More Channel Interplay: Lines, Channels, Slopes and Gann #CAD

Friends,

Just to expand and bend your mind a little bit deeper into occult market geometries, Here are a couple of definitions we have established as a result of our hidden market geometry studies:


MOMENTAL LINES:

Long-lived lines that maintain relevance and authority over price throughout M5, M15, H4, Daily timeframes ... Note that these lines have a slope, that is a certain value attained over a given number of candles (timeframe), so calling a Fib move at 38.2 per cent is tantamount to saying that price has moved a given height (y-axis is in dollar) over a finite unit of time (here, timeframe in units of candles). Hence, the persistence of these channels throughout time should not be doubted or surprise anyone, since they correlate to Fibonacci moves, hence have a finite and precise slope against which to measure price action, reaction and anticipation.


MOMENTAL LINES vs. GANN:

Now, reaching a bit further in the geometric nebula, one should not have to go too far to understand the survival of abstract concepts such as Gann's "Square of 12" or his "Square of 144", which is used to anticipate top/bottom reversals. These Gann lines have survive injurious ridicules over time, and the seasoned trader will often dig into these readings and find them quite edifying.


MCTs and MCBs:

Another concept we defined in our studies are "Major Channel Top" and "Major Channel Bottom" crossings. The definition provide the explanation here, but it is worth emphasizing that these interplays have a major impact on price, both in terms of forecasting, as well as counter-trend plays. This is not to say that the anticipation of such a crossing point will see price come to it as if under a magnetic force, but instead should alert the trader that attainment of that level may be used to confirm or infirm the current trend characteristics.

One last concept worth exploring is the significance of medians, or minor momental lines confined within the major channel-defining momental lines. These lines are often used to define the current trend, since price seems to act in cognizance of these minor dynamic supper/resistance lines. A price above the top tier or quarter of a rising momental channel should be construed as very bullish, as opposed to a price having fallen from such levels and still maintaining an upward course. The former indicates a strong underlying bullish market, whereas the latter would suggest softening of the market. The trader should then heed the proximity of a MCB, which may indicate a major rallying following price softening, for instance.

Hope this all makes sense.

David Alcindor