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# Cables natural S/R levels using square roots!

FX:GBPUSD   British Pound/U.S. Dollar
917 25
Hello all,

Today's square             root idea is not new ( re: William Dunnigan ), however what is new is that I have worked it out on cable by unearthing it's unique multiple (0.0625). In this example I am applying it to the LOW 1.45648. Once you suspected that this low was going to hold for a while the S/R lines could have been easily generated using a calculator and a pencil. This can also be applied to a bear market ( subtract instead ), and the multiplier is likely to keep working for future tops and bottoms. Below is how to do the math.

Low: 145.648 ( I shifted the decimal 2 places to the right )
Square             Root of 145.648 = 12.068
1st rotation multiplier (1 x 0.0625) + 145.648 = 147.160 ( convert to 1.47160 )
2nd rotation multiplier (2 x 0.0625) + 145.648 = 148.681 ( convert to 1.48.681 )
3rd rotation multiplier (3 x 0.0625) + 145.648 = 150.209 ( convert to 1.50209 )
4th rotation multiplier (4 x 0.0625) + 145.648 = 151.745 ( convert to 1.51745 )
5th rotation multiplier (5 x 0.0625) + 145.648 = 153.288 ( convert to 1.53288 )
6th rotation multiplier (6 x 0.0625) + 145.648 = 154.840 ( convert to 1.54840 )
7th rotation multiplier (7 x 0.0625) + 145.648 = 156.399 ( convert to 1.56399 )
8th rotation multiplier (8 x 0.0625) + 145.648 = 157.966 ( convert to 1.57966 )
9th rotation multiplier (9 x 0.0625) + 145.648 = 159.541 ( convert to 1.59541 )

The number of accurate hits is quite astonishing when you put this in perspective...these 9 S/R lines where generated from one number 1.45648..... As a trading tool, it is quite powerful both from the viewpoint of locating a trade entry and/or holding a position into the next S/R level ...not bad considering each level is 150+ pips.....

Sincerely,

TIK

## Related Ideas

How did you work out the constant? I didnt quite follow. The SR of the low is 12.068 How is this related to 0.0625?
pezq
Hello Pezq and all, I must apologize, in my haste I omitted 2 CRITICAL steps in this calculation. below I have re-done the math:

Low: 145.648 ( I shifted the decimal 2 places to the right )
Square Root of 145.648 = 12.068
1st rotation multiplier add to square root ((1 x 0.0625) + 12.068)) = 12.131. Then square the answer (12.131 x 12.131) = 147.160 ( convert to 1.47160 )
2nd rotation multiplier add to square root ((2 x 0.0625) + 12.068)) = 12.193. Then square the answer (12.193 x 12.193 = 148.681 ( convert to 1.48681 )
3rd rotation multiplier add to square root ((3 x 0.0625) + 12.068)) = 12.256. Then square the answer (12.256 x 12.256 = 147.160 ( convert to 1.47160 )
4th rotation multiplier add to square root ((4 x 0.0625) + 12.068)) = 12.318. Then square the answer (12.318 x 12.318) = 151.745 ( convert to 1.51745 )
5th rotation multiplier add to square root ((5 x 0.0625) + 12.068)) = 12.381. Then square the answer (12.381 x 12.381) = 153.288 ( convert to 1.53288 )
6th rotation multiplier add to square root ((6 x 0.0625) + 12.068)) = 12.443. Then square the answer (12.443 x 12.443) = 154.840 ( convert to 1.54840 )
7th rotation multiplier add to square root ((7 x 0.0625) + 12.068)) = 12.506. Then square the answer (12.506 x 12.506) = 156.399 ( convert to 1.56399 )
8th rotation multiplier add to square root ((8 x 0.0625) + 12.068)) = 12.568. Then square the answer (12.568 x 12.568) = 157.966 ( convert to 1.57966 )
9th rotation multiplier add to square root ((9 x 0.0625) + 12.068)) = 12.631. Then square the answer (12.631 x 12.631) = 159.541 ( convert to 1.59541 )

1. The multiplier ( constant ) is simply 1/16 x 1= 0.0625. The multiplier is simply to obtain a workable square root division for trading this pair. Each currency pair/stock/commodity will have it's own unique multiplier, they are commonly 2 ,1 ,0.50 ,0.25, 0.125, 0.625 etc. must all be positive hence 1/2, 1/4, 1/8, 1/16 etc.

2. The multiplier ( constant ) is NOT derived from the LOW value of 1.45648, thus it is constant, and can be applied to any High or Low price for this pair.

Hopefully this covers it, please let me know if you would like any more clarification because it is a really powerful method as the chart demonstrates.

Sincerely,

TIK
Timing is key
This is very similar to Gann's square of 9...it's a square root calculator.
I find it extremely prone to subjectiveness, similarly to forks for that matter. Without some serious screen time and education, it's easy to be tempted to just guess your way around Gann, Forks and these square root levels.

Clearly, not the case when it comes to TiK ;)
Thanks for the thorough explanation.
IvanLabrie
The square of 9 is not for the faint hearted, and is way more than just a square root calculator and requires serious application to get your head around it and to be useful. This tool however is very simple to apply and is purely a square root calculator applied to either a significant Low or High, the answers are absolute and you can have as many rotations as you like no subjectivity there. The tricky part in the process ( especially with currencies ) or "subjectiveness" is in deciding on which constant is working the best, that needs elbow grease and a bit of testing, you also need to play around with the decimal placement, however, what you will discover is the each instrument sings it's own tune and once you find the correct note, you can get results like this:) Thanks for your input
Timing is key
Exactly, finding the optimal constant and decimal placement is the tricky part.
The same as the Gann methods (although it's only one dimension of 3: diagonal, vertical and horizontal planes)
IvanLabrie
Yes Ivan you are correct, I am looking at only one dimension, but in it's own right it can be integrated into any trading strategy if one chooses to exploit this natural phenomenon. I do have a road-map chart that exploits the 3 dimensions, I might post an example down the road, if people are interested:) take care
Timing is key
Sure thing, always interesting to know more about your methods. Keep up the great work!
Timing is key
Thanks TIK that's answered my question. Clearly there is some validity to these levels. As to the underlying principle involved - I am unsure....exactly what is going on...but interesting none the less
pezq
The basic premise is that future price fluctuations are proportional to the square root of prior prices. Although you can use any price in the past theoretically the major extremes tend to work the best.
As you can see the 6th rotation horizontal support 1.54840 held, let's see if cable will revisit the 7th rotation upper channel @ 1.56399. If it falls shy and reverses it will be a sign of weakness.
Hello all, I am following cable with this idea on a 60 minute chart to show how we can use these natural levels on a smaller time frame. I began from the most recent low and instead of multiplying the same constant (0.0625) by 1,2 etc ( 180 degree intervals ). I multiplied by 0.5,1,1.5 etc. ( 90 Degree intervals ). I have included forks to illustrate how the horizontals gave me a heads up when to draw the forks with confluent entry and exit points.

Thanks,

Check out the bounce at the 7th rotation - 1.56399, pretty awesome resistance level
Once the 7th rotation Resistance became support to the 8th Rotation where it called the TOP.......remember these "Natural" levels where produced once the LOW at 1.45648 was in.....No subjectivity just SQUARE ROOTS!
These rotations are working like clockwork! Keep loading the bars and be amazed!

Timing is key
Super sleek!
super amazing work , BOOM BOOM Hurrah
FXKOPPA
now price heading towards 3rd rotation
FXKOPPA
Yes, possible however the levels are getting a little sloppy there are 2 possible scenarios I will need to test
1.I will run them from the most recent high back on the 18 June and see what happens....I don't anticipate much of a shift in the levels.
2. I will run them from the most recent Low on the 30 Sep 2015....Reason The 2 Sloppy Hit's are actually communicating to me that the cycle has shifted slightly so if this is the start of an uptrend I can get these levels up early.
Will post an update
Timing is key
Great, looking forward to it.
IvanLabrie
OLD levels still working
I was looking at USDCHF , before intervention of CHF , was following the same parameter.
FXKOPPA
If you are referring to SQROOT. . S/R levels yes....key is to find the right multiple...once you find...it will provide the roadmap moving forward into the future. Your starting point may change ( Not often ) when major Tops & Bottoms are taken out.....I've been testing a strategy using this method with good results ......trying ti iron out the sideways action:) keep well .....I have recently posted a chart on the Swissy worth checking out...keep well
Nice Pin Bar on the 5th Rotation!! Keep pressing the play button:) Do your own charts to confirm:) Remember these S/R levels were generated from 1 Low Pivot!
Timing is key
Touchdown...Almost @ the 4th rotation....That's 140 +pips just playing the S/R levels
these are down level til 5th root
1.38195
1.39668
1.41150
1.42639
1.44135
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