.


Failure was signalled with a close below the 13 April higher low. A stop logically would have been set below this low.

Another stop would be set based on time and pattern – the 02 June being the best case bullish scenario given the price action continued into this date. 21 May was the highest probability for a blow off “jamming up” move from the pattern.

These patterns can truncate in time at 50% of the time increment – in English, 03 May was the half way point between 15 April and 21 May, hence if the price action was bullish an exit half to lock in profits would be a major consideration.

The pattern exhibited in the chart posted above suggested that resistance was very likely on this day (03 May) or +/- one trading day, hence the price action called for a half exit or some kind of profit taking or hedging in my view at this point. In English take profits at close on 03 May - that time angle looked pretty compelling for a bounce in my view.

The idea of partial exits is based on a position/swing trading notion that even the most promising patterns can either temporarily pull against the forecast direction, or can fail, hence the idea is to avoid the situation of being in profit at one point, only to see an adverse move and then making a loss.

This approach can be based on doubling – exiting half to cover the initial cost of the position allowing the second half to be essentially a free trade since a loss in no longer possible. But if the pattern indicates further upside, the exit half (or one third) can be delayed depending on the situation and what rules have been adopted.

Hedging can be performed with options by selling calls or buying puts in a limited risk configuration (diagonal ratio back spreads, straight puts, etc depending on the best risk to reward proposition depending on available options, volatility, and duration of time value in strikes – essentially sometimes there is not enough time in the front month depending on where the expiry is in relation to the trading date).

In this case, there was a compelling pattern on 04 May to either fully hedge or exit the position since the price level was near a key increment, and just after a time increment where this kind of pattern can pull back. The idea being to re-enter a long on a confirmed higher low with the two time targets as time exit points.

What happens with some cycles is that the actual price low can be on or near the cycle low date, or it can be on or near a time increment either before the cycle low date, or after. In this case the actual price low came before the cycle low date, and in fact was a higher low to the major 02 February low.

Look at Zinc in a weekly chart, and the pattern was bullish into the top, hence was the bearish activity post the top a counter trend to the bullish drive in the longer time frame, or was it a completion of sorts and the start of a bear market for Zinc?

Either are possible, but what is more likely? The price action and pattern look more like a correction to a longer term bullish trend, and the norm from this kind of pattern/price action is for a strong short lived bullish drive to occur (McLaren “jamming up” move).

If you look through a host of charts with this kind of pattern, the underlying tends to rally strongly briefly, then retest the low over a longer period of time, base for a long period of time, then trend again (usually bullishly). Each of these phases has times and patterns that can define a probability. I have been developing a catalogue of these patterns.

From this pattern I determined that there was a high probability of a sharp bullish drive since the 15th of April was a cycle low, but was a higher low in price. The pattern and time cycle gave a high probability of a strong sharp short lived bullish response, just what you want if swing/position trading.

I had earlier identified a valid bearish time cycle was evident and got the final calibration to this on 26 February 2007. This allowed for a fairly accurate projection of time increments into the future, and during the cycle primary probability for the termination of the cycle was 15 April.

Now the concept here is that a cycle is like a flavour – hence in the cycle period the overall flavour would be bearish in the daily with 15 April the end of that phase. But the longer term “flavour” for Zinc I thought was bullish. Don’t forget that cycles and price action although inherently related are two different things – the actual price low can precede or lag the cycle low (a common mistake made by novice time cycle traders).

Hence the bearish price action in the daily was a counter trend in effect in the longer time frame to the bullish pattern in the monthly and weekly charts. This is a great advantage having a way of measuring in time how long a campaign in the daily chart may last.

This allows for options for instance to be sold with good premium at or near the money in order to generate income from the fairly flat pattern as was forecast.

Once the price action rallied hard on 04 April, this constituted a risk to the bearish forecast, and invalidated the projection for a capitulation move down. Once this happened, and the higher low came in right on the cycle low as a higher low in price with a bullish pattern, everything lined up for a short term bullish position.

But the dominant pattern that comes out of such strong bearish counter trends in a longer term bullish pattern is a short sharp move up which fails and retests the low with a more gentle move down, but usually fails to take out the low and then bases, then moves bullishly again.

The problem is timing and how the price action will play out. At least there is a model that can be used for this, and the way the underlying trades into the key time increments can constitute support of resistance just as price increments can.

If you view the charts there are price increments too. The patterns that develop within this area, and the resulting “time angles” can reveal much about probabilities.

So, once the 04 May high was reached, at least half should have been taken off the table. When the move down occurred, a stop loss needed to be set in both time and price. The projected times were exit points if bullish after a brief counter trend, or if the “jamming up” move was truncated in time (failed near the 03 May time increment), then a price stop would have required an exit of any remaining part of the position.

Trying to trade the counter trends in this kind of situation is highly risky (hence I don’t do it) but for those that do, they really need to take profits at obvious points of support in time and price gingerly.

The pattern suggested a bullish campaign was still the higher probability in the longer time frame, hence bearish plays were essentially counter trend plays. This means any swing trade is going against the trend, hence they are fast and risky, and profits need to be taken decisively especially when key time and price levels are evident. The recent DAX example is a counter trend play from a sharp high with a fast pull back into support. This requires precision trading.

Once Zinc pulled back over the 4% move overnight, this signalled that the jamming up move was definitely over, hence the price action and pattern was likely to be sideways and basing for quite some time. The time cycle here is now very valid, and although I wouldn’t do it, could be very useful for day trading off support and resistance in time and price. Certainly selling positions with premium (probably puts – and I only trade protected positions incidentally - not naked!) would be a consideration, but not one I’d do when there are trending markets to trade.

I hope that makes sense. This is all I’ll have time for, for quite a while... Our friend has demanded and derailed again, so this is the last time I will address his nonsense. So sorry, I won’t have time to do the whole campaign now.


Mag.

 

[ducati916]

Mag's baby

A bit of a generalization but, for the most part traders trade *Price*. They haven't quite caught onto trading time.

As for trading both simultaneously, that complicates matters even further.
Unless you are prepared to hand-hold, you're going to encounter a lot of resistance.

How about that for a hindsight call! But I am late to the party.

jog on
d998

 

[It's Snake Pliskin]

It appears those working with Gann have an in built negativity toward any questions.

I am not surprised considering the amount of negativity towards practitioners. All methods have their inherent weaknesses, destructiveness etc.

From my perspective, Gann approaches have more reason for being than many others. EW seems to me to be voodooo of the hindsight kind, rather than forward. Many will dispute this. I still study it and am taking my time. I am still trying to reduce my prejudice with regard to the voodoo aspect. Perhaps you could do the same with regard to Gann practitioners.

My handbag is worn out and need to purchase a new one before i comment further.
Have a nice day.

 

[>Apocalypto<]

I am not surprised considering the amount of negativity towards practitioners. All methods have their inherent weaknesses, destructiveness etc.

From my perspective, Gann approaches have more reason for being than many others. EW seems to me to be voodooo of the hindsight kind, rather than forward. Many will dispute this. I still study it and am taking my time. I am still trying to reduce my prejudice with regard to the voodoo aspect. Perhaps you could do the same with regard to Gann practitioners.

My handbag is worn out and need to purchase a new one before i comment further.
Have a nice day.

I am with you here Snake this is worn out and getting silly.

One thing I will say is I never see Mag attacking the fundermetals of any sytem. I see polite questions but never demands.

Peace to all and good trading, as right now there is plenty of money to be made. Enjoy.

 

[tech/a]

Moggie.

Thanks for the explaination.

I now see that the 15th was a cycle termination date and thats why you chose that date to start the Gann Grid.Relative to the significant low.

I can see where confirmation could be necessary to trade.
I can also see where you could trade off the time and price lines particularly if all is running to plan.

Snake

I am still trying to reduce my prejudice with regard to the voodoo aspect. Perhaps you could do the same with regard to Gann practitioners.

I dont think it or any analysis is Voodoo.
What I do find is that its application is difficult to follow---but moggs has been a help there.

Its application can be involved but in the hands of the trained simple.
Just like one who is conversant in Elliott/Market profile or P&F.

To actually explain all thought processes makes it extremely involved.
Something which the mind (moggies in this case) can see in pretty well an instant.

 

[Magdoran]

Mag's baby

A bit of a generalization but, for the most part traders trade *Price*. They haven't quite caught onto trading time.

As for trading both simultaneously, that complicates matters even further.
Unless you are prepared to hand-hold, you're going to encounter a lot of resistance.

How about that for a hindsight call! But I am late to the party.

jog on
d998

Hello Duc,



How are you?

Oh, I agree, this trading style at its apex is not for amateurs, that’s for sure.

It’s definitely not a “plug and play” style, although the basic charting concepts McLaren covers are quite accessible to people wishing to improve their charting skills, and can make a huge difference to their performance even without the move evolved materials in the “Time Factor” DVD, or wave structure (EW) for that matter.

The material in the “Time Factor” is suitable for people who are prepared to seriously study and apply it. But if someone has good visualisation skills and imagination, and can develop good charting skills that are effective, it is a logical extension.

So yes, you’d have to “hand-hold” for the more advanced material, hence it is not uncommon for people aspiring to becoming effective time cycle traders to seek out mentors.


Regards


Magdoran

 

[Magdoran]

I am not surprised considering the amount of negativity towards practitioners. All methods have their inherent weaknesses, destructiveness etc.

From my perspective, Gann approaches have more reason for being than many others. EW seems to me to be voodooo of the hindsight kind, rather than forward. Many will dispute this. I still study it and am taking my time. I am still trying to reduce my prejudice with regard to the voodoo aspect. Perhaps you could do the same with regard to Gann practitioners.

My handbag is worn out and need to purchase a new one before i comment further.
Have a nice day.

Hello Snake,


Good to see your research is progressing…

You’re right about the negativity, I weathered this for a long time on Reefcap, but some people seemed polite and receptive to an extent, although sceptical, which I can respect.

Interestingly some of the people from that site actually PM’d me on this site recognising the various calls I’d made ahead of time, recognising that there were benefits to the style I was displaying.

I have no problem for instance when people like Lesm raised some questions such as the ones on the “Improving Chart Analysis” thread, but did so respectfully and politely, with a genuine interest (hence I’ve got a lot of time for Les).

The people I have a problem with are in two main categories: the peons who make uninformed comments saying things like the forecast analysis is an “each way bet” without understanding the core concepts underling the approach, and then there is a special category for serial pests – the archetypal example of this is our resident Piranha-Duck.

By the way, you may find when you go through the Foundations DVD where the benefits of wave structure approaches can really help. Things like ending diagonals, nesting patterns, terminal structures, etc can really help. I’m beginning to think Neely is onto something in the time/price proportions too. This is certainly worth investigating, and is entirely compatible, and I hope a refinement to the work I’m doing.

The problem with both EW and Gann is that they are multifaceted, and very much an art. It can really help to have a good mentor spell some things out that aren’t obvious, plus they require a hell of a lot of studying, both actual charts and theory, and then how to apply this. This is quite involved, and that’s why I say it takes at least 3 years in most cases (if not more) to master the basics, let alone become a consistent trader.

So, I think you’re on the right track, studying and thinking about it. That’s the way forward.

Good to see you working through the ideas!


Kind Regards


Magdoran

 

[Magdoran]

Just a quick couple of points that may be of interest… which is how you can use two different disciplines such as Elliott Wave and Gann to help to decipher the market.

Have a look in the chart on the 27 February post 1462 on the “ZFX- Zinifex” thread and you will see that I was expecting a bearish reversal on or near the heavily marked horizontal black line (price increment).

Zinc may be about to turn here

Then look at the chart posted on 05 March post 1473 on the “ZFX- Zinifex” thread:

Here’s my current musings on Zinc

What you can see on the March 05 chart is what I anticipated to be a 1-2,1-2,1-2 Prechter version of an Elliott Wave nesting pattern.

Interestingly nesting patterns and ending diagonals can appear very similar. At the time, due to the cycle, I thought that at the end of the cycle there would be a bearish capitulation to wash out the sellers, and then for a bullish resumption to occur after the 15 April.

The capitulation of course didn’t happen, but look at the path that Zinc actually took, which was pretty close to the anticipated pattern for about 35 odd calendar days before the 04 Bullish breakout. So it was possible to enter sideways positions here with options in order to generate premium for example.

What happened of course was that this was an ending diagonal, not a nesting pattern. But if you can see these EW patterns, they can give you some important clues to what’s going on. Ending diagonals often result in a violent and strong move in the opposite direction - they can be a key reversal.

Once that higher low came in on the 15th April, and that ending diagonal was at the base, this made a strong case for a strong bullish drive, which in this case is what transpired.

Also, if you look at both the major cycle dates (the dates in the upper part of the chart), and then look at the “harmonic” dates in the lower section of the chart, you will find that all except one resulted in a change of trend temporarily in the daily. Interesting huh? (Just think about day traders and very short term traders using this to position from!)

Sorry I can’t put a chart up currently with the corrupt data, hoping to have this fixed soon.


Regards


Magdoran

 

[Joe Blow]

Come on gents, lets keep the handbags in check, shall we?

I understand that disagreements often occur when discussing varying methodologies and theory as everyone has their own approach and area of expertise.

However, personal attacks, name calling and/or excessive antagonism are not required and are in fact against the site rules, so lets see if we can move this thread forward without them. The co-operation of all participants would be appreciated.

The mods and I hate breaking up brawls on the forums. We really do. No matter what we do we get accused of taking sides when all we really want is for the discussion to progress in a constructive, respectful way.

So thank you all in advance for your co-operation!

P.S. Take it from me, sometimes its best just to step away from the keyboard and go and do something else for a while when you feel your frustration levels rising. Its just not worth getting all worked up about. Jeez, now I'm starting to feel like Dr. Phil!

 

[theasxgorilla]

Mag's baby

A bit of a generalization but, for the most part traders trade *Price*. They haven't quite caught onto trading time.

As for trading both simultaneously, that complicates matters even further.
Unless you are prepared to hand-hold, you're going to encounter a lot of resistance.

How about that for a hindsight call! But I am late to the party.

jog on
d998

Pretty good 11th hour synopsis Duc!

So while we're out hand bagging, and getting toward the topic of time analysis...does anybody have any thoughts on Ray Merriman and his time-cycle work...does it align with the stuff you're doing Mags? I know a couple of practitioners. Curiously when it comes to trading I think that 90+% of traders actually do ultimately use price (movement, rate-of-change, support/resistance) for their trading decisions, and then they bolt on an exotic analysis technique to get their 'edge'.

 

[wayneL]

Time & Price

We all understand trading price. I understand trading time very well in the context of options. (Theta etc) I have a concept of trading time combined with price (whether that concept is the same as Gann's I have no idea, I think not)

Where I am like a mule at a new gate is the concept of trading time exclusively (leaving aside options) on a linear instrument like straight stocks or futures as per Duc's post.

How do you trade time and not price?

 

[theasxgorilla]

and then they bolt on an exotic analysis technique to get their 'edge'.

I should add, whether that 'edge' be actual or psychological (yes, only in the practitioners head).

 

[It's Snake Pliskin]

Come on gents, lets keep the handbags in check, shall we?

I understand that disagreements often occur when discussing varying methodologies and theory as everyone has their own approach and area of expertise.

However, personal attacks, name calling and/or excessive antagonism are not required and are in fact against the site rules, so lets see if we can move this thread forward without them. The co-operation of all participants would be appreciated.

The mods and I hate breaking up brawls on the forums. We really do. No matter what we do we get accused of taking sides when all we really want is for the discussion to progress in a constructive, respectful way.

So thank you all in advance for your co-operation!

P.S. Take it from me, sometimes its best just to step away from the keyboard and go and do something else for a while when you feel your frustration levels rising. Its just not worth getting all worked up about. Jeez, now I'm starting to feel like Dr. Phil!

Dr Phil,

I think you and the moderators are doing a terrific job with this forum.
Keep up the good work.

Kind regards
Snake

Mags,

Good to hear from you.

I believe you have a style that you find works and you understand why it works. That is all that matters for you and the rest doesn't mean anything. With that said I am sure others could try the same philosophy, because what works for one may not work for another. (sounds like a riddle)

Always appreciate your efforts.

Kind regards
Snake

 

[Edwood]

Time & Price

We all understand trading price. I understand trading time very well in the context of options. (Theta etc) I have a concept of trading time combined with price (whether that concept is the same as Gann's I have no idea, I think not)

Where I am like a mule at a new gate is the concept of trading time exclusively (leaving aside options) on a linear instrument like straight stocks or futures as per Duc's post.

How do you trade time and not price?

I doubt you could and I don't think that's what the intention is - I might be missing something but you'd always want to check what the price is doing.

if I were using time & price & my price were hit but time was out by a few hours / days / weeks I wouldn't be hanging about waiting