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Attachments: Analysis and Trading based on Envelopes, Waves, Cycles
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Analysis and Trading based on Envelopes, Waves, Cycles

  • #321
  • Dec 16, 2017 11:19am Dec 16, 2017 11:19am
Quoting parisboy
{image}
Thank you again for spreading the word on Hurst Analysis

Could you briefly explain what this chart is supposed to suggest?

To me, the depicted situation is one where a 1 minute chart does not suffice on its own, but where a 5 minute chart is more relevant for trade planning.

And in general I find the 1 minute chart less useful for execution, so for me the way to go is 5 minute chart for creating a plan, and a faster chart for entry - and then the faster chart need not necessarily be equipped with the three channels, as one is effectively trading off the 5 minute chart.

Thoughts on that?
  • #322
  • Edited 7:38pm Dec 16, 2017 6:34pm | Edited 7:38pm
Quoting medici
{quote} Thank you again for spreading the word on Hurst Analysis Could you briefly explain what this chart is supposed to suggest? To me, the depicted situation is one where a 1 minute chart does not suffice on its own, but where a 5 minute chart is more relevant for trade planning. And in general I find the 1 minute chart less useful for execution, so for me the way to go is 5 minute chart for creating a plan, and a faster chart for entry - and then the faster chart need not necessarily be equipped with the three channels, as one is effectively...

Well Medici I agree that it is better to use together as a pair a 5 minute chart and a 1 minute chart. I will post examples later

you can compare this pair as an another one a dayly chart and a weekly chart ( a week = 5 trading day)

never forget all are points on a sheet of paper or a chart
  • #323
  • Edited Dec 17, 2017 3:57am Dec 16, 2017 7:11pm | Edited Dec 17, 2017 3:57am
Quoting medici
{quote} Thank you again for spreading the word on Hurst Analysis Could you briefly explain what this chart is supposed to suggest? To me, the depicted situation is one where a 1 minute chart does not suffice on its own, but where a 5 minute chart is more relevant for trade planning. And in general I find the 1 minute chart less useful for execution, so for me the way to go is 5 minute chart for creating a plan, and a faster chart for entry - and then the faster chart need not necessarily be equipped with the three channels, as one is effectively...
Medici let's me comment the chart and "milk" all the informations available

a) the parameters

Envelope 32 TU (blue) Amplitude is 2 x 7.8125 = 15.625 points
Envelope 128 TU (ocre) Amplitude is 2 x15.625 = 31.25 points
Envelope 256 TU (brown) Amplitude is 2 x31.25 = 62.5 points

b) visually we can confirm that most of the short term fluctuations take place within the Enveloppe 32 (blue ) - roughly +/- 8 points around the Centered Moving Average 32 TU

c) in the left side of the chart we observe that :

DAX Price Action is often under the Envelope 32 TU (blue)
Envelope 32 TU ( blue) then shortly later Envelope 128 TU (ocre) are under the lower limit of the Envelope 256 TU (brown)

these facts are the graphical expression of the Downtrend pressure

d) then price, the lower Limit of the 32 TU Envelope (blue) and the lower limit of the Envelope 128 TU (ocre) reintegrate the Envelope 256 TU (brown)which is now flat

this shows the "Return to the mean or average" the down impulse move has been progressively absorbed

The "mean or average" here is the Centered Moving Average 256 TU (brown)

e) the down impulse move having been absorbed DAX Price Action fluctuates now between the Lower Limit of the Envelope 256 TU (brown) and the Centered Moving Average 256 TU (brown)

either 31.25 points of Amplitude or +/- 15.625 points around the Centered Moving Average 128 TU (ocre)

f) you can observe that the lower limits of Envelopes 128 TU (ocre) and 256 TU (brown) are more or less parallel , very close and tending to merge. Same thing for the Centered Moving Averages 128 TU and 256 TU.

This reinforces their strenghth and effectiveness as a Support or a Resistance

g) let's suppose that price action breaks the Zone Centered Moving Averages 256 and 128 TU

then you are in "open territory" up to the Upper Limit of the Envelope 256 (brown) - you can expect an Up move of 31,25 points.

Your are in "open territory" because there is no more Resistance Up to the Upper Limit of the Envelope 256 TU (brown)

This allows you to estimate if you enter or not in a Long Position and to estimate your Risk Ratio

h) let's suppose that DAX Price Action breaks the Zone Lower Limits of the Envelope 256 TU (brown) and 128 TU (ocre)

you can use the scaling 7,8125 / 15.625 / 31.25 / 62.5 to analyze the price action and decide to enter or not in a Short Position

you can also use the scaling to position your Stop Loss Level tight or loose
Attached Image (click to enlarge)
Click to Enlarge Name: DAX 11 15 DECEMBRE 2017.jpg Size: 195 KB
  • #324
  • Dec 16, 2017 11:25pm Dec 16, 2017 11:25pm
Trade analysis using envelopes is great But winner can ONLY be had if you know where and how to trade it. If not entry, exit and stop losses will always be the biggest problem. Been there and did it years ago. Truth will set one free and be merry if pointed the way. First and last post for me here.
Cheers

GS
  • #325
  • Dec 17, 2017 3:04am Dec 17, 2017 3:04am
Quoting parisboy
{quote} Medici let's me comment the chart and "milk" all the informations available a) the parameters Envelope 32 TU (blue) Amplitude is 2 x 7.8125 = 15.625 points Envelope 128 TU (ocre) Amplitude is 2 x15.625 = 31.25 points Envelope 256 TU (brown) Amplitude is 2 x31.25 = 62.5 points b) visually we can confirm that most of the short term fluctuations take place within the Enveloppe 32 (blue ) - roughly +/- 8 points around the Centered Moving Average 32 TU c) in the left side of the chart we observe that : price is often under the Envelope 32 TU...

Thank you very much for taking the time to spell out the details. That all makes sense, and is similar to my thinking Friday morning.
  • #326
  • Dec 17, 2017 6:02am Dec 17, 2017 6:02am
Quoting genghistar
Trade analysis using envelopes is great But winner can ONLY be had if you know where and how to trade it. If not entry, exit and stop losses will always be the biggest problem. Been there and did it years ago. Truth will set one free and be merry if pointed the way. First and last post for me here. Cheers GS
I appreciate the fact that it is your last post here

Cheers
  • #327
  • Dec 18, 2017 3:57am Dec 18, 2017 3:57am
DAX this morning GAP UP + 89 points

Parameters = 31.25 / 15.625 / 7.8125
Attached Image (click to enlarge)
Click to Enlarge Name: DAX 11 18 DECEMBRE 2017.jpg Size: 174 KB
  • #328
  • Dec 18, 2017 4:02am Dec 18, 2017 4:02am
DAX 5 Days : 5 minutes

Parameters are 125 / 62.5 / 31.25 - 4 x the parameters in 1 minute
Attached Image (click to enlarge)
Click to Enlarge Name: DAX 55 18 DECEMBRE 2017.jpg Size: 201 KB
  • #329
  • Dec 18, 2017 4:09am Dec 18, 2017 4:09am
DAX 24 H / 1 minute

Parameters 62.5 / 31.25 / 15.625
Attached Image (click to enlarge)
Click to Enlarge Name: DAX 112 18 DECEMBRE 2017.jpg Size: 186 KB
  • #330
  • Dec 18, 2017 4:30am Dec 18, 2017 4:30am
a "correct" scaling is the key

Division by 8 of the "correct" interval of Price in relation with the adequate Time Unit is the graphical expression of the Gann Time Price factor

this way you get a new look on your chart. The methodology is "robust, but not bad" would have said Jim Hurst

This morning we had a GAP UP of 89 points on the DAX - roughly 150 % of the previous Envelope 256 TU parameters (62.5) or 75 % of the new one (125)

This means that "Cycles" (the Force(s) which move the Market) work 24/24 , week-ends and holydays included.

Then this "week end work" or "night work" has to be absorbed to establish a new balance
  • #331
  • Dec 18, 2017 6:57am Dec 18, 2017 6:57am
Quoting parisboy
a "correct" scaling is the key Division by 8 of the "correct" interval of Price in relation with the adequate Time Unit is the graphical expression of the Gann Time Price factor this way you get a new look on your chart. The methodology is "robust, but not bad" would have said Jim Hurst This morning we had a GAP UP of 89 points on the DAX - roughly 150 % of the previous Envelope 256 TU parameters (62.5) or 75 % of the new one (125) This means that "Cycles" (the Force(s) which move the Market) work 24/24 , week-ends and holydays included. Then this...
Well put

I've made the same observation that all hours of the day and night matter, but I find division by 4 to reveal some interesting things.
  • #332
  • Edited 8:05am Dec 18, 2017 7:34am | Edited 8:05am
Quoting medici
{quote} Well put I've made the same observation that all hours of the day and night matter, but I find division by 4 to reveal some interesting things.
Medici could you post some examples with the division by 4 and what it reveals according to you.

I have some ideas about the division by 4.
  • #333
  • Edited 9:08am Dec 18, 2017 8:11am | Edited 9:08am
Quoting parisboy
{quote} Medici could you post some examples with the division by 8 and what it reveals according you. I have some ideas about the division by 4.
On my charts I have four channels, separated by factors of four in time and two in amplitude. Then, when I change the time by a factor of four, the same setup of channels fits the market perfectly again - so 15 sec, 1m, 4m, 16m, 64m, 256m, ...

What this reveals is why the market is (a) locally statistically Gaussian (because of the time scaling in relation to volatility scaling), and (b) AR(1) in terms of local correlation structure (because it follows the channels).

YET, the market is neither a Gaussian process nor an AR(1) process, and the four channels explain why. In other words, it gives an accurate description of the multifractal structure of the market.

And if one thinks about it, this also tells why the markets can be traded profitably while Gaussian processes cannot, and why it can be traded more profitably than a randomly generated AR(1) process which will suffer from trends of random length, whereas the multifractal trends are predictable in length.

There's more to it if one goes into detail, but that's the gist of it.
  • #334
  • Edited 10:04am Dec 18, 2017 9:10am | Edited 10:04am
If we use the "Murrey Maths" description we can divide by 8 a price interval - the Gann division - and affect to each value line a signfication , a "weight"

The division by 8 gives us 9 Horizontal Lines

The strongest are :

0/8 = Baseline
2/8 = Pivot,Reverse
4/8 = Major Support and Resistance - Center of Gravity
6/8 = Pivot, Reverse
8/8 = Ultimate Resistance

Hereunder Interval is : 15.000 / 8 = 1.875 points
Attached Image (click to enlarge)
Click to Enlarge Name: DAX HORIZONTAL PRICE LINES.jpg Size: 151 KB
Attached Image
  • #335
  • Edited 9:54am Dec 18, 2017 9:28am | Edited 9:54am
Quoting parisboy
If we use the "Murrey Maths" description we can divide by 8 a price interval - the Gann division - and affect to each value line a signfication , a "weight" The division by 8 gives us 9 Horizontal Lines The strongest are : 0/8 = Baseline 2/8 = Pivot,Reverse 4/8 = Major Support and Resistance - Center of Gravity 6/8 = Pivot, Reverse 8/8 = Ultimate Resistance {image} {image}

MMLs I like

And today DAX has left the MML range of the recent days (The green line is MML4, and the yellow ones are 0 and 8. Having a couple more outside is helpful).

This means that the MML octave will increase to 57.5 points in width tomorrow with upper yellow at 13456, and the "extra" lines reaching to an all-time high. Next few days until Christmas will be interesting.

If one may hazard a guess it'll be consolidation of the strong move Friday and Monday tomorrow, and then on Wednesday a push towards the sky. My four factor model suggest a top around 13600.
Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2017-12-18 at 16.26.57.png Size: 100 KB
  • #336
  • Edited 10:04am Dec 18, 2017 9:52am | Edited 10:04am
another way to solve the problem : Interval is 10.000 / 8 = 1.250 points
Attached Image (click to enlarge)
Click to Enlarge Name: DAX HORIZONTAL PRICE LINES 2009- 2021.jpg Size: 150 KB
  • #337
  • Dec 18, 2017 10:00am Dec 18, 2017 10:00am
Or this one : Interval = 5.000 / 8 = 625 points

Notice that 625 is 1250 / 2 or 1875 / 3 so that everything is connected through Harmony or Harmonics
Attached Image (click to enlarge)
Click to Enlarge Name: DAX HORIZONTAL PRICE LINES 2016- 2018.jpg Size: 151 KB
  • #338
  • Dec 18, 2017 10:19am Dec 18, 2017 10:19am
A Gann "Angle" vision
Attached Image (click to enlarge)
Click to Enlarge Name: DAX ANGLES 2016-2018.jpg Size: 188 KB
  • #339
  • Edited 11:11am Dec 18, 2017 10:45am | Edited 11:11am
May be a better vision of the DAX Ascending Zone of Hesitation (fluctuating above and under the (1x1) Angle - 1 Price unit x 1 Time Unit - whose Gann tells us that this is the place where Time and Price are balanced (even shortly)
Attached Image (click to enlarge)
Click to Enlarge Name: DAX ANGLES 2016-2018 COLORED.jpg Size: 190 KB
  • #340
  • Dec 18, 2017 11:13am Dec 18, 2017 11:13am
Quoting parisboy
May be a better vision of the DAX Ascending Zone of Hesitation (fluctuating above and under the (1x1) Angle - 1 Price unit x 1 Time Unit - whose Gann telles us that this is the place where Time and Price are balanced (even shortly) {image}
Agreed. And using candles or bar charts gives some further useful clues.
Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2017-12-18 at 18.10.14.png Size: 231 KB
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