My favorite way to take TIME into account in a chart is with a Pi Line. Let me begin with an understanding of a few basic concepts surrounding time and cycles, and how we use these cyclical approaches in our trading to produce high probable market setups. One of the core concepts in my trading model is what I call the Pi Line. Pi is the ratio of the circumference of a circle to its diameter, and Pi’s mathematical significance is well known throughout many fields and its origins go back to antiquity.
Pi has been represented by the Greek letter “π”, and because its definition relates to the circle, π is found in many formulas in geometry and trigonometry.
Pi appears in other sciences such as number theory and statistics, as well as it is found in thermodynamics, mechanics, and electromagnetism. We can also see the numerical significance of Pi in cyclical wave structures, sine and cosine functions repeat with a period of 2 π this oscillation and wave form creates a rhythm of time. It is these oscillations and wave formations that we try to identify in our trading. Much like the rhythm of a pendulum, we look to trade around the same rhythms of time on the chart.
It is this oscillation through time that creates this cyclical rhythm and these mathematical constants show that there is an underlying structure and geometry of not just space but also TIME.
The price action on a chart is simply energy moving through people in what we call the markets. Everything moves in waves — it’s how energy travels. This is why I built a model around such wave formation cyclical vibration. Pi defines the circle and thus it is the perfect cycle, this is why I originally began to search for ways to incorporate this cyclical and mathematical phenomenon in my trading model. What I discovered next was really a very simple basic discovery but one that produces amazing results on the price charts on all time-frames.
I decided to put Pi on the chart. I wa...