Manual Gann Grid Technique

There is a technique I forgot to mention the post about creating a Gann Grid from scratch with Metatrader 4 tools. The technique is basically using the grid to find future squarings of price and/or time from the price action contained within the grid.

The initial move from the start of the grid went up to 135° of price and went out to just over 180° of time. Do the following:

1) Count out 135 bars and mark it.

2) Count out 180 bars from the high and mark it. The move went over 180° of time by a few bars, but 180 is close enough. The 180 puts time out near 360°.

The initial move defined a later move from beginning to end. It doesn's always work out that way but it's worth marking. The other thing worth noting is the price range the Euro is in. 1.3436 is the 135° from our start price. Move the decimal over on the price a couple of spots on price and you're 2/10 away from 135. So doing bar counts in that 135 area from any high or low will probably show some reaction.



Coming up to current events, I had created a new grid and the same techniques will be applied. Again, a EURUSD 30 min. chart is used.

Beginning a grid from a pivot low at 9/04/07 14:30, price had risen up to 90° of price in just over 45° of time. 56° of time to be precise. So using those numbers of 90° and 56°, price peaked 90° of time later after the Nonfarm Payrolls report from the measured peak. From the vertical lines of 45° and 90°, measure over 56° in time and price peaked at those marks.

Natural Cycle Update

The Natural Cycle has arrived. I was thinking price was going to drop down into it, but the opposite happened and price has peaked at the arrival.

The safe method of trading a cycle event is to find confluence with other indications. Also, wait until the top or bottom has proved itself to be a top or bottom, ie wait for a pullback or wait a couple of days to see if a change in direction is in place.

I have a few other indications that this recent peak is a top and I have some sell stops waiting to trigger. But as always I start small so in case I'm wrong the loss is small.

The Ellipse Part 2

The ellipse is one of my favorite shapes because it describes so much in the universe. Cycles are proven to be ellipticical in nature. The orbits of the planets, of solar systems around galaxies, sub atomic particles, and so forth, are all elliptical.

My first encounter with the ellipse in financial markets was through Brad Cowan and his book, "Four-Dimensional Stock Market Structures and Cycles ". According to Cowan, the major and minor axis form tetrahedral geometry structures and that the advances of price are contained within the ellipse.

The basic shape of the tetrehedron is the equiliateral triangle which I showed in a previous post to be a significant shape that shows up in market charts. So understanding the equilateral triangle it's easier to understand the placement of the ellipse on the chart.

Going beyond Cowan, my research has led me to form some interesting conclusions. Where the tetrehedron is the 3D version of the triangle, the 3D version of the ellipse would be the torus. But the torus isn't just a static object. It rotates around an axis twisting and turning to its center. So because of this 4 dimensional behavour, in essence a straight line within the torus can not be represented on a 2 dimensional chart as a straight line. There is time and motion dimensions not accounted for.

For example, if you were to hold a magic marker in your hand perfectly still for 365.25 days, the orbital path of the earth would carve out a torus in space around the sun. However, the Earth rotates on an axis tilted to 23°. While you would be perfectly still drawing what to you would be a straight line in space, the end result would be a line anything but straight to an observer out in space. If the observer in space attempted to draw what he saw on a 2 dimensional chart, the patterns of the lines would be large when they were close and small when they were far due to 3d perspective coupled with the elliptical orbit of the Earth.

That is just a fraction of the nature of the torus. There's also the vortex, but I'll save that for another time. But think about what is taught in junior high geometry. The circle, ellipse, parabola, and hybperbola are all cross sections of the cone. Does the cone not look like a solid form of the vortex? So do circles, parabolas, and hyperbolas, show up in the markets, too?

Cycles of 45 and 144

Almost exactly a year ago I had calculated some cycles of 45 and 144 calendar days from a point in December of 2004. I had totally lost track of this chart and found it tonight. I wish I would have been using it the past year because it has held up extremely well. Notice the aqua lines cherry picking tops and bottoms. Trading nothing but those lines alone could have paid off handsomely.

Of course it's all hindsight and I took most of this year off from trading. But fate would have it that there is a blue line coming up later this Sept. I've got some other cycles in that general area as well. Plus time is advancing just past a 45 count.

There's also a triangle forming, so we'll see how it pans out. Triangles are hard to judge but whatever price is doing at that line, I'll be watching it to reverse the other way.The first two shots were taken a year ago showing the cycle behavour back then. The third is the current standing situation.

The Square of Nine image is the actual chart I used to get the idea of plotting the 144th count. The number that will eventually pop up is 216 which is 144 away from 360. 360 can be broken up evenly in many ways. The more common are squares and trines which are fourths and thirds respectively. But there are a host of other numbers that come out of 360 evenly and it's not against the law to use numbers that don't. Although numbers that fit into multiples of 360 do hold. 360 x 2 = 720. 144 goes into 720 five times. 5 is a very signifcant number as well. Square root of 144 is 12 which is Universal. 144 is also a Fibonacci number. The digits add up such that 1+4+4 = 9. 9 is highly significant and so on and so on.

Nested Geometry

Nesting geometric shapes can provide turning points and vectors that define a path for price. A vector differs from a trend line in that a trend line usually defines consecutive highs or lows of price whereas a vector defines 2 points; a high to a low, a low to low, or a high to high.

The chart below starts with selecting a range which is highlighted by the red line. That red line defines one side of an equilateral triangle. Two lines are created from the angle of that line. One of them is 60° difference to define the second side of the equilateral triangle. The other is 30° difference to define the apex of the second nested equilateral triangle. Each circle is defined by the perimeter of the triangles or the interior of the triangles.

Some key things to note is how price ran straight up the 30° angle vector and terminated at the apex of the 2nd triangle. Also notice how price also ran down the outside of the outer circle reversing at the apex of the primary triangle.

It's also easy to get carried away. Last year I made something that ended up looking like a crop circle. Of course my buddies had to poke some fun and the 2nd chart below is Akuma99's interpretation. The third chart shows price taking off like a rocket at the end up the pattern.

Natural Cycles

In the style of Gann this post is going to be some what cryptic. Some of the best cycles to use are Natural Cycles. Mainly because they are easy to project into the future as well as the past when they are found.

Nature squares the circle. The image on the left describes 1/2 the amount of the cycle. It also describes the nature of the cycle and the nature of one of the cycle's key components in at least two ways.

The chart below shows the GBPUSD daily chart going all the back to late 1980. The red verticle lines mark off 32° of this particular cycle. Each olive colored line is 1°. The key degrees are 32° and halving down to 1°.

Price doesn't always conform perfectly to Natural Cycle but it's usually within 1-2 degrees. Below is an up to date 4 hour chart showing how relevant the cycle remains.