Wednesday, May 22, 2013

anatomy of time cycle:

30 yrs  = 12x30= 360 months
22.5yrs= 3/4 = 270 months
20 yrs=2/3=240 months
15 yrs =1/2=180 months
10 yrs =1/3=120 months
7.5yrs =1/4=90 months
5 yrs =1/6th =60 months
3yrs= 1/8th=45 months


Forecasting time of trned change:

There are a lot of way to forecast the time :

Some are mentioned here

USING BEGINNING NUMBERS FOR FORECASTING:

When a major bottom is formed the market will start up and go up the amount
of the beginning number of its bottom. When it makes a major top the market
will go down the amount beginning number of it's top. For example, it EUR/USD 1.223 so the bottom point factor will be 12.
it will move up as follows:
12 minutes
12 hours
12 days
12 weeks
12 months
12 years

Forecasting time with gann's method

importance of forecasting time:

  • To detect where the trend will end  and 
  • Where a new trend will start:

120 years cycle: major cycle
It is very important cycle.
60 yrs cycle x2= 120
30 yrs x4= 120

100 yrs Major cycle:


90 yrs major cycle:

3 time 30 yrs cycle
1.5 times 60 year cycle

80 yrs cycle:

60 yrs cycle:
master cycle that repeats over and over again

49-50 yrs cycle:

7x7 = 49 yrs

40 yrs cycle;
.5 of 80 yrs cycle

30 yrs cycle
.5 of 60 yrs cycle

20 yrs cycle

15 yrs cycle

10 yrs cycle:

8 yrs cycle

7 yrs cycle:
7x7= 49 yrs

5 yrs cycle

2/3/1 yr cycle:
This cycle is most important as most counter trends react against the main
trend with one of these small cycles.

Harmonics of time cycle:

say it is 60 yr cycle, 60/10= 6 , go back every 6 year cycle.

1 year and under cycle:

The cycles inside of the year are the 45, 90, 120, 135, 144, 216,
240, 244, and 270. The 45 day cycle can be broken down even further into
22 1/2, 11 1/4 day cycles. The 120 day cycle can be broken down into
60, 30, 15 and 7 1/2 day cycles. The 144 day cycle can be broken down into
72, 36, 18, and 9 day cycles. It is important to
understand that all cycles must fit within each other. The smallest cycle of 11
1/4 is a part of even the 100 year cycle. 

USING DAILY CHARTS FOR FORECASTING:


watch for short term trend change 3.5, 7,11.25,14, 15,18,21,22.5,28,30,45,60,72,90 days for trend change.



Recurring cycle:

Market makes repeat cycle of past so go past and see
high,
Low
Top
Bottom

  • Daily chart will contain 28 months data in a window
  • weekly chart will contain 10 year data
  • monthly chart will contain 40 yrs data.
  • 5 min chart will contain 3.5 days  data
  • 15 min chart will contain 7 days data.
  • 1 hrs chart will contain 30 days data
  • 4hrs chart  will contain 4 month data

Support and resistance in Gann Methods

Market moves within support and resistance:

here trend is detected by drawing trend line and time cycle:

Range market:

  • Take the high or low price divide it by 3/4( odd= 3, even =4) number, 
  • If you want to go down further divide it by 6/8 or even 12/16 or so
  • when market approach these support or resistance is starting to show possible change of trend.
  • middle point is most important.
  • market will hold many times 3, 5, 7 days or 3,5,7 weeks or even 3,5,7 moths in a trend.
  • Example if the market trend is down it will go down minimum 3 days from last trend changed.
Highest time or lowest time for ever:

divide these by odd or even number or their multiples to get support or resistance.

previous High or low:

divide these by odd or even number or their multiples to get support or resistance.


Tops or bottoms:

divide these by odd or even number or their multiples to get support or resistance.



important time frame for gann trading:

Yearly for long term 

monthly for long term

weekly for intermediate and long term

daily for long term

Hourly short term

60 min , 30 min,15 min short term 




Gann Time cycle.

Gann Time cycle:


1 complete circle is 360 degree
divide the circle /4 and get

360
270
180
90
Break these further
90/2 = 45
22.5
11.25

you can break these number  further

60
30
15
7
3.5

3 is important number
3x3x1= 9
18
36
72
144
288

Take 3x4= 12
24
48
96
here number 3, 7, 9 is important

7
14
21
28
35
42
49

Minor time trend change will occur in every:

3.5, 7,9,11.25,14, 15,18,21,22.25,24,28,30,35,36,42,45,48,49,54,60,72,90,96 days.(days  starting from last traded price that is closed price)

Intermediate time trend change will occur in every 

120, 144,180,270,288,360 days

long term time trend change will occur in every  

3.5, 7,11.25, 15,22.25,30,45,60,90 years.

Monthly moves: 

Based on 1 year cycle= 12 months/4= 3 months
So change will occur in
end of 3rd month
6th months
9th months
12th months

Change in trend on the basis of pivot point:

  • When daily pivot is broken trend will move for 3-10 days.
  • when weekly pivot is broken market will move 3 weeks.
  • when monthly trend (pivot ) is broken market will move at least 3 months
  • When yearly trend (pivot) is broken market will move 3 years.



Friday, May 3, 2013

How to Identify Elliott wave count

Here is a technique I use for day trading.

  • Use 1hr chart for day trading, to see the trend.
  • See any tops or bottoms, Head and shoulder, Double tops or bottoms. 
  • It is the maximum area of support or resistance.It may act as starting or ending of Elliott waves.
  • Draw trend line , trend channel  for ew counting.
  • Identify whether it is wave 1/5, or a/c.
  • We can also use divergence to identify wave 3/5,a/c
  • We can draw channel for wave detection.
  • apply wave rules for wave counting.
  • Use stochastic to see the change in this time , it can also identify wave with rate of change.
  • Use MA short term , intermediate term, long term 13, 21,50,100,200 to see price reaction with thse MA.