Tuesday, 31 January 2012

EURUSD...It's magic!!...log vs arith and DAX H12

Ive talked about this fork so many times and yes, it predates the euro and is compiled using the ECU which is calculated largely by the DM value

This is is a bit of fun but have a look at this one simple fork in monthly EURUSD
P0 sept 1975
P1 oct 1978 (or you can use the right hand high pivot of 1980..it makes no difference).
p2 Feb 1985

Here it is in all it's glory using arithmetic scaling.



and here is the same fork using Log scaling.........Impressive ehhh!! If you revert to Arith scale & then replace each of the three lines ( 4 if you connect the B to C) that make up this fork with single trend line segments or rays and then switch back to log scale you do not get the same result.



and heres the detail of the same log daily chart below!!!!



This is obviously astounding stuff but has an alltogether more important application in my trading charts.....truely where is the true location of any line...trend, median,reaction etc? The answer is that any one line has more than one location and yet will quite possibly have more than one reaction.
here below is my DAX CFD March 12 15 min chart ( arith scale) from this morning. Look where the black ML line is and where the reaction lines are.


Here is the same chart/template (same arith scaling) but 5 min TF. I have drawn a small black line where price was on the 15 min. My long entry is on the poke bar through the D-sloping RL.

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