Breakthrough Strategies for Predicting Any Market: Charting Elliott Wave, Lucas, Fibonacci, Gann, and Time for Profit, 2nd Edition

CHAPTER 10

Squaring of Price and Time

As you know, the original inspiration for the first edition came about in 2005 and 2006 when I saw many traders attempting to short markets based on early MACD signals. In the very least, I wanted to introduce market timing to people who used other methodologies or had no idea markets could be timed. After all, the mantra in the industry was that markets were random and one had to be invested all the time if they were to catch the biggest 6 to 10 days out of the year. My thought process at the time was if people were going to use lagging indicators, at least they ought to be able to make sense of it by applying time windows to the process.

A lot has happened in our work since that time. We’ve gone to a pure pattern-recognition-based methodology for both our newsletters and trading strategies. I’ve done a lot of research into Gann methodology and found that when it comes to timing markets, a key ingredient to the recipe is one of Gann’s greatest discoveries. I’m not saying this; Gann is quoted as such in his famous course on markets. Gann said his most important discovery when it comes to financial markets is the squaring of range and time.

In fact, we found that as important as the time windows are, they don’t always fire off. This was very perplexing at first but I dug deep and wanted to find the reason why markets didn’t always kick in on our Fibonacci- or golden spiral-based windows. We also found that some did fire off at 61 or 161 or 89 ...