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THT Market Education - How to WIN


THT

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This is what WD Gann wrote about Lost Motion way back in the early 1900's:

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I just applied it to swing highs.lows after noticing they sometimes were breached and then quickly retraced

and I've previously mentioned and shown the 50% "gravity centre in the SP500 Index 

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12 hours ago, u0362565 said:

Ok thanks, yeah interesting way to think about it. I personally cannot yet trade the swings from high to low, just have to wait for them to happen and hopefully get in on the rally.

That's all you need to do 

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  • 2 weeks later...

CNX1 Trade closed out last Friday as the trailing 2 bar stop was hit - for a 29R profit

THT smashes out well over a 100% return on this one instrument since march 2020 (Its closer to 150%) - LONG ONLY - trading the methods in this thread and applying the rules to real life trades

Buying and holding right from the low in March 2020 to last Thursday would have returned 89% which is not bad at all (no-one would of been capable of doing this precisely though), but that's a bit risky for me as it could quite of easily been 20% or 15% or 25% profit- you NEVER know

WD Gann said:

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  • 2 weeks later...

I posted the other week on a GOLD thread - Here's an update with HUGE educational detail

Most RECENT down Swing - price finds support on the swing high (black horizontal line) - this is another one of Gann's methods, still works today! Gann might not have been the first to say this but as his courses were published over 100 years ago he's pretty well up there - anyway, 2 things: 

  1. Price declined to an old high and
  2. The 2RSI was <25% 

This signals a "potential" bounce/reversal whatever you want to call it

You could have set a buy order at or just slightly above the black horizontal line once price broke through it, to catch the anticipated bounce (Because we KNOW price could bounce from that zone, not guaranteed but we KNOW prior old tops/highs could provide support, its a valid reason to place an order at or above) OR you could have waited for the close of the bar and then placed a buy order 1 point above the HIGH of the low bar (this is the bar that penetrated the old top) this would have then been moved down to the high of the next bar as it was not triggered, this is the Inside bar and next bar of which was triggered the following day

You would also KNOW that if the thinking here is correct then price isn't going to take out the low of the swing low bar so that's where your stop logically goes - on EITHER entry

Obviously the stop on the old swing high is tiny in comparison to the other entry method, but both trades work

Notice the railway tracks formed here too!

IF the old swing high/top was not there, I'd be entering on the bar high method, but as it was there, its too much of a profitable opportunity to not have a test at

Now once in the position the target is the previous swing high labelled 1, however, you have to be mindful that:

  • You could be wrong or
  • Resistance levels could play a part

I'm sure you're aware of the resistance levels out there - I use a a combo of Gann levels and Fibonnaci but the gann levels override the fib levels for me and the 50% level is the main level for me

The main resistance level is the 50% level or as Gann called it 100 years ago, the Gravity Centre

You'd run the resistance levels from the swing high to the swing low that gives you the top Red 50% line (the lower 50% red line is from the previous swing low to swing high labelled 2 green to 1 red and that level is there to see how price reacted around that gravity centre once price declined to it

As we can see price faltered at the 50% level this was actually 1 point off the perfect level - 2RSI was overbought and showing divergence to the prior ob level, with the range of that high bar into resistance small it was a half decent shorting opportunity if the LOW of that high bar was taken out, which it was - This set-up is ultra high probability for a 2R return often more depending on the size of the swing, if price had of edged up through the 50% level I would have employed lost motion as the entry technique rather than the bar low method

Now price has found support and bounced off the 50% gravity centre of the prior up swing prev mentioned - this poked through 2 points lower than the 50% level and then rebounded upwards, another buying opportunity

Gann mentioned and I've detailed above something called "LOST MOTION" - Gann never detailed lost motion other than in his quote shown in the posts above - but this is what he meant, both the buy at the prior old high and this last 50% purchase are both examples of lost motion in the markets

Remember if we're right price is NOT going to hit your stop, we don't know what is going to happen for certain, so everything is a test

We are now at a decision point for GOLD - one of those 50% levels will win

I don't really care which one wins, I'm not predicting - all I'm looking for are tradable opportunities  

The whole premise of this post is:

  • Methods from over 100 years ago are still highly relevant and profitable in todays markets - the reason is that the LAWS of the markets will ALWAYS apply, discover the LAWS and you'll know what to expect
  • No-one can successfully predict every turn of the market, it is simply impossible to do consistently, so you have to have methods to "steal" little bits from it and have the patience to wait until they show up
  • You should be able to see that using lost motion as an entry method can bring huge R profits, not shown on this chart
  • You can very successfully use Indicators to trade from/with, in conjunction with other methods, as shown right throughout this thread
  • WD Gann's basic form reading methods still yield big profits to this day and always will because they are built around the laws of the market
  • If used correctly these methods have the potential to return very healthy returns, far greater than buying and holding

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Hi THT,

Thanks for the post as ever, I sometimes struggle to relate what you say in the text back to where this refers to on the chart.  So what i mention below you might not have talked about at all.  I've added your chart but i wondered how you handle the smaller up swings, i have highlighted one in blue on the chart below.  I can't see more of the historic chart perhaps this low hits prior support but its not visible so would you just not trade this swing.  I don't have more insight than when the market does turn try to get in early, maybe it comes to something maybe not and then i might have a target that is the previous high labelled 2 in red on your chart but as you can see it didn't make it. So either you trail your stop up and you got a small profit or you don't and you hopefully take a small loss.. You then wait for the next swing low which did find support at the prior low i have highlighted in blue. but again it did not reach the former high at 2 at least in the data shown so you would need to trail a stop and not rely on hitting the target.

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Edited by u0362565
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1 hour ago, u0362565 said:

Hi THT,

Thanks for the post as ever, I sometimes struggle to relate what you say in the text back to where this refers to on the chart.  So what i mention below you might not have talked about at all.  I've added your chart but i wondered how you handle the smaller up swings, i have highlighted one in blue on the chart below.  I can't see more of the historic chart perhaps this low hits prior support but its not visible so would you just not trade this swing.  I don't have more insight than when the market does turn try to get in early, maybe it comes to something maybe not and then i might have a target that is the previous high labelled 2 in red on your chart but as you can see it didn't make it. So either you trail your stop up and you got a small profit or you don't and you hopefully take a small loss.. You then wait for the next swing low which did find support at the prior low i have highlighted in blue. but again it did not reach the former high at 2 at least in the data shown so you would need to trail a stop and not rely on hitting the target.

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Hi - Yeah sure, let me explain:

  • @ #1 it did land on prior support - see chart below - but they don't all do this, sometimes you're left in limbo!  Squeaked through that as a lost motion entry , if you missed this then as a low point the next best entry is Ganns Secondary reaction (detailed below and in multiple posts on this thread in the pages above
  • The upswing from 1 to a = @1 the rally was the pre-curser, the pullback retraced to the Gann 50% level of that rally, I bought on price rallying back up through the Gann 50% level and I was stopped out on the bar marked a as it took out my trailing stop.  If on the price swing you refer to 1 to a, the rally and then the pullback in the middle of that up swing, 98% of bull markets start just like that - this one failed and ended up being a double bottom (which I also bought), but - the whole trade was profitable as i had 2 long trades on throughout and won
  • Not shown on the chart is a 50% level from the prior swing down to #1 that fell in the region of #a where the market reversed - this was not of the entire 2-1 swing down it was of the last leg of the swing down
  • Yes exactly - We don't know what the market is going to do in terms of price, there's no absolutes on the price side, so optimistically you should think prior swing high as a target and always trail a stop up to protect if you're wrong - often we'll be wrong!

So in this case the aim was prior swing high #2 (red), stopped out on trailing stop, bought back in at the DB, I mention elsewhere on the Gold thread the significance of the 2011 line, stopped out on trailing stop there and I reversed the position to short once the technical aspects for the short were in place (a-b on chart)

Chart below shows fuller picture - Blue line = prior highs/tops for which #1 and #2 found support along with the 2RSI which backed up the thinking

I've also circled in pink another low that bounced from prior highs/top - there's no sequence as to which tops/highs will provide support so you need to have some form of system in place to enhance that judgement and you could test with a small % then pyramid later on as the trading thinking is confirmed (if its confirmed) 

I'm a precision trader - you don't need to do this to make money from the markets, so don't think this is the be all and end all, I post to show you some of the reasons markets turn, reverse and move etc- some people it will sync with, others it won't because of how peoples brains see things

Apologies if some of the above doesn't make sense, I've been interrupt a few times whilst writing this post

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Edited by THT
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No problem thanks for the clarification.  Apologies if you've said before i know this is a long thread now.  If you were presented with a market you hadn't looked at before, roughly speaking how would you decide whether the methods you use would work?  You obviously are somewhat selective about which markets you trade but i don't know if that's just because there are too many or you need specific conditions that are in play.  For example, many markets have been trending up since the start of the pandemic, so I assume having a rough trend in one direction will be beneficial.  Alternatively its not about the trend per se, you just need to see evidence of reasonable swings in either direction.  The conditions we have now will be interrupted at some point but i assume its not back to the drawing board for other methods-these will work on markets showing the right conditions.

 

 

 

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56 minutes ago, u0362565 said:

No problem thanks for the clarification.  Apologies if you've said before i know this is a long thread now.  If you were presented with a market you hadn't looked at before, roughly speaking how would you decide whether the methods you use would work?  You obviously are somewhat selective about which markets you trade but i don't know if that's just because there are too many or you need specific conditions that are in play.  For example, many markets have been trending up since the start of the pandemic, so I assume having a rough trend in one direction will be beneficial.  Alternatively its not about the trend per se, you just need to see evidence of reasonable swings in either direction.  The conditions we have now will be interrupted at some point but i assume its not back to the drawing board for other methods-these will work on markets showing the right conditions.

 

 

 

OK - this is one of my methods, I have more I trade for different market conditions, if there's an established trend in place I'll look for trending set-ups and I'll also look for this on pull backs because it shows up often

I said this before if a method works it is guaranteed to work on every single time-frame and liquid market out there - EVERYONE of them as long as the market is freely traded and liquid

I trade a handful of markets, because I don't need to waste time searching for new opps all the opps will show up in the course of a year on the markets that i trade - you don't need to be trading everything

I prefer to trade the 50% method in bullish markets as you get more umph for your buck, but it can be used in sideways ranges too - see charts below

Lets say that the markets going UP - it hasn't happened yet, but that's what's its going to do following a decent correction/swing low whatever- the market at some point will rally, pullback and then rally again, how much the pullback is, is not known, but that is what its definitely going to do without fail if its going UP - this is what we call an absolute or a given - so all you have to do is devise a plan of action to get in on that trade - how much it goes up by we don't know, hence trailing or having a target

Experience helps a lot here too - in the charts below from swing high #2 I was very very wary of the markets because of the Time Cycle I was watching out for (which never came) so from #2 I just took profits when price showed it was fading (the inside days) - as you can see a triple top formed (Gann says "Sell Double/Triple Tops") so I was highly wary of the Triple top wiping out accrued profits, if a triple top formed (which it did) (I can't short that ETF either in my account but they were good double/triple tops to have shorted)

The ABC pattern is just a fundamental law of the market, it's been present since the markets first started trading and it will be there present until markets stop trading - on every market - people say there's no givens or absolutes in the markets but that is one right there - if the trend is going UP, then that formation will be present - This is the WEEKLY chart of GBPUSD Forex pair from the 1980's - ABC formation present and correct for both UP trending markets and Down trending markets - nothing is new in the markets, its there for you all to discover if you look properly 

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I'll show you 3 50% recent trades on MIDD which is the ETF of the FTSE250 Index - details on chart:

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Inevitably with more info come more questions sorry. Just on the 50% gravity centres. You mentioned having a buy order placed around the 50% level. If you put that there and the market crashes a long way through 50% will that not trigger your order and your stop depending where that is of course? I'm just debating the merits of having an order ready to go at a price e.g. 50% Vs waiting for the market to stop and placing the trade in real time as it turns whether that's at 50% or lower. I've attached an example, excuse poor doodling skills. I've roughly highlighted a daily swing high and roughly 50% level of that swing. If I waited for the price to drop through this then placed a buy order at 50% my stop in this case would have needed to be at the previous swing low I guess to not get hit. This would make my risk/reward approx 1:1 if my target was the top of the previous swing high as indicated. I'm just checking I understand the principle based on my own example as it's easier for me to interpret but probably not for you! Always appreciate your feedback by the way. 1817999696_Screenshot_20210720-224200_IGTrading.thumb.jpg.313918f5c39ebde64338bcddf8129e39.jpg

Edited by u0362565
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9 hours ago, u0362565 said:

Inevitably with more info come more questions sorry. Just on the 50% gravity centres. You mentioned having a buy order placed around the 50% level. If you put that there and the market crashes a long way through 50% will that not trigger your order and your stop depending where that is of course? I'm just debating the merits of having an order ready to go at a price e.g. 50% Vs waiting for the market to stop and placing the trade in real time as it turns whether that's at 50% or lower. I've attached an example, excuse poor doodling skills. I've roughly highlighted a daily swing high and roughly 50% level of that swing. If I waited for the price to drop through this then placed a buy order at 50% my stop in this case would have needed to be at the previous swing low I guess to not get hit. This would make my risk/reward approx 1:1 if my target was the top of the previous swing high as indicated. I'm just checking I understand the principle based on my own example as it's easier for me to interpret but probably not for you! Always appreciate your feedback by the way. 1817999696_Screenshot_20210720-224200_IGTrading.thumb.jpg.313918f5c39ebde64338bcddf8129e39.jpg

Hi

There's no daft questions in trading

Do NOT place the order there in anticipation - it needs to be placed AFTER the 50% level has been penetrated, so that you catch the reversal upwards. If the market does as we expect

The R value is way way more than 1:1 - I've had fantastic double digit R values off the back of this

The move isn't always clean either so sometimes you might need 2-3 attempts for it to work

The key to success is the high R value - don't be tempted to "give it room" If its going to work it'll work, if it doesn't then either the timing is wrong and it'll happen on the next couple of attempts or the 50% level has turned to resistance rather than support etc

I'm pretty sure this has been written about by others out there, I just developed this myself after studying Gann's material 

Look at this recent one for Legal and General stock:

Price gapped down, went down through the 50% level triggering an alarm, set a buy order, price just squeaked through the 50% level and then closed right near the 50% level - triggering the order

a 2.5-3 pt stop was suffice for that (2.5 pt stop shown) 

As you can see it was plenty of room for the trade AND each of those pink lines = 1R, so you can work out what R you'd of made by whatever exit strategy you'd of used

a trailing 2 bar stop would have made 10R 

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Then the next down swing happened and hey presto another 50% level trade:

This went down through the 50% level and then found support lower down which is totally fine, then reversed up 3 bars later, again tight stop and 9R profit 

I've shown the other Gann levels on the chart they have little relevance to price to highlight where price can fall and find support - there's a whole host of traders out there that think resistance levels are key, but they can't explain why price stopped dead at that level which is neither a Gann nor Fibonacci level, If you run the gann levels from the swing low on the chart below all the way up to #B then you will see that price found support on the 50% level of the entire range swing up (not the range from A-B) - the whole premise IS - IF price is bullish then it's going up through that 50% centre and should take out the prior swing high

Then to the right of that chart you can see the swings weren't playing ball which is a warning of a potential change of trend etc 

We have in the space of 2 months on this one chart returns of 19R, lets say you cocked up and only made 12R for whatever reason - if 1R = 2% of account then that's a return of 24% unleveraged - all you've got to do is find a few more markets to be getting close to 100% returns

There are many many people out there selling courses and what not telling you 2% a month is a typical return!

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In this entire thread, you have Gann's 50% level, Secondary Reactions, Double/Triple tops & Bottoms, 4th Time Lucky, Inside swings, lost motion, bouncing bomb ABCDE and the rules to successful trading - I know for an absolute fact that combining and trading those methods on liquid fluid markets can return triple digit % returns every year

 

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Yeah ok i see what you're getting at and yes of course, only put the order in after its fallen through the level not before.  Related to that.  Using your example above, the second swing you mention comes down to the 50% point of not the current swing high but the former, for the current swing high this low level is 100% if this was a Fib.  I'm not familiar with the Gann levels but the point is perhaps that you can't just look at the most current swing, you still need to see the levels calculated from former swings too is what it looks like.  Of course some may just see it as finding support with the former low if we forget levels.. and see that as a reason to trade.

When i mention a target i will actually use a limit order, which i know many will not be keen on because it is profit limiting, but for me if it gets to that swing high and say that equated to 3R or more i'm almost more happy to just bank that and see it as backup money in case trades in the future dont work out, i probably need to change my method to just trail the stop or have partial take profit.  But you can see where i got the 1:1 ratio from in the data i showed, this was due to using the 50% level for entry then putting the stop at the low of the swing, and putting a limit at the high.  If i didn't have the order at 50% but waited for the market to finish its fall then try to get in on it early my stop would still have been at the swing low point but the risk would be lower as i'd entered much sooner than waiting for the market to get back up to the 50% level, does that make sense?

 

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1 hour ago, u0362565 said:

Yeah ok i see what you're getting at and yes of course, only put the order in after its fallen through the level not before.  Related to that.  Using your example above, the second swing you mention comes down to the 50% point of not the current swing high but the former, for the current swing high this low level is 100% if this was a Fib.  I'm not familiar with the Gann levels but the point is perhaps that you can't just look at the most current swing, you still need to see the levels calculated from former swings too is what it looks like.  Of course some may just see it as finding support with the former low if we forget levels.. and see that as a reason to trade.

When i mention a target i will actually use a limit order, which i know many will not be keen on because it is profit limiting, but for me if it gets to that swing high and say that equated to 3R or more i'm almost more happy to just bank that and see it as backup money in case trades in the future dont work out, i probably need to change my method to just trail the stop or have partial take profit.  But you can see where i got the 1:1 ratio from in the data i showed, this was due to using the 50% level for entry then putting the stop at the low of the swing, and putting a limit at the high.  If i didn't have the order at 50% but waited for the market to finish its fall then try to get in on it early my stop would still have been at the swing low point but the risk would be lower as i'd entered much sooner than waiting for the market to get back up to the 50% level, does that make sense?

 

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Hi,

I think you've jumped forward a swing - I'd view that as a double bottom rather than a 2nd 50% support  level, but I see what you've done - the DB failed, then we got a triple bottom and that worked to a certain degree for a few R profit - the aim there would have been the swing high after #C but as you can see the market didn't comply

Yeah I understand but the stop placement is the thick black line - it doesn't make any sense having a stop wider than that, you could but it would just dilute R profits

Sit and think how making 2-3R compared to 8R+ the 8R+ trades offset all those tests that fail and the trades where the market does not comply to expectations

I'm just a simple person, it took me a long time to figure and test and have confidence in the method

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On my charts I have multiple 50% levels of multiple ranges of significance that I monitor too, not saying that they offer any weight, but I like to see visually if multiple 50% levels are aligning 

Take 3 mins to study the chart of the SP500 Index below - Ignore the pink lines - look at the 50% levels - this chart alone speaks a thousand words, although it is advanced for this discussion:

  1. Time Cycle due 
  2. Price falling down into the TC date
  3. Tags the 50% level of a prior major swing range
  4. Reverses
  5. Both counts / TC's
  6. One thing to note is based on historic price advances, its impossible for the market to advance at the angle of trajectory its made since the March 2020 low - its too steep, at some point there's got to be multi-month sideways stalling that forces the angle of advance more in line with it's average angle

People think that Gann is obsolete as he operated in the early to mid1900's - but Gann cracked the markets

I think this chart coupled with the charts above prove the power of the 50% Gann Gravity Centre and its relevance to the markets - I've also showed the 50% level on the 1974 / 2003 and 2009 bottoms when the market hit and reversed

SP500 Index:

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Yeah I see what you mean, I realise higher R is beneficial and the R multiple available is partly down to the market but also your stop distance from original entry. I have to wait for the market to turn, give it a specified amount of time then put in the trade, the amount of growth from the swing low in that time is the R for me. Depending on the market this could be 100 points + so when that is your R the market is going to struggle to give you high r values potentially so 3R looks good from my perspective. Thanks for the feedback again.

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This just happened last couple of days:

50% bounce SP500 Index

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and another ABCDE Bouncing Bomb on Legal and General:

Ignore the #1 and Wave 2 blue box references - no relevance to the Bouncing Bomb method at all, I didn't change the chart from a scan i did the other week

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I appreciate that when you are making a trade you can't see the right hand side of the chart or future price bars - this is where it comes down to knowing your method, having 100% confidence in it as well as the expectancy and why we use stops, some trades simply do not work

THT

 

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Yeah i caught equivalent to the 50% bounce but on DAX, they're all reacting similarly although the SP500 is more bullish than most.  I'm hoping on a full recovery of the dip, SP500 looks to be on target for that-should have traded that index.. The risk i have is 164p, so if the market recovers the dip its about a 3.5R profit if i limit it to recovery of the dip.  If i trail the stop who knows, depends how bullish it remains or not, DAX has been pretty choppy of late.  I'll need to look into bouncing bomb, not really noticed that before.

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18 minutes ago, u0362565 said:

Yeah i caught equivalent to the 50% bounce but on DAX, they're all reacting similarly although the SP500 is more bullish than most.  I'm hoping on a full recovery of the dip, SP500 looks to be on target for that-should have traded that index.. The risk i have is 164p, so if the market recovers the dip its about a 3.5R profit if i limit it to recovery of the dip.  If i trail the stop who knows, depends how bullish it remains or not, DAX has been pretty choppy of late.  I'll need to look into bouncing bomb, not really noticed that before.

Yeah I don't trade or look a the Dax - just the USA Indexes - but they move similar often

Bouncing Bomb example is up in the thread -  example on CNX1 which is the ETF of the Nasdaq100 that returned 29R

Yeah I'm just trying to show all that the markets offer a lot of potential - I came across a pro trader selling courses and whatnot to his facebook followers saying 2% profit per month was the norm, if you get the R value right then you can easily make 5-10+% a month and at some point due to the compounding you get into a position where you don't actually need the money anymore and trading is about beating the market and getting one over it

 

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Yeah well that's a far off pipe dream for me and most probably looking at the statistics, just trying to do better than index tracking investment at this stage, so far its paying off.  Couldn't ever see me having the ability, confidence, constitution or whatever is needed to give up the day job for this.

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Summary of the SP500 50% Gann Gravity Centre trade shown above = 10R profit

ABC forms, with C trading down through the 50% level, set buy order @ 50% level if price trades back up through

Stop would be 13-15 pts, no need for anymore 

Target is either to trail or a simple target of prior swing high

As its earnings season I elected for simple swing high target , trailing a 2BL would have netted 8R, which is not bad either - better than the "aim for a 3R" return the books and educators tell you

Also note all the Indicators were in the buy zone or oversold whatever you wish to call it, as price cut through the 50% gravity centre, which is another way to work with and use Indicators to catch the turns within a bar of the turning point

The trick with this trading method is you have to step out into the road blindfolded - price is crashing/falling and you're there setting up a order to buy the market! as its pulling back - you're either going to be right or wrong and if your risk is acceptable, then its worth the punt - before the trades triggered, you can work out stop position and potential R profit targets - a 5R+ profit is ~ALWAYS worth the punt

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PS - Fibonacci: I'm very very aware of it, after extensive research and testing I don't really use it for retracements or resistance as its got no predictive qualities, with hindsight most market moves can be formed into some form of mathematical form that uses Fibonacci growth sequencing and calculations - knowing which in advance can't be done or I should say I haven't been able to.

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Sorry THT, its me again! Following your posts with interest obviously.  Just wanted to break down that last swing low a bit more.  The R values you quote are of course dependent on your initial distance to you stop loss which if its only 10-15 points could be very high.  I think the key thing i wanted to mention is that you obviously didn't have your stop at the swing low point on Monday 19th and wondered why you felt confident to have it higher.   But this is the sort of thing that can make the difference between someone quoting 3R vs 8R.

I assume as the market moved up through 50% and your order executed you then placed the stop once the market had chance to move above your entry, perhaps after some defined time period.  

I was trading the DAX which unfortunately was not as bullish but managed 2.5R+

 

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Oh just one more thing not related to your post specifically.  How do you feel about trading what are essentially mirror image moves on multiple markets, as often they all follow each other.  Is there a point?  If you're right chances are you're right on all of them, if you're wrong you're wrong on all of them?

Edited by u0362565
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7 minutes ago, u0362565 said:

Sorry THT, its me again! Following your posts with interest obviously.  Just wanted to break down that last swing low a bit more.  The R values you quote are of course dependent on your initial distance to you stop loss which if its only 10-15 points could be very high.  I think the key thing i wanted to mention is that you obviously didn't have your stop at the swing low point on Monday 19th and wondered why you felt confident to have it higher.   But this is the sort of thing that can make the difference between someone quoting 3R vs 8R.

I assume as the market moved up through 50% and your order executed you then placed the stop once the market had chance to move above your entry, perhaps after some defined time period.  

I was trading the DAX which unfortunately was not as bullish but managed 2.5R+

 

Don't apologise, its no problem.

Exactly - its the difference, between an average just getting by system and an exceptional system

There's no logical reason you'd have the stop at the prior swing low - I use 33% of the 20 day ATR + spread for my stops, as you can see in the examples above, they've worked exceptionally well

I don't look at or trade the DAX - what I did was set an alarm for the 50% level, when that was triggered by the time I'd set my order to buy at the 50% level the market was lower, I then waited until the next day until it was executed and then when that went live I logged in to set the stop placement and target

 

 

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7 minutes ago, u0362565 said:

Oh just one more thing not related to your post specifically.  How do you feel about trading what are essentially mirror image moves on multiple markets, as often they all follow each other.  Is there a point?  If you're right chances are you're right on all of them, if you're wrong you're wrong on all of them?

I would only trade one of them if they are similar and you might have to think about doubling up on risk so risking 4% instead of 2 etc - say you trade 2 separate markets each 2% risk and both lost, you lose 4% if they both move similar then to cut down on work/analysis etc its fine to risk 4% on just your preferred market

 

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2 hours ago, THT said:

Don't apologise, its no problem.

Exactly - its the difference, between an average just getting by system and an exceptional system

There's no logical reason you'd have the stop at the prior swing low - I use 33% of the 20 day ATR + spread for my stops, as you can see in the examples above, they've worked exceptionally well

I don't look at or trade the DAX - what I did was set an alarm for the 50% level, when that was triggered by the time I'd set my order to buy at the 50% level the market was lower, I then waited until the next day until it was executed and then when that went live I logged in to set the stop placement and target

 

 

I guess i do it because i see the low point as relative safety and assume the market won't go through it, but this can make the distance from my entry to the low point quite large and hence potential R smaller.  I'll take a look back to see how a % of ATR might have faired.

cheers 

 

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10 minutes ago, u0362565 said:

I guess i do it because i see the low point as relative safety and assume the market won't go through it, but this can make the distance from my entry to the low point quite large and hence potential R smaller.  I'll take a look back to see how a % of ATR might have faired.

cheers 

 

Yeah I can see that - from experience if the 50% level is going to work it'll go through in 1-3 attempts at most which means you can afford a tight stop, but you can use the swing low point, whatever suits you

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OK - I think I'm going to leave this thread here for the time being - its covered a lot

I want to end it on a very very advanced concept - Gann related obviously!

Gann was light years ahead of his time, the below is going to prove this fact, his methods were esoteric and he was beaten to these laws of the world by the Egyptians (you'll see the shape in the images below)

The markets are not doing what you think they are doing - there's forces you are not aware of at work behind the scenes driving prices on ALL markets

This post is to get you thinking - I'm not making any claims, but the other day on a EURUSD thread I did highlight a buying zone of which price has "suddenly" rallied upwards from!

In the chart below we'll look at the 4  points shown on the chart 1-4, because these have been recent major swing points - I want to show you what Gann was thinking and talking about over 100 years ago - I will keep it as simple as possible

This is Gann's "Square of 9" - look at the shape of it on a top down view - its basically the Pyramids! (TIP: Imagine pulling the centre number shown up towards you to visualise the concept)

Basically this is a square root calculator - as you go up or down levels around the sq or 9 you going through increments of square root %'s - there are major intersections of the square and those are shown on the images as the yellow painted sections - north, south, east, west etc - see where price lands on those lines around the major turns

I think we can agree totally, from this entire thread and what I'm showing you below that Gann and his methods have massive significance on the markets and as traders that means profiting from.

 This is EURUSD Daily 585.thumb.JPG.ab6115daf0d9904a45b262d28a86ea1c.JPG

Swing High #1:

OK we get a major swing high price of 12350, this gets inputted into the Gann sq or 9 as the CENTER/PEAK of the square - the calculator then generates all the levels around that price according to the maths of the sq of 9 - see chart

We have NO idea prior which levels "might" cause resistance or support and we don't know when either - what we DO know is that the major intersection in YELLOW "could" do something - the thing is we are aware of these levels well in advance and before price gets near!

So from the top at 12350, prices falls to a low of 11952, then rallies to 12243, then falls to 11835, rallies then falls into the swing low #2 of 11704

I've highlighted the relevant prices on the Gann sq of 9 below for you - EACH swing turn point was 2 pips - 2 pips off the yellow highlighted price levels - take a minute to think about that 2 pips from price levels worked out yonks in advance by a method of a trader from over 100 years ago, that he discovered from studying the Egyptians who built temples to the fact thousands of years prior!

OK coincidence?

582.thumb.JPG.f004c92c346e414154c8b2d7ee7044ab.JPG

Coincidence - I think not, here's the next chart of the swing UP from 2-3

We have a LOW of 11704, rally to 12150, low of 11986 and then the swing high #3 at price level 12266

Again we have price finding support and resistance at price levels within pips of the major intersections on the gann sq of 9

583.thumb.JPG.08cdb5aee350a794470c58abad2085ad.JPG

OK last swing 3-4

High of 12266, low 11847, high 11975, low of 11805

I don't think I need to say anymore

584.thumb.JPG.3e9c8d336f781f0d4b860754705685b4.JPG

From 11805 here's the square of nine numbers to which the market might find support/resistance from (Remember the YELLOW lines are the major points to watch) - IF 11805 is the swing LOW

586.thumb.JPG.bea64a97ab33afbdce3e8b864178dddb.JPG

The square of Nine is more deep than this - the positioning can be important too - for instance 1st gann sq of nine chart above in the post, follow the numbering from the 11835 LOW around the square until you get to the swing 2 low of 11704 - its moved out to the next level but on the same line sequence as the low and up nearly opposite the first low of 11952 and within pips of a major intersection 

I can tell you that most markets adhere to the square of Nine - however, there's a huge amount of things to look at, consider and apply so we won't go any further into this

As with ANY method, do as I've done, test it, if you understand it and it fails, dump it - I could go on showing coincidence after coincidence of the square of nine - I just wanted to show you that there's reasons markets turn at specific points "out of the blue" - you'll get people mentioned support and resistance as throw away comments (usually Fibonacci levels that they don't really understand!) 

Successful Trading

THT

 

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1 hour ago, u0362565 said:

Just wanted to say thanks for creating this thread THT if you're winding it down.  Really interesting to see how a long term trader views the markets.  I certainly won't forget the name WD Gann! :)

Cheers, appreciated

I might update it now and then if something relevant happens but I've covered most of swing & position trading

good luck on your trading journey

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