Time Analysis

[sails]

Thought I would start a new thread to keep the charts together. This is my version of analysing time and was inspired by Gann's book "How to make profits in Commodities" where he says to measure time in ranges, tops to tops and lows to lows - or something along those lines as my copy of the book is packed away in storage at the moment.

To gain this knowledge from courses was a hefty price when I started a number of years ago. So, I observed the markets myself and saw what happened. I consider myself a beginner in time analysis and my version of it may not be conventional - lol.

IMO, time analysis seems to be one of the mysterious things about Gann techniques. Other than time (and astro analysis which I haven't learnt), most other price and volume analysis that Gann appeared to use are mostly familiar to us. So will share my version of time analysis in the hopes of clearing up some of the mystery.

I am not a Gann expert and the methods I use are not a holy grail. It doesn't always work perfectly - same as with most other analysis. Gann was big on the use of stop losses so he obviously didn't have a never fail system either. However, when the time counts come in close to the time the charts are also showing a potential turning point, it gives a bit more confidence to take the trade. It gives both x and y coordinates on the chart which can be helpful.

I personally don't use it for forecasting - I like to see what the markets are providing when that time arrives and then look for confirmation in price, volume, chart patterns, etc. My general rule of thumb is that time is likely to reverse the market - so if the market is trading in a reaction, it is likely to turn back with the trend. If it is trending and hitting important price levels, it is possible that it will reverse around that time. It may not necessarily be a major turn - and sometimes it will only pause the market.

The simple calendar day counts I am showing on the charts were originally based on SPI futures, but due to the difficulty of getting SPI eod charts, I am showing them on the XJO.

A couple of these charts were posted on this thread: https://www.aussiestockforums.com/forums/showthread.php?t=13871&page=2 and started on post #357. Anyone interested can follow up on the discussions on the other thread.

Would be grateful if any others using time analysis would also post their methods so we can all learn...

Below is the first chart which was originally posted on the 3rd may and shows that the XJO was running in 21 calendar cycles at that time.

 

[sails]

Here is the second chart and the post I wrote at the time:

21 days is up tomorrow (8th May), so it's time to be on alert and watching for signs of a change in trend. It can be a day or two either side of the projected date, so I have been watching it closely today. This is when other factors come into play as confirmation - a case of prove / disprove. It's just another indicator - at least that's how I have used it. Have posted the updated chart below. There are some interesting smaller time cycles inside these last 21 days. Will try to give more info tomorrow. Also, I need to get the larger time cycles (eg weekly, monthly) worked out as that also helps narrow things down a bit.

 

[sails]

Copy of the follow up post on 8th May at 4.36pm.

So far, nothing has given me enough reason to go short today. There is the factor of time (21 day cycle repeat) and price has firmly hit Aget's MOB, also Frank's monthly levels and a lower high on daily charts. There has been some range equality (will post info up on that in charts on the w/end). Otherwise, it's been pretty choppy today and there is no clear entry. IF it's going down, perhaps there will be some sideways first - I don't know . So, for the record, I have not traded today on the basis of time alone. There won't be any hindsight trades - lol. If I have missed something, it will become clearer as time moves forward.

With the benefit of hindsight, the high came on the SPI on Saturday morning - 22 days later - one day out is which is quite normal. The 3960 high came in on the XJO on Monday the 11th May . Will have to wait and see how deep the correction will be from this high. I haven't found time to give an indication as to the size of the move to follow.

 

[sails]

Below is a shorter term calendar day chart showing one of the smaller counts from the 6-9th March lows. Note the 2 lots of 5 day reactions and I thought it was possible we would have another 16 day move up into the 11th May. However, it did 17 days on the SPI and 19 on the XJO.

 

[sails]

And another chart showing how the sideways move into the 29th of April has created a 12 day reaction in time. From that point the XJO travelled up a further 12 days (equality in time) to the high on Monday, 11th May.

 

[sails]

Now here's a chart getting into the tiny time cycles leading up to the 11th May. The last bar is the 11th. Have put a note on the chart which should explain it. These tiny cycles are not so reliable, but often useful to use to hone into an up coming time point. The idea is we are wanting to see if the small charts will fit into the bigger picture.

 

[sails]

Here is a larger chart where the relationships in time are showing. It's hard to explain it well, hopefully the charts will help. It's pretty much just working with what the market gives and then fitting the pieces in as you go along.

Serious Gann technicians would use a lot more than the simple calendar days illustrated here. Hopefully, it will give the idea of how any sort of time analysis is put together. It can be fairly labour intensive if doing a lot of different time analysis techniques, and I found for simplicity's sake, just using the calendar days (and sometimes trading days) and fitting those pieces inside each other have been reasonably effective without spending a huge amount of my time at it.

I simply use pencil and paper and sketch them out which is done quite quickly. The charts I have posted here have taken a lot of time to put together - I don't do that for myself - lol.

 

[sails]

Tech, now that I've posted the charts, will have a go at answering your questions - hope your still around...

So Sails.

If you were long I guess you could only be reasonably confident if you saw the 2nd cycle come off.
OR would someone trading Gann Trade after the First 21 days was found to be a top.

At what time on the chart would the Cycle be confirmed.
I suspect after the 2nd 21 days appears.

These time cycles can change and morph into something a bit different and then re-appear again at a later time, so I wouldn't be necessarily looking for the same cycles to keep repeating - at least not in the short term. Also helps to be fitting in with the smaller and larger cycles as well. If one was long, you would still follow price and volume (or whatever else people like to use). I have never found time to be a stand alone indicator. Gann books state that he said time is the most important - but I still don't think it is stand alone by any means. Happy to be corrected by a Gann expert...

I look for smaller cycles to fit inside larger cycles. I look for 100% repeats or halves and thirds (occasionally quarters) of previous time cycles to fit together.

Personally, I look for price and volume to confirm if the time cycle is going to work. Any trades are taken with whatever one uses to enter the market. If you are using VSA, then that's what you would use. There are many different entry/exit triggers depending on aggressiveness, etc.

This is where I have trouble with the application.

Lets say we find the 2nd 21 day cycle would you go short?

If not at what time would you have gone long and WHY?
We now then have a 3rd 21 day cycle.
Does the trader go short?
And on what confirmation if any?

Yes, I reckon it would be a short on the second 21 day cycle. I think I posted a chart in the other thread showing some ideas on entry triggers.

This third one has been a bit more tricky because it gave no indication of a short on the day. Because the most recent top came in the middle of the night (Saturday morning) on the SPI and then extended itself to the 24th, it had a bit more doubt to it than the second one. However, one of the charts posted today shows the XJO repeating 12 days. I guess on that basis it could have been shorted sometime during the day. When time and price don't come together cleanly, I am more hesistant to take the trade.

I use time more as an added confirmation - not an indicator in itself. So, I would never take a trade on time alone.

Thanks for the effort.
You leave the others for dead.
Novice?
From what Ive seen your way ahead on ability to explain.

Thanks Tech. It's not easy to explain. Some will gravitate to this sort of things, others will find no use for it. I think it comes down to the fact there are many different ways to analyse the market. If it works, use it. If it doesn't, stay with what works for you.

Fortunately, I'm not selling anything - so just happy to show how I use time to help dispell the mystery. Won't be everyone's cup of tea... lol

 

[Timmy]

Fortunately, I'm not selling anything - so just happy to show how I use time to help dispell the mystery. Won't be everyone's cup of tea... lol

Nice work Sails. I am in the 'not my cup of tea' camp but your explanations here are nice and clear so even dummies like me can at least get an idea. Thanks.

 

[sails]

Nice work Sails. I am in the 'not my cup of tea' camp but your explanations here are nice and clear so even dummies like me can at least get an idea. Thanks.

Thanks Timmy - I'm sure most will be in the same camp as you! Quite happy if this thread now quietly finds its way into the archives, but at least there is some basic info on it for those who would like to dig a little deeper.

 

[Frank D]

Margaret,

When I released my first book in 2003 I had a section on
‘trading-day-counts’, because I looked a trends over the course of
34 days.

However, the merits of using ‘calendar or trading day counts’ have
an underlining problem, as they often seem hindsight trading at best
for someone who doesn’t understand the method or concept.

For someone reading this thread for the first time they might see some
merit in using such as tool, but they also want to optimize those
counts using some template of support and resistance. If you don’t have
a model that defines a trend, a direction of the trend, or likely
anticipated reversal of trend then counting can often be misleading, which
is often the case for many.

A template could be anything, even a simple 10-20 day moving average
could be used if you have found 'probability patterns' that resonate with
the moving average within the Primary and Secondary trends of the
market or stock traded.

Because once the trend has been established and the ‘count’ matches
the pattern, the trader needs to find the most robust and optimum
entry point, which either matches support/resistance, or as many
traders often do: trade the break and hold the momentum.


What is going to make someone buy into the Market after a 12-day
pullback?

What’s going to make someone hold for 42 days if price has
already moved 30% in 12 days?.. or if they exit the trade how are they going to jump back into the Trend?

When is the trader going to switch from a bias of trading on the short side to trading on the long side?... or not trading at all.

When and where is resistance in an UP trend?

The problem with using calendar counts on their own, is you
haven’t discussed or modeled trends or defined trends within
a certain ‘timeframe’.

What is Gann's definition of a Primary and Secondary Trend?

It can't just be X amount of days.

It's extremely important that someone defines those trends so that
'counting' has more merit:- either trading with the trend or reverting back
to the 'mean' of the trend.

It makes it easier to define a trend by either using some statistical
probability along with patterns of support, resistance and likely direction
over the course of X amount of days, than simply say X amount of days
and I will do X.

It's much easier to do X if and when the Trend has been established.

And this is where most people are let down by Gann, because Gann
doesn’t establish the basics of defining the larger trends. Or I haven't seen it.

Personally I think ‘counts’ have merit, but if you don’t have a
basic understanding of what the trend is, which most Gann analysts fail
to mention or define, most others will find Gann more of a hindrance than
a help.

Hence Gann traders often get a ton of slack because the basics aren't defined.

footnote:- I haven't used counts in nearly 5 years.

 

[Cartman]

good points as always Frank ---

and thanks Marg (less formal than Margaret ), for you efforts ---- irrespective of the analysis, i like the 'vibe' of the person behind the analysis, which i also get from Frank, so full marks there from me (which is probably worth about 5 cents on this Forum lol ---- )

nevertheless, in my little world of "cycles", time is important also --- but only from the point of view that the change in "price" (range) is relative to the time elapsed for that price movement ( for the given instrument traded) ---- thats called Momentum !! ----- and Momentum works differently in different time frames, as all things in life do!!

each instrument has its own 'tune' ----- just learn to play the instrument

ps most virtuosos generally only play one instrument

 

[sails]

Frank - The only reason I have posted the charts in this thread was purely in response to calls for someone to post something about Gann techniques. It was not because I wanted to promote this as a system - it was purely for illustrative purposes. I don’t use a lot of Gann, but have found time analysis to be complimentary to other TA and is probably the most misunderstood side of Gann. The charts took much longer than I anticipated to put together and certainly have some regrets doing it. Anyway, it’s there now if anyone is interested.

I have already explained that my use of time may be a bit unconventional (and probably not strictly Gann) because I didn’t get a lot of “education” in that area. I have only described how I use it – and it isn’t based on x days. It is more based on smaller cycles fitting into larger cycles. x days only becomes a heads up when it fits in with other things.

You make some good points and, incidentally, I hadn’t used time counts for 2-3 years either. I started them off again recently to see if they would help with having another go at SPI trading. I found it interesting that some my time cycles were fitting in almost perfectly with some of your important levels – and was one of the reasons I was interested in your work and subsequently purchased your book.

Thank you for reinforcing the fact that time should not be used in isolation. I thought I had repeatedly stated that it wasn’t a stand alone system – perhaps I didn’t stress it enough. Personally, I use price (includes various methods and now your levels), pattern and volume. I see time as simply another piece of the jigsaw and not the entire picture. I haven’t gone into everything else as there are pages of information here at ASF that define other methods of TA and it took quite long enough to just put up some illustrations on analyzing time and I really didn’t want to re-write whole text books on price, volume and pattern information. Same with entry and exit points – every trader would have their favoured methods.

Your mention of calendar day counts being easier in hindsight is very true. Of course, much easier to see them than trying to anticipate. But then that is true of so many other methods. For example, your levels look very impressive in hindsight, but in live trading when those levels are hit, one always need to be prepared that it might break through. I don’t see this is any different. I also see no need for competition in your use of time and the way I have described it in this thread and certainly do not wish to detract in any way from your systems. The two are used very differently. Your use of time is extremely useful and I personally like the way you have developed your system. Personally, I have found the two to be complimentary. Could be because I have had so much practice in the use of short term day counts and it becomes somewhat intuitive.

You asked about entering after the 12 day pull back – that’s where you use other technical skills. In that case there were two down days before the upside move. The second one, on the 29th April was a small range doji and well supported above the double lows of the 21st and 22nd April. There were also 11 days from the previous minor top on the 6th April to the top on the 17th April – which is only one day out. One possible entry point would be above the high of that doji the next day and would provide some confirmation that . Intra day traders would possibly find a closer entry.

I think that covers most of your questions as they generally related to the use of time on it’s own which I do not do myself, nor would I recommend it. When used in tandem with other TA of choice, it can be complimentary. Please let me know if I have missed any other questions!

Cartman - thanks for the reply. I'm sure some traders use time in varying ways to compliment their TA - how about explaining a bit more how you use it for momentum?

 

[It's Snake Pliskin]

Thanks for the efforts Sails. It gives some insight into what Gannists do.

Cheers...

 

[sails]

Thanks for the efforts Sails. It gives some insight into what Gannists do.

Cheers...

You are welcome, Snake. That's all it was intended to do...

 

[Apollo_kk]

Chart for Nymex Crude

 

[gazelle]

Looking for a top into the 12th June for the SP500 .
Price target might be 950 - 955 as an estimate .

 

[gazelle]

Actual High at 956.23 on the 11th June . Nice selloff occuring from this point .
Projection was one day out .