PAMA GannGrid System

It is interesting how a system vendor has allowed itself without asking to offer the system, it is right for free...

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Hi Gann-Experts,

here a nice indicator for trend analysis!

In the last days I read an interesting old book: "The Ultimate Breakthrough in Market Turning Point Detection" from Jeffrey Cuddy:

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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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Oooooooooooo nice, will be testing soon......

New Version PAMA GannGrid_v3

A small improvement in the code, and write the prices on the main grids.
The comments may be off.
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can you please tell us how to use this indicator.

Thanks,
Prakash

thank you very much, Alero ... you're always so friendly

if you could explain a little more ... the truth is I do not understand.

greetings.

This is realy a problem! Maybe user with experince and knowledge on using Ganns ideas can give more explanations...

I quote a customer review from amazon site:
http://www.amazon.com/dp/0930233611?...89&camp=211189

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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!

I fixed the bug with CPU consumption,
and hier ist the new version PAMA GannGrid_V3.1

Please replace the old version who freezed the computer...
.

:-)

Gann Grid concept

Gann grids are used by traders to:
- analyze strength of trends;
- predict trend changes.

Gann grid is used for squaring up time and price.
It is based on the Gann line, the 45 degree or 1:1 Gann line, which shows a strong long-term trend.

It is an easy to follow indicator for:
- investors,
- long-term traders,
- swing traders.

Gann grid is a set of 45 degree lines plotted over a price chart.

Price above one of these ascending lines (better if it touches it in one or more points): strong bullish movement.

Price below one of these descending lines: bearish movement.

Intersection of one line: the basic trend is broken
Price intersects more than one line : beginning of a new trend.

Traders can enter long positions when the price break above an ascending line.

Traders can exit trades when prices break below a descending line.

Traders should also use:
-Fibonacci tools
-Volume indicators
to confirm trend strengths and changes.

eTrader,

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".

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...)

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.

http://www.tradingfives.com/square_of_nine_charts.htm

http://4xcycletrader.blogspot.com/20...technique.html

Swingman,

May I suggest the option to color the up and down channels differently?
You can see the attached image for an example.

Thanks,
Kostas.

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.

Preferred Trades:

EURJPY, Daily, 2010 January 22:
P1 (Enter Short), P2 (Enter Long), P3 (Enter Short), P4 (Enter Long), P5 (Enter Short), P6 (Enter Long), P7 (Enter Short), [P8 Enter Long, to align the first peak of the hill before] or P9 (Enter Long), [P10 (Exit)], P11 (Enter Short), P12 (Enter Long), P13 (Enter Short), [or later at P23 Enter Long, to align the first peak of the hill before], P14 (Enter Long), P15 (Enter Short), P16 (Enter Long), P17 (Enter Short), P18 (Enter Long), P19 (Enter Short), P20 (Enter Long), P21 (Enter Short), [P22 – Exit]

Followup at 2010 January 23 3:20 GMT +1
But it isn't the best way. You couldn't say that in buy zone you execute the sell trades or in sell zone you execute all buy trades. This chart doesn't show that the market price could break the negative line which is one of the last highest peak and is going in the buy zone and so it doesn't show that after a break of the negative line we have to set a positive line of GG at the lowest valley where the market price could break through lines and could go in the sell zone.


[P8 - Enter Long], [P10 - Exit], [P22 – Exit]: are'nt compliant to rules. I would trade in this form just for my trading practice.

Bar route before P8/P9 and candle line between P16 - P18 shows indifferent candles, may be suspend the forex trading in this market situation or switch at a lower timeframe.

Personal rating:
EURJPY, Daily chart: PAMA-method seems to be excellent for making a regular profit acceleration.

I think you're really on a good path to apply the indicator!

In the book you will find complicated rules, but I try also for me to make a simple set of rules. I had not the time to study the system, because it can without a chart with grids not properly see the reverse points.

What you must know is that in a down-channel like after [P7], you draw a help line below new Lows, and with the distance of the channel lines the parallel line, to identify the down-channel breakout.
After [P6] you see the same procedure for the up-channel.

Sure that the reverse points identifies only possible long/short trades, and we need some rules to confirm the entrys, to set the stop-losses, or to trail the win trades.

Today I had not the time, but I've found that if we identifies in a higher time frames reverse points, the trading in a lower time frame with the same charting rules is fairly certain.
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Maybe help in your analysis to have other two indicators which I use sometimes.
- The one identify the lewels who the trading machines make a pause and decide the next price move...
- The other identify the hook bars, with reverse trading potential. (Also causes from the trading machines...)
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In Gann Grid there are two types of lines.

Finding Zone
- Positive Line (low to high) Set a positive line at the last valley and monitor if market price will break this positive line. At this point where the positive line would be broken, the sell zone is starting.
- Negative Line (high to low) is setting at the last high peak and the buy zone starts for if the market price will break through the negative line.

This zone shows us if the market is either in the buy zone or in the sell zone. It doesn't mean to make a market order or execute a trade at this "line" of entry area.

Definition
Lower-High (L-H): Curent peak price is lower than last peak price. (Often seen in the Sell Zone)
Higher-Low (H-L): Current valley price is higher than last valley price. (By a majority in the Buy Zone)

See further more details:
http://www.forexfactory.com/showthre...ght=GGG&page=2

Gann Angles are drawn between a significant bottom and top (or vice versa) at various angles.

The most important by Gann, the 1 x 1 trendline signifies a bull market if prices are above the trendline or a bear market if below.

Prices should then be expected to fall to the next trendline (the 2 x 1 angle).

As one angle is penetrated, expect prices to move and consolidate at the next angle.