The key to successful trading, outside of psychology, is TIMING. The best place to enter a trade is at the end of an opposing move, whether this be at the beginning of a new trend or at the end of a correction of an established trend.
There are two important elements to timing. They are TIME and PRICE.
The trader that can predetermine both TIME and PRICE has an advantage, an EDGE if you will, in the markets. There are various techniques available today to help the trader in market timing. One excellent technique was taught by W. D. Gann called TIME/PRICE SQUARING.
Students of Gann may use what is called the SQUARE OF NINE to perform this technique. However, the results are rough estimates that must be 'eyeballed' as best as possible. A better way is by using a calculator and get the exact values you need. However, even doing it by hand can get a bit tedious if you are working on more than one market.
The SOLUTION is our new computer program called SQUARE TIMER v2.3! Very simple and quick to use, you will get results fast.
HOW TO USE SQUARE TIMER v2.3
Locate on your price chart a recent market top or bottom. Use a decent size market top or bottom and avoid any small swings. If price is currently moving in an up trend, use the bottom that started the trend. If the trend is down, use one of the major tops that it started from.
Enter the date and price of that market top or bottom. Then simply enter the day you would like to get SUPPORT/RESISTANCE prices for. This is where we would enter our Fdates because it would be a day we are expecting a reversal to occur. Tell the program whether the market is moving up or down (i.e. Bull or Bear), and the DEGREE of the angle. You can internally create 45-degree squares of price and time, 90-degree or 180-degree squares.
When you select CALCULATE, you'll see the square solutions in the left box and the support/resistance prices in the right box. You can then print them out and use as your reference for timing market turns. This is whether you are a day trader or trade long-term. Consider: If you are a day trader, then each day you would simply enter that day as the End Date to get that day's support/resistance values.
The example above was run on SP500. On 7/18, a market top formed at 1533. Wanting to know all support levels on the way down, I ran this program for each day that I had an Fdate for. 7/28 was within one of our Fdates, so all we had to do was note if price would stop dropping at one of the levels shown in the right box for 7/28. If price moves a few points below a level, always expect it to move down to the next price level you have. Thus, when price moved below 1447.20 by a few points, I will immediately expect further decline to 1424.20. Actual bottom was 1424 on 7/28.
Now price is moving up. As soon as the market bottom formed on 7/28 and moved up a few days, it was time for me to determine where the top may be. Each day I can follow the market up by simply entering the current day into the END DATE box. But the most important prices are those that you get when entering a REVERSAL DATE such as Fdates or some other cycle dates.
As price moved up into 8/9, we could see that price exceeded 1492 by a few points. Immediately I start to look for price to rise to 1500. On 8/9, price topped at 1499.50 before dropping hard for the day.
When price moved below 1492, it wasn't likely to drop all the way down to 1470 (could, but there are likely support prices reached before getting there). It is a good idea to check the other DEGREE settings as well.
Until the market moves down a few days, we continue to use the same market turn for the calculation. Notice by reducing the level down to 45 degrees, we get the support/resistance levels from between the greater price differences. As price broke below 1495 and 1484, both which acted as support during the day (intraday rallies), it finally came to rest on 1480 before it closed.
This program is recommended for those who trade Fdates, our incredibly accurate reversal dates. This program will alert you to the 1/2 square and full square dates where turns many times occur. However, the accuracy of Fdates cannot be beat, and using them as your END DATE is an incredible advantage in trading.
(Free to Fdate Premium Members)