W.D. Gann called all straight lines on his charts "angles". In keeping with his definition, XLAngles provides "must have" straight line technical analysis techniques.
When I build a spreadsheet I keep it for months and even years adding new data as it becomes available. Maintaining my charts would quickly become a burden if I had to adjust each line every time I resized the chart or added data. Also, with the drawing tools it is impossible to know for sure if your lines start on or pass through the the actual highs and lows you are aiming for.
As with all XLTrader add-ins, the tools are accessible from a toolbar which can be seen when a chart page is selected. We click on the points of interest (H, L, C etc.) with our mouse and the program draws the lines. Its quick and easy! But more importantly, all lines are mathematically defined and remain perfectly positioned when you need to resize the chart. Once you've created a spreadsheet, you can save it using any name you like and it will be there exactly like you left it the next time.
XLAngles calculates the value of the trendline at each point. The numbers are stored in a column (column H in the figure above) on the "data" page of the HLC_Chart template. After it calculates the numbers, the software pastes the value in all but the last cell in the column to avoid spreadsheet bloat. We leave the formula in the last cell so later when you append more data to your spreadsheet, you can simply click-and-drag the formula down to extend the line on the bar chart.
XLAngles gives you three ways to define a trendline:
1. You can click on any two points on the chart (H, L, or C)
2. You can click on only one point and enter the slope of your choosing into a dialog box.
3. parallel offset: first select a trendline, then select a point. A line parallel to the one you selected is drawn through the point you select. Parallel offset also works with all the other lines generated by XLAngles with the exception of the 3 point CIT, 4 Point CIT and cube Point features that described below
As with all XLTrader add-ins the program then automatically draws the new trendline.
Swing Charts have been added to XLAngles. There are a variety of Gann swing charts and you can plot a zigzag swing chart based on either Percent Change, square root or a fixed price. With the Gann style swings you can show them compressed (like the image above) or on top of price. You can also require sequential bars to trigger the swing.
Andrews Median Lines
Median lines are one of the most powerful straight-line TA techniques out there. For more history on median-lines, you can click here to read about Roger Babson and his student/protg Alan Andrews, inventor of the median-line.
Three points define a median line:
1. A major low (high)
2. A subsequent high (low) and lastly
3. The final low (high)
These three points define three lines, one of which bisects the line defined by the last two points. The other two lines are parallel to the bisect or "median-line" but they run through the second and third selected points. The result often looks like a three pronged pitchfork and that is what some people choose to call it.
XLAngles takes advantage of Crane's discovery. In addition to the three standard lines we associate with a pitchfork, the software draws a fourth line, the reaction line. In total, 4 columns in the spreadsheet are taken up by one pitchfork. Like the trendline, formulas are only left in the last cell of each column.
Schiff Median Lines
Another modification to the median line technique was introduced by a man named Schiff. Instead of drawing the median line from the first low (high), he starts it from the midpoint of the line between points 1 and 2. This results in a set of lines that are "less steep" that the standard median line.
Gibbs Median Lines
"Each TOP or BOTTOM in Wheat, or other Commodities, comes out in accordance with an exact mathematical proportion to some other TOP or BOTTOM."
W. D. Gann, How to Make Profits in Commodities, p. 32
Gibbs Median Lines are my own invention. They require that only a top and a bottom be be selected and that you know the appropriate scale of what ever it is you are trading. The chart above is of the S&P 500 and has a scale of one point per trading day. Like with the other features in this add-in, to avoid bloat, formulas are only left in the last cell of each column. Gibbs Median Lines are not available anywhere else, they are unique to XLAngles.
Dynamic Gann Lines
Don Fisher invented a powerful technique based on the concept of "squaring" price and time first introduced by W. D. Gann. He call's his invention dynamic gann lines or DGL for short. Don sells a manual which explains what they are and how to trade with them and membership in his DGL Yahoo! group is included in the purchase price.
XLAngles includes a DGL module for people who have purchased Don's manual and know how to use them. However no further explanation will be given. If you want to know how best to use DGLs you should buy Don's material like I did.
Gann Angles are incredibly easy to put on with the XLAngles addin. All you do is click on a point (H, L or C). A dialog box asks you to specify if you want trending up or trending down and you can choose to keep or omit any angles you want. The number of columns in the spreadsheet that get filled depends on how may Gann angles you choose. You can also specify a scaling factor if required via a drop box which has the typical chocies or you can type in one.
Speedlines are defined by clicking on 2 points: A low (high) and high (low). The vertical space (price range) is divided to define two additional trendlines in addition to the one defined by the two points that were selected.
XLAngles lets you specify if you want to divide the vertical space into thirds (which is tradition) or into Fibonacci increments. If you choose the "standard" speedlines, you get lines having slope equivalent to 0.666 and 0.333 times the slope between the two selected points. If you choose the "fibonacci" speedlines, you get lines having slope equivalent to 0.618 and 0.382 of the slope between the two selected points. Both methods are effective. You should try both on your chart to see which works better for what ever it is you are trading.
3 Point CIT
The 3 Point CIT pattern draws a trading channel and a projected CIT in the future (which is indicated by a vertical bar). (Obviously) It takes three points to define a 3 Point CIT. The first 2 points define a line, and the third point defines a price objective. When the line reached the price objective, (often times) a CIT will occur. With XLAngles point 3 can occur before, between or after points one and two. It does not matter to the software. However, usually point 3 is a high (in an uptrend) or a low (in a downtrend) that occured in between the first two points.
The 4 point CIT is a more complex pattern. When you see a wedge developing, the 4 line CIT may be appropriate. Lines are drawn between point 1 and 3, 2 and 3 and 1 and 4. With the XLAngles point 4 can occur before or after point 3… it does not matter.
The point where the lines intersect in the future (see figure) indicates a time when a CIT can be expected. The trendlines often prove useful for anticipating CIT's as the pattern develops. It takes a bit of practice to spot 4 point CITs, but when you do, they are good profit opportunities.
The "geometry of markets" never ceases to amaze me. Here we are dealing with a series of equilateral triangles (where all three sides and all three angles are the same). The length of a side and the orientation of the cube is determined by the two points selected which are typically a high and low. The apex of the cubes gives an indication of where a CIT can be expected.
There is one complication wth the cube method… as with Gibbs median lines, you must know the scale that is appropriate for your market. The chart above shows cubes for the S&P500. Notice how often highs and lows were correctly timed by the projections? This is typical. The cubes are perfectly symetric in the chart above but since they are mathematically defined, they will look skewed (as is appropriate) should we later resize the chart.
Time Square Price
Many "market geometers" watch for trend changes when time squares price. But what exactly does that mean? There are many ways in which time can square price.
PRICE SQUARES TIME WHEN…
When price units in the trend equal the time units in the trend (1x1 angle) When base price equals time units in the new trend When prior price range equals time units in the current trend When prior time units equals price range in current trend When price equals time units from prior change in trend (zero angle)
This module allows you to click on two points from an earlier price swing and draw the angles where price would square time in the current swing. When you observe a CIT occuring at one of these angles, chances are good, it is for real.