In the last days I read an interesting old book: "The Ultimate Breakthrough in Market Turning Point Detection" from Jeffrey Cuddy:
----------------------------------- Description of The Ultimate Breakthrough in Market Turning Point Detection
The 'first of its kind' unique trading book introduces the author's specialized turning point detection method, known as PAMA - the Pivotal Area of Market Analysis. Using a small but powerful arsenal of new technical techniques, PAMA monitors the market daily, then steps up its analytical focus when a potential turn zone is detected. Once that Pivotal Area is confirmed (which is done in real time) the method turns to eight conclusive price patterns and two original charting techniques to identify the ideal entry or exit day for your trade. The accuracy of PAMA's trade signals - recently described as 'coming close as is humanly possible to calling every major pivot point' - is unparalleled.
Jeff Cuddy's presentation of the PAMA Method is laid out in precisely the same sequence as his original creation (and subsequent application) of this brilliant trading idea.
- In Section I the inner working so the system are spelled out - each rule, price pattern and chart-based technique.
- Section II pits PAMA against the stock market. Walk-through examples illustrate the method and action trading the Dow from 1987 to 1995 (a period in which PAMA nearly doubled the return of 'buy and hold'.)
- Section III concludes the book with a detailed analysis of PAMA applied to Jeff Cuddy's current area of interest - the futures markets.
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- I have tried to programe the grids using the default GridGann in Metatrader. If it gives visual problems after drawing the grids, restart the indicator.
- The main grid has default 36 squares between the high and low of the analysis interval, and the space between the GannGrids is default 8. You can draw all 36 grids, or only the main grids (every fourth).
With this formula, we have for every pair or for every time frame, the same visual scale for trend analysis!
I think the indicator is very suitable for long term trading: you can print the charts, analyse the up and down channels, draw the trading levels and track the orders.
To develop a trading system with this indicator, first search the web for information about the GannGrids.
The basic idea is to determine if the prices reverse for example from an up-channel in a down-channel (45° channels). The stop losses can be placed four squares above the purchase price.
I would be glad if someone uses the system in practice and would like to report his experience!
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--------------------------------------------------------- This is a difficult book to review. And difficult to read.
It is a thin book (only 155 pages counting the index and lots of white space, also big printing and full page graphs) but it may not be gutless. Jeffrey is pushing something he calls the PAMA Method (Pivotal Area of Market Analysis) and he may have something there.
But trying to read the book is like sawing hardwood with a disposable plastic knife. I still scarcely know what the hell he is saying, and believe me I have tried.
He may well be offering something of value but it is bloody difficult to understand what. The first part of the book is just simply badly written and the last part I've never gotten to even after several attempts. He spends a lot of time developing arcane laws and conditions (and sub-laws and sub-conditions) that may sometimes work for him but to claim them as the "Ultimate Breakthrough" well....
I would like to encourage a serious student to buy this book and then elucidate it to me or study it together because I still believe there may be something in it. But if you want a holy grail or an easy read to riches, this book ain't it!
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As for my opinion, sure I understand what is in the book, otherwise I would not want and can to program an indicator for PAMA...
I think because no was able to understand and apply the system , there is the book at amazon to buy for a few cents!
I wrote in posting #1 "The basic idea is to determine if the prices reverse for example from an up-channel in a down-channel (45° channels). The stop losses can be placed four squares above the purchase price."
To give more explanations I have unfortunately now not the time. I must programe other matters...
I have also not tested longer the indicator because it was done only for today!
Thank you for the "PANAMA" idea - seems to be a clear line. I have booked one just now and have to wait till it will be shipping to Switzerland.
Sounds good: "PANAMA" - Pivotal Area of Market Analysis.
Hope find time to read it right away after physical delivery.
Mensch, es gut zu wissen dass wenn ich weiter mit meinen Indikatoren spinne, kann ich mich bei Dir fachmänisch und mit Verstand für meine Vögel behandeln lassen...
If you've read the book, perhaps explain to me what I've programmed!
Yes, you are right, the correct name is "Pivotal Area of Noise Market Analysis".
Gann grids are used by traders to:
- analyze strength of trends;
- predict trend changes.
Traders can enter long positions when the price break above an ascending line.
Thanks @eTrader for your contribution!
If you know this theories and can give our members few analysis would be very good.
- My problem is that the entry should be the other way around!
If the prices moves in an down-channel, and the price break above a descending line, you can enter long !!! Breaking of ascending lines is then only a trend continuation.
I don't know other systems with GannGrids, only the book by Cuddy, and I quoted that no one has understood the system. (I think I have understood, but it may be wrong...)
Gann Grid represents trends built at the angle of 45 degrees (Gann Lines). According to Gann’s concepts, a line having a slope of forty-five degrees represents a long-term trendline (ascending or descending). While prices are above the ascending line, the market holds bull direction. If prices hold below descending line, the market is characterized as a bear one....
Thanks @Forexcube!
The problem with the default Metatrader GannGrids is that only specialists know what they're doing...
With the indicator we have standardized charts, and we must try to interpret these charts.
May I suggest the option to color the up and down channels differently?
You can see the attached image for an example.
Thanks,
Kostas.
__________________ "All human actions have one or more of these seven causes: chance, nature, compulsions, habit, reason, passion, desire" -- Aristotle
May I suggest the option to color the up and down channels differently?
Sorry, this is not possible because I use the internal Metatrader GannGrid tool.
You will see later, is better so with gray lines:
- First, you must exercise the eyes to identify the cannel-lines and follow the lines with the eyes,
- Then you identify the turn points. It gives the simple and evident identification, and an identification with translation...
After these exercises, you will self draw some lines or arrows in the chart ignoring the grids, and so colors would be superfluous.
PAMA GannGrid System
PAMA GannGrid System
Gann Grid concept
" -- Aristotle
