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Hi Bill et al,
Glad you find it interesting. I will try to answer your questions. All of
the tools I use for the charts are in SuperCharts and TradeStation. The old
channel in this case is the the same angle as the 1x8 Gann angle drawn in
the downward right direction. After there was enough information to draw a
new channel, I used the Linear Regression tool to get the "best fit" and
matched it up to the 1x8 Gann Angle. That line was lined up with the pivot
point (on 9/1). The width is based on Standard Deviations and then matched
up to the real deviation of the data. Usually 2 Standard Deviations over 30
days is used. The new channel is also a 1x8 channel in the upward left
dirrection. Naturally as price moves through time it moves toward the 1x1
angle. A large channel can be drawn around the 1x1 and other angles as well.
I use a confirming signal based on the ADX and certain price criteria before
I jump in. If I were to trade it, I would buy the SP for example if it went
above Fridays high but I would be very careful with my stop or better yet
protect with put(s).
So that no one jumps to a wrong conclusion I am not a vendor and have
nothing for sale. I think that the angles are interesting as well as being
useful to me. I thought I would post some SP charts with the angles because
the index has something in common for many traders weather they trade
stocks, bonds or what have you. Putting up a Canadian Dollar chart wouldn't
mean much to very many.
As a writer I'm sure you know how hard it is to tell someone how to do
something without being able to personally show them. The technical reading
is about as interesting as reading the dictionary. On top of that I continue
to learn more about this method of analysis all the time. Thanks for your
interest.
Prosper
> Very interesting chart. While I don't pretend to understand how the Gann
lines are drawn, I can see the logic - if that is the word - behind the
placing of the lines, but how do you come up with the channel?
> What is the rationale behind it? Why is it the width it is and what are
the
parameters compared with drawing 'ordinary' channels? Perhaps the lines
are
too close together for me to see, but I would be interested. Certainly
the
channel you have drawn is an interesting one, which correlates very well
with the huge downthrust in the Dow. Been so used to punting puts,
perhaps
the time has come to kick a call...!!!
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