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Time and Price

By Howard Arrington
William D. Gann (1878-1955) was a legendary trader who designed several unique techniques
for analyzing price charts. He developed a unique combination of precise mathematical and
geometric principles which are not easy to grasp. Gann analysts have spent years pouring over
old charts and writings in search of Ganns secret, and there is no end to the number of people
who claim to have discovered Ganns insight and technique that has eluded everyone else.
Perhaps someone has discovered it. I am not in a position to appraise all the claims because I am
not a Gann expert and have not read Ganns writings.
Don Hall has published a book and developed a system called Pyrapoint which seems to me to
be well founded in Gann principles. The purpose of this article is to take one idea used in Dons
work, and present it from a different approach, and yet arrive at the same useful conclusion. I
hope even Don will fi nd my article to be an original insight to substantiate the validity of his
work.
Ganns geometric angles are trend lines drawn from prominent tops or bottoms at certain angles.
The most important angle is 45 degrees, which means the lines slope is one unit of price per unit
of time. (Note: Depending of the chart scale used, the line may or may not appear to be plotted at
a 45 degree angle.) For years, I thought this is what Gann analysts meant by the phrase squaring
time and price. However, Dons Pyrapoint method gave me a new insight, which is:
Price = Time squared or P = t ^ 2
Let me take this mathematical relationship and develop it in this article. The above relationship
between price and time can be plotted on a chart as shown in this illustration. The time values of
10, 20, and 30 are marked by the three arrows. See Figure 1.

For the sake of illustration, lets suppose a prominent top or bottom occurs at a price of 400. The
theory is that this signifi cant point has a mathematical counterpart. Start a new time curve at this

point in time, and it will give us an expectation for a future top or bottom to occur on this curve.
This principle can be stated as When price meets time, a change is imminent. This price meets
time relationship is shown in the following chart. See Figure 2.

With the prominent top or bottom at P, if price meets the curve at point A it will do so in 18 bars.
The time to A is the square root of the price at A. Price at A is 324. Square root of 324 is 18.
If price meets the curve at point B, it will do so in 20 bars. The time to B is the square root of the
price at B. Price at B is 400, therefore the time to B is 20 bars.
If price meets the curve at point C, it will do so in 22 bars. This is a very interesting concept!

Remember that price and time are related by the formula:


P = t ^ 2 or t = sqrt( P )
In this article, I will develop the mathematics for the slope of a trend line using the price and
time relationship presented in the previous article. Lets work with the model illustrated in this
See Figure 3.

From the previous article, the next time curve will be t bars away for a given price P. At a time
t+1 price would meet the curve at price P1. Now, lets solve for the slope of the trend line shown
in blue which connects P and P1.
P=t^2
P1 = (t + 1) ^ 2 = t ^ 2 + 2 t + 1 = P + 2 t + 1
Slope = (Change in price) / (Change in time)
Change in price = P1 - P = P + 2 t + 1 - P = 2 t + 1 = 2 t + 2 - 1 = 2 [ t + 1] -1
Change in time = t + 1
Therefore, slope of P to P1 is = (2 [ t + 1] - 1) / (t+1) = 2 1 / (t+1) = 2 - 1 / sqrt( P1 )
If we normalize all prices to consider three signifi cant digits, then all prices will fall in the range

of [100 ... 1000]. By substituting the price boundaries into the slope formula,
we can get a range of slopes as follows.
For a P1 of 100, the slope of the up trend line to 100 = 2 - 1 / 10 = 1.9
For a P1 of 1000, the slope of the up trend line to 1000 = 2 - 1 / 100 = 1.99
The slope of the up trend line at the midpoint of this price range is 2 - 1 / sqrt(500) = 1.96
Lets call this trend line a 45 degree line because we developed the slope using one unit of price
change from P to P1 with one unit of time t. For this 45 degree line, the slope is basically 2. I
think this is strong justifi cation as to why Gann used 2 cents as the price grid interval of his
daily grain charts. Such a scale layout would naturally give Gann 45 degree angles with a slope
of 2 cents per daily bar. I have shown that 2 is the slope of the upward 45 degree trend
line that develops from the price and time relationship given by the formula: P = t ^ 2.
One can solve for the slope of the downward trend line from P1 to P to obtain this result:
Slope of P1 to P = (-2 t - 1) / (t-1) = (-2 [t - 1] - 3 ) / (t-1) = -2 - 3 / (t-1) = -2 3 / (sqrt( P ) - 1)
For a P of 100, the slope of the down trend line to 100 = -2 - 3/9 = -2.33
For a P of 1000, the slope of the down trend line to 1000 = -2 - 3/99 = -2.03
Again, the slope of the down trend line approaches a value of -2. Therefore, -2 is a good
approximation for the slope of a downward 45 degree trend line.
Now I would not bother to give you the mathematics in the previous two articles if I did not fi nd
application of this theory in the charts. I used the mathematics given in the fi rst two articles to
develop a tool in ESPL which draws horizontal lines at calculated price levels, and nearly
vertical time curves at the calculated time intervals. This forms a grid of trapezoids like the
previous illustration. (Don Hall calls them squares.)
Diagonal lines connect the corners of the trapezoids to give support and resistance trend lines.
Here is a daily chart of JNPR with the construction started on the highest high. All price levels,
time intervals, and trend lines are constructed mathematically from two pieces of information:
the price $244.50 on the date 10-16-2000.
There is more in this chart than I have space to explain. But, I can point out some haracteristics.
The horizontal price lines have a label on the left which is a degree of rotation around a Square
of 9. This is covered in the Pyrapoint book, but is beyond the scope of this article. Note that in
my example, the time lines are nearly vertical. This is a slight variation from the method of
construction in the Pyrapoint book which shows vertical lines. I feel that my presentation is
appropriate because of the theory of the time curve illustrated in my fi rst article. The time curve
forms the left and right sides of the trapezoid, and the price levels form the top and bottom sides.

Time: Time is measured by the time curve, which is related to price.


Tip: As price meets time, a change is imminent.
Note the first time line labeled 12 on the bottom and 16 on the top.
If price meets time at the -720 horizontal, then the time for the change would be the 12th bar
from the top.
If price meets time at the -540 horizontal, then the time for the change would be the 13th bar
from the top. At the -360 horizontal, the time change would be in the 14th bar. At the -180
horizontal, the time change would be in the 15th bar. At the 0 line, the time measured would be
16 bars.
That is why the top of the time line is labeled with a 16, and the bottom of the line is labeled with
a 12. Starting at 16, for each 180 degree down the time count is reduced by one bar, or for every
180 degree rise, the time count increases another bar. Note that the market did experience a
change when price met the time curve labeled 12 to 16!
The price at the 12 to 16 time line was used to obtain a forecast of the 2nd time line, which is
labeled 25 to 31. As the price meets each time curve, a new time curve is calculated based on the
price. Each of the time curves shows excellent correlation with market change when price met
the time line.
Prices: The prominent high of $24.50 is the calculation basis for all the horizontal price levels
that are shown.
Tip: The market seeks out these price levels, and you can calculate these prices in advance. Note
how the market fell to the -540 horizontal, rallied to the -180 horizontal, fell to the -900 level,
rallied to the -540 level, fell to the -1080 level, and rallied to the -720 level.
Trend Lines: The downward 45 degree trend lines shown in red create a flow channel, or price
highway as Don calls it.
The upward 45 degree trend lines shown in green create a price highway going the other
direction.
The red lines are resistance lines that the market must close above to change direction from
bearish to bullish.
The green lines are support lines that the market must close below to change direction from
bullish to bearish.
We all have used upward trend lines placed underneath action lows to indicate support, and
downward trend lines placed above action highs to indicate resistance. The beauty of this tool is
that these diagonal trend lines are computed in advance, and the market seems to have respect for
them. Price fl ows up and down the channels. The more you study the example, the more
impressed I think you will be with this tool.

The Pyrapoint tool can also be applied to intra-day charts with good success. The size of the
price interval used on a daily chart seems to be too big for use on an intra-day chart. No problem.
Don points out that there are squares within a square. All one needs to do is subdivided the price
interval into halves, fourths, or eighths. The time interval is determined from price and will not
change.
One question that I have dealt with is this: If the time interval computes to be 11 bars because the
price is at 121, which intra-day bar time frame should I use? If 1-minute bars are used, then we
have a time curve 11 minutes later. If 2-minute bars are used, then the time curve would be 22
minutes later. If 5-minute bars are used, then the time curve is plotted 55 minutes later. Now do
you see why I have a question? The selection of the intra-day bar time frame greatly affects the
time interval measured by the next time curve.
Here is how I tackled the problem, and the proposed solution. I displayed a 1-minute chart and
used a cycle tool to measure in hindsight the cycle rhythm from bottoms to bottoms, tops to tops,
and/or bottoms to tops. When I found a cycle width that seems to fi t by catching multiple
turning points, I note the number of minutes in the cycle. I use this formula to estimate a good
intra-day time frame to use.
Intra-day Bar Time Frame = Cycle width in minutes / sqrt( P )
Example: On the JNPR 1-minute chart I found a 65 minute cycle when the price was around
$133. Therefore, bar time = 65 / sqrt( 133 ) = 5.6 minutes per bar. So, using a 6-minute chart, or
possibly a 5-minute chart should show a good fi t with the Pyrapoint tool. I happened
to have been following a 5-minute chart, and I do fi nd excellent correlation.
I have used a smaller price interval by subdividing the 180 degree interval into
eighths in this example. See Figure 5.

Please study the chart, and observe the fl ow of prices in the up and down trend channels. Note
how trend changes occur on or near the vertical time curves, and how the market seeks the
horizontal price levels. This entire road map is computed in advance from the prominent
top that occurred on January 12th at 9:35 a.m.
Moon Phases
by Howard Arrington

"We know that the moon's effect on our planet is great--it is vitally connected with the movement
of all fluids. The moon is also believed to effect human behavior in strange ways, especially
during a new or full moon.
"In an experiment conducted on an arbitrary set of commodities for the year 1972 (Todd Lofton,
July 1974, writes about his observations) it was shown that short-term movements of prices react
with some uniformity with respect to the phases of the moon. In fact, the commodities chosen
for observation--silver, wheat, cattle, cocoa, and sugar--showed an uncanny ability to form a
rising market following a full moon and a falling market after a new moon." -Commodity Trading Systems
and Methods, P.J. Kaufman, p. 205.

That last statement, "a rising market following a full moon and a falling market after a new
moon", intrigues me. I wondered whether it is true or false, of value or worthless nonsense.
Fourteen years ago as I would travel back and forth between Boise, Idaho, and Salt Lake City,
Utah, one of my customers lived near the highway at the half way point of the trip. Several
times I stopped in and visited with him. He owned several large farms in southern Idaho and
traded sizeable positions in live cattle futures. His office had large custom made chart tables
where his secretary would manually update daily bar charts on three feet by four feet graph
paper. The reason I mention this customer is because his charts were marked with symbols for
the moon phases. I have great respect for this trader because he has been trading for a long time,
trades big positions, and takes trading seriously. I wish now I had paid more attention to how he
used the moon phases that he marked on his charts.
Anyway, I can't do research unless I have tools to work with. So, moon phases were added to the
Cycles tool in Ensign Windows. The moon phase parameter is simply a check box to indicate
the moon symbols are to be shown on the chart.

The first two Show options are used to display cycle arcs on the chart. For this research, I am
only interested in having Moon Phases shown on the chart. I selected a dark gray color for the
new moon image. Full moons will always be shown in white. I did not go hunt down the perfect
example. I am simply using a current daily Feb Live Cattle chart as my example since cattle was
mentioned in the Kaufman book, and my customer puts moon phases on his manually drawn
cattle charts. Here is the LC1G cattle chart showing moon phase symbols. (Some moon phases
occur on weekends and holidays. In that case, the moon symbol is shown on the nearest trading
date.)

Cattle have been in a strong up trend since their $70.050 low on September 13th, 2000, which
happens to be a Full Moon date! This low turning point is not shown in the example.
Let's rate the correlation in the chart for the week following the new moons and the full moons. I
will include the net change of the moon day as the first of 6 trading days. The theory is "a
rising market following a full moon and a falling market after a new moon". So, how well does
this cattle chart correlate with the theory?
Full Moons (expect rising market)

Nov 10th, 2000. Excellent - This day was a low turning point followed by a $1.325 gain.

Dec 11th, 2000. Excellent - This day was followed by a $1.15 gain in 6 days.

Jan 9th, 2001. Superior - This day was a low turning point. The huge 6-day gain is
$4.025.

New Moons (expect falling market)

Oct 27th, 2000. Poor - Not too bad until the strong up day on Nov 3rd for an up move of
$0.825.

Nov 24th, 2000. Excellent - Rare correction in this strong up trend. Down move was
$1.225.

Dec 26th, 2000. Good - Down move in 6 days is $0.425. However, better down move
followed.

Jan 23rd, 2001. Excellent - 6 day down move is $2.45. The Jan 30th close, not shown,
was $77.625.

Summary:
I would give the theory pretty high marks for correlation on the current LC1G chart. The low
turning points on the full moon dates of Nov 10th and Jan 9th jump out. The high turning point
on the new moon date of Nov 24th jumps out. The correlation of the other new and full moons is
pretty good as well. And to top it off, the annual low occurred on a full moon on September
13th, 2000! My personal conclusion is that there is value in the theory that the moon influences
human behavior.
Tip: Pay attention to the phase of the moon.
As a result of this research, my brother has added the moon phase as another input to his
personal cattle market neural net forecasts. You are encouraged to do you own research and
arrive at your own conclusions. The material presented here has been limited to the examination
of one cattle chart for seven recent moon phase dates. Thorough research should involve
evaluating lots of charts and lots of moon dates.
Research:
Square Root Theory
by Howard Arrington

William Dunnigan did extensive research in the early 1950's and published in 1954 and 1955.
He used the square root theory as part of his calculation of a profit objective. He considered this
method a 'golden' key and received recognition for his work in various journals. The square root
theory is that prices move in units of the square root, meaning prices at $64 (8 squared) would
move to $49 (7 squared) or to $81 (9 squared). The forecast price is one point up or down,
based on the square root. The theory says a price may move to a level that is a multiple of the
square root.
Since LC1G was used as an illustration in the first article, I thought you might be interested to
see the square root theory applied to the cattle chart. Nothing is a better teacher of a principle
than an example.

Let's forecast a price based on the Sept 13th low of $70.050. The first step is to normalize the
price to the range of 100 to 1000 by adjusting the decimal point. Find the square root of the
normalized value, add 1 point or a multiple number of points, and square this value to obtain the
forecast price.
1)
2)
2)
3)
4)
5)

Normalize 70050 to be 700.50


Square root of 700.50 is 26.467
Adding 1 gives a value of 27.467
27.467 squared is 754.43, which is the midpoint of the up move in the middle of November.
Adding 2 gives a value of 28.467
28.467 squared is 810.37. So 81037 is a forecast price. The Jan 16th high was 81075!!!!

Now, is it just a coincidence that a major high is within 4 cents of a price calculated from a major
low price? Or, does that make you want to look for this principle in other charts?
Tip: A price may move to a level that is a multiple of the square root.
As I studied the LC1G daily chart some more, I see that there is a significant high of $75.500 on
Jan 7th, 2000 (not shown in the chart above. However, Jan 7th is shown in the next chart). It
can be used to forecast the Sept 13th low as follows.
1) Normalize 75500 to be 755.00
2) Square root of 700.50 is 27.477
2) Subtract 1 gives a value of 26.477
3) 26.477 squared is 70105. So 70105 is a forecast price. The Sept 13th low was 70050, or
just a 5 cent difference!

Research:
Gann Square
by Howard Arrington

I did not start out writing this issue with the intent of focusing so much on the cattle chart. But I
just have to show you the results of the next thing I looked at. Since the square root theory was
uncanny in forecasting both the annual low and the annual high of the LC1G contract, I decided
to place a Gann Square on the chart with the vertical midpoint on the Jan 7th, 2000, high. The
square was placed with the left edge on Jan 7th, and stretched so the horizontal midpoint aligned
with the Sept 13th low. The bottom of the square was placed on the Sept 13th low. Those were
my decisions for placement of the square. This is the image I obtained. I'm sorry the image has
to be so small to fit in the newsletter.

Measure Time
I placed the left edge on Jan 7th, 2000, and stretched the square so the horizontal midpoint would
align with the Sept 13th, 2000, low. What I find interesting is that the Jan 16th, 2001, high is
aligned with the 3/4 point of the square! This time is marked by the red arrow above the square
pointing to the highest high on the chart.

I also noticed that Jan 6th, 2000, was a New Moon! And, my first article pointed out that Sept
13th was a Full Moon.
Price Support and Resistance
I marked the chart with arrows where I want you to observe the support or resistance provided by
the fan lines that extend from the 4 corners of the square. Uncanny! It leads one to conclude
that there is a mathematical basis for price movement. Price movement is not purely random.
Reverse Engineering
The application of the Gann square looks great in hindsight. But I want to be empowered with
principles that would have enabled me to apply the square back in Feb 2000 as insightfully as
can now be done. The Jan 7th, 2000, high of $75.500 is known. One point up and one point
down price forecasts can be made as illustrated in the previous article to use as left side top and
bottom corner points aligned with Jan 7th. A one point up forecast price from $75.50 is
$81.10. A one point down forecast price from $75.50 is $70.10. All of that can be done in Feb
2000.
The final piece of information needed is a way to calculate in advance the width of the square.
Let's go fishing for clues by reverse engineering the present Gann square application. There are
250 calendar days between Jan 7th and Sept 13th which can be computed using this ESPL script:
begin
writeln(encodedate(2000,09,13)-encodedate(2000,01,07));
end;

That would make the square width 500 calendar days because Sept 13th is the midpoint. Trading
days can be estimated from calendar days using: trading days = (calendar days / 7) * 5 holidays. The Gann square I applied is 346 trading days in width. The range between the
forecast low and the forecast high is 81.10 - 70.10 = $11.00.
So, lets take inventory of the numbers available to work with in Feb 2000 that might lead us to
apply the square at a 346 day width, which would then have been a wonderful roadmap to follow
in trading live cattle for the rest of the year. We have the following numbers to work with in
hindsight:

An actual high price of $75.50 on Jan 7th, 2000.

Forecast high of $81.10, forecast low of $70.10, and their $11.00 range.

Numerology that Gann favored: 45, 60, 90, 120, 144, 180, 240, 270, and 360.

The square roots of 811, 755, 701, and 11.

Time: 500 calendar days or 346 trading days.

Ratios of any of the above numbers.

Multiples of any of the above numbers, particularly 2, 4, 8 and 16 times.

Try as I might, I am unable to come up with any concrete reason for selecting a square width of
346 bars in advance. The best guess might simply have been to initially construct it using 360
bars since 360 is a favored number, and the number 811 is 360 degrees around a Gann Square of
Nine from the number 701 . Being stumped by this question, I spent several hours browsing the
Internet for more resource material on constructing a Gann Square. I did not find anything I did
not already know. I was unable to find any help in determining the 1x1 slope to use. Most
sources, if they did indicate a reason for square width said either to use a fixed width of 90 or
144 bars, or to use the price as the number of bars, meaning a price of 400 would use a width of
400 bars. All examples located the square corner on the trend top or bottom. No one showed an
example like my example with the trend top placed at the midpoint of the square, and the
square's corners located on calculated prices.
In my second example, I applied the Gann Square from a recent minor top on a JNPR 5-minute
chart. The high price was $106.50 on February 6th, 2001. Let's apply our Square Root Theory
technique to obtain a forecast price like we did before:
1) Square root of $106.50 is 10.320
2) Subtract 1 gives 9.320
3) Square of 9.320 is $86.86
Gann students would observe that the 86.86 price is 180 degrees around Gann's Square of Nine
from the 106.50 price. Therefore, because I have two prices that are 180 degrees apart, I will
select the width of the square to be 180 bars. This is the result, showing the 1x1, 1x2 and 2x1
fan lines from the four corners of the Gann Square.

The top left corner is on the minor trend high at $106.50. The lower right corner is on the 180
degree price of $86.86 and 180 bars to the right. Several things jump out at me from the Gann
Square image, such as:
1) The 1x2 red line from the top left corner stopped the retracement at bar 138 at a price of
$98.875.
2) The 1x2 red line from the bottom left corner stopped the crash at bar 97 at a price of $92.
3) The two 1x2 red lines in 1) and 2) also stop the retracement at bar 186 at a price of $96.75.
4) The trend rides up and down both of the 2x1 red lines from the right side corners.
The example also shows the Pyrapoint tool located at the same minor trend top. The Pyrapoint
construction is the series of horizontal bright blue price levels, light red and green diagonal lines,
and vertical lines in cyan. The Pyrapoint tool was the discussed in the January 2001 issue of this
newsletter, and I thought you would like to see both tools working together. Gann Squares are
also presented in the December 2000 issue of this newsletter.
I admit I do not know all the answers. But, hopefully your thinking has been stretched as I have
openly shared with you some of my thoughts, and you will find a refreshing and perhaps novel
idea or two in this discussion of Gann Squares

Pyrapoint by Don Hall


By way of introduction, I am Don Hall, and my reason for formulating Pyrapoint is to accurately
track, and indeed project, movement of markets as reflected across the Pythagorean Cube.
The ancestry of Pyrapoint would date back to 1956, when I began hedging in a Commercial
Grain Elevator that I owned. I became an ardent student of W.D. Gann, seeking to unravel the
very accurate market cycles that were credited to him.
By further introduction, I have been a principal in a Commodity Trading firm, Alpha Systems,
have held a seat on the CBOT while an acting Principal in a commodity trading firm, and have
carried a CTA license---all past history.
Of special interest to me has been the tracking of W.D. Gann's famously supervised trip to the
"trading pit" in Chicago, where he was recorded as making some 87% profitable trades on nearly
200 trades. It became especially important to me when I learned, first hand, from Ganns nextdesk trading associate, Rhinalto Alghini, that the only tool that Gann took to the pit for the test
was a miniature "Square of Nine". Gann called this his "Master Calculator". "Reno" became a
personal friend as well, as we were both members of ACE (Astro-Cycle Exchange) a group of 50
designated for advanced cycle studies in Chicago.
Although I find no record of Gann's acknowledgment of it, in reality the "Square of Nine" is a
Pythagorean Cube (P.C.), A SQUARE ROOT CALCULATOR. I am told (again first-hand) by
my mentor in Cairo, Fuad El Zahaby (while I was studying in Egypt in the Mid-seventies) that it
was an early Egyptian Calendar, a basic mathematical tool, and very instrumental in the
construction of the Great Pyramid. I had long known the "mystic" action of price between the
significant diagonals located upon the face of the Pythagorean Cube. This was especially true for
support and resistance as used by Gann in very expensive seminars where he was teaching the
significance of the 45 degree angle, as well as the multiples and divisions per his analogy as
applied to the square root calculator.
We feel that it is especially significant that Gann called 90 degrees his "Pattern Chart". One
quick note of support: when one becomes convinced of the validity of the square root influence
in market moves, one will realize the value of the square of nine (Pythagorean Cube) in the pit
with W.D....MARKETS MOVE IN SQUARE ROOT INCREMENTS! To get a quick idea as to
how Gann knew how to use the square root calculator, take ANY number on the P.C., advance 90
degrees on the face of the "Cube", count the digits to that point, and you will have the square root
of your beginning number. Every number on the P.C. designates an angle for this calculation.
Without further belaboring the point, one can see how Pythagoras and the Hypotenuse Rule
opened the door for Pyrapoint: on a right angle axis, where price is the vertical angle and time is

the horizontal angle, the relationship of Price and Time's "squaring" is always expressed on the
hypotenuse---and always 90 degrees. THUS: BIRTH OF THE PYTHAGOREAN DIAGONAL
(P.D.), a most mystic trend line (AND CHANNEL!) Our prejudice is reflected in our expressed
assumption that the "only trend lines that carry a high accuracy history are those that coincide
with the Pythagorean CALCULATED trend lines---i.e. THE PYTHAGOREAN DIAGONALS".
This is the plight of Pyrapoint: The Code counts time, plots price, and gives objectives for
each---all calculated (and oh, yes, with targets supporting VERY close stops). I personally feel
that it is the only way that I can afford to enter today's markets. Thus: WE ARE CHANNEL
TRADERS, YIELDING US CALCULATED TARGETS, EXACT STOPS, AND EXACTLYDEFINED PRICE HIGHWAYS TO INDICATE EXACT TREND CHANGES. A support library
of some 1000+ charts has been developed to prove our commitment to the Pythagorean Diagonal
Concept, (the PDs).

The cursor will change to a pencil while in the draw mode. Move the cursor to an important High
or Low price on the chart and then click the left mouse button. Horizontal lines represent
potential support and resistance levels. Vertical lines represent probable turning points based on
Time. Diagonal lines are used to intersect the Horizontal and Vertical lines. The market will
often follow the diagonal lines. Pyrapoint is plotted using an appropriate degree of rotation
parameter selected by Ensign's proprietary artificial intelligence algorithm.

Adjusting
Re-selecting the PyraPoint tool will activate the ability to move it to a different location. Click
the mouse on the Zero starting point to re-select it. The cursor will change to a pencil. Drag the
mouse from the Zero starting point to a new location and the PyraPoint lines will move. Click the
mouse again to complete the draw phase.
Properties
To view the properties window click the Chart Objects button, select PyraPoint, then click the
Properties button to open the Properties window for the tool.

Normalize > 1000 - Place a check mark in the 'Normalize > 1000' box to prevent the
Pyrapoint from automatically adjusting the horizontal width of the PyraPoint squares
when a market is at or near 1000 in price.

Normalize < 100 - Place a check mark in the 'Normalize < 100' box to normalize the
study on 2 digits.

Price - The 'Price' box shows the exact price where the Pyrapoint is anchored. The Price
can be edited if necessary.

Degrees - Click the Up and Down selection arrows to change the Degrees setting. The
Degrees setting will effect the number of lines that are drawn on the Pyrapoint tool and
how closely they are spaced apart. When the Pyrapoint tool is in a selected state, you can
also click the light-blue Up (Previous) and Down (Next) arrows on the Controls Toolbar.
This will also change the Degrees setting.

Click the up or down spinner arrow to double or halve the Degree of Rotation parameter. 45
degrees is shown in the example. Clicking the up arrow will change it to 90 degrees. Clicking
the down arrow will change it to 22.5 degrees. Also, you can enter any degree in the edit box.
Entering a value greater than or equal to 1 will be treated as degrees. Any value between 0 and 1
will be treated as a percent of 180 degrees. A value of 0.5 is the same as 90 degrees. After

selecting your preferred colors, Line Thickness and Line Style, check the Use as Default box to
save the parameters as the default.
To fully understand Pyrapoint, its mathematics, implementation, design, use and how to trade
with Pyrapoint, you need to buy Don Hall's Pyrapoint Book or Pyrapoint CD. The book is a
professionally published 234-page hard cover book. The mathematics in the
following articles are applicable to the theory of the Pyrapoint tool.

Time and Price

Trend Line Slope

Square Root Theory

Mathematics in the first two articles was used to develop the Pyrapoint tool in
Ensign. Horizontal lines are plotted at calculated price levels, and Vertical time curves are
plotted at the calculated time intervals. These lines form a grid of trapezoids (Don Hall calls
them squares). Diagonal lines connect the corners of the trapezoids to give support and
resistance trend lines. Below is a daily chart of JNPR with the starting point located on the
highest high. All price levels, time intervals, and trend lines are constructed mathematically
from two pieces of information: the price $244.50 on the date 10-16-2000.

The horizontal price lines have a label on the left which is a degree of rotation around a Square
of 9. More information on this topic can be found in Don Hall's Pyrapoint book. Note that
in this chart the time lines are nearly vertical. This is a slight variation from the method of
construction in the Pyrapoint book which shows vertical lines.
Time: Time is measured by the Vertical time curves which are related to price. Tip: 'As price
meets time, a change is imminent.' Note the first time line labeled 12 on the bottom and 16 on
the top. If price meets time at the -720 horizontal, then the time for the change would be the 12th
bar from the top. If price meets time at the -540 horizontal, then the time for the change would
be the 13th bar from the top. At the -360 horizontal, the time change would be in the 14th bar.
At the -180 horizontal, the time change would be in the 15th bar. At the 0 line, the time
measured would be 16 bars. That is why the top of the time line is labeled with a 16, and the
bottom of the line is labeled with a 12. Starting at 16, for each 180 degree down the time count

is reduced by one bar, or for every 180 degree rise, the time count increases another bar. Note
that the market did experience a change when price met the time curve labeled 12 to 16!
The price at the 12 to 16 time line was used to obtain a forecast of the 2nd time line, which is
labeled 25 to 31. As the price meets each time curve, a new time curve is calculated based on the
price. Each of the time curves shows excellent correlation with market change when price met
the time line.
Prices: The prominent high of $244.50 is the calculation basis for all the horizontal price levels
that are shown. Tip: The market seeks out these price levels, and you can calculate these prices
in advance. Note how the market fell to the -540 horizontal, rallied to the -180 horizontal, fell to
the -900 level, rallied to the -540 level, fell to the -1080 level, and rallied to the -720 level.
Trend Lines: The downward 45 degree trend lines shown in red create a flow channel, or 'price
highway' as Don calls it. The upward 45 degree trend lines shown in green create a price
highway going the other direction. The red lines are resistance lines that the market must close
above to change direction from bearish to bullish. The green lines are support lines that the
market must close below to change direction from bullish to bearish. We all have used upward
trend lines placed underneath action lows to indicate support, and downward trend lines placed
above action highs to indicate resistance. The beauty of this tool is that these diagonal trend
lines are computed in advance, and the market seems to have respect for them. Price flows up
and down the channels. The more you study the example, the more impressed I think you will be
with this tool.
Intra-day Charts
The Pyrapoint tool can be applied to intra-day charts with good success. The size of the price
interval used on a daily chart seems to be too big for use on an intra-day chart. No problem.
Don points out that there are squares within a square. All one needs to do is sub-divide the price
interval into halves, fourths, or eighths. The time interval is determined from price and will not
change.
Question: If the time interval computes to be 11 bars because the price is at 121, which intra-day
bar time frame should I use? If 1-minute bars are used, then we have a time curve 11 minutes
later. If 2-minute bars are used, then the time curve would be 22 minutes later. If 5-minute bars
are used, then the time curve is plotted 55 minutes later. The selection of the intra-day bar time
frame greatly affects the time interval measured by the next time curve.
Answer: The following is a sample solution. Use a cycle tool to measure in hindsight the cycle
rhythm from bottoms to bottoms, tops to tops, and/or bottoms to tops. Find a cycle width
that fits by catching multiple turning points. Note the number of minutes in the cycle. Use this
formula to estimate a good intra-day time frame to use.
Intra-day Bar Time Frame = Cycle width in minutes / sqrt( P )

Example: On the JNPR 1-minute chart I found a 65 minute cycle when the price was around
$133. Therefore, bar time = 65 / sqrt( 133 ) = 5.6 minutes per bar. So, using a 6-minute
chart, or possibly a 5-minute chart should show a good fit with the Pyrapoint tool. I happened to
have been following a 5-minute chart, and I do find excellent correlation. I have used a smaller
price interval by subdividing the 180 degree interval into eighths in this example.

Please study the chart, and observe the flow of prices in the up and down trend channels. Note
how trend changes occur on or near the vertical time curves, and how the market seeks the
horizontal price levels. This entire road map is computed in advance from the prominent top
that occurred on January 12th at 9:35 a.m.
Daily Charts
I thought you would like an update on how JNPR has continued to walk the Pyrapoint
framework of diagonal trend channels, horizontal support and resistance levels, and turns
occurring on vertical lines at the end of squares.

Our January example was through the end of the 5th square marked by the 62 to 59 vertical blue
line. I was amazed at how JNPR walked down the red diagonal lines to turn on the -1800
horizontal (tenth rotation of 180 degrees) and at the end of the 12th square marked by the 119116 vertical line on April 3rd. The actual low day was April 4th. Amazing indeed! (Sorry the
closeness of the bar spacing causes the 120 label to overwrite the 116 label which is below the
low turning point.)

In the following chart the starting point is the market high. Everything else is projected into the
future. The blue horizontal lines are major support / resistance for 45 degree squares from the
high. The vertical lines are time periods. Notice that the major turning points occur near these
cyan vertical lines.

360 degrees of the Square of 9 is the bottom of the market on 03-22-2001, at a one year cycle
from the market high on 03-24-2000.
On 05-22-2001 we hit the 180 degree Square of 9 from the market high on 03-24-2000. The
turning point also occurred at an exact vertical time point. This gave a very strong sell signal
along with others.
Phi = 1.618. 05-22-2001 is 424 calendar days from 03-24-2000 all-time S&P 500 high. Phi
cubed times 100 = 424. 05-22-2001 is 263 calendar days from 09-01-2000 the S&P double top.
Phi squared times 100 = 262. 05-22-2001 is 61 calendar days from 03-22-2001 low. 1 / Phi =
61.8
Helio cycles: Synodic: JU 15 from 11-06-2000 S&P high. JS 15 from 07-31-2000 low.
Sidereal: Mars 120 from 09-04-2000 Labor Day. 240 from 01-17-2000 holiday (01-14-2000
Dow high).
Geo: Moon-Sun-Saturn conjunction with Mercury-Uranus trine.

The following is a sample of Pyrapoint Definitions, Rules, and Expectations (written by Don
Hall)
1. All markets respect and follow the rule of square-root influence.
2. The square-root of every number on the Pythagorean Cube has an influence of 90 degrees on
the PC.
3. Pyrapoint records and tracks this influence via PDs (90 degrees at a time).
4. Degrees refers to degrees on Ganns reference to the Great Circle of Time (a 360 degree
circle).
5. At the end of each 90 degrees, expect a new influence to become a part of the market move.
Whether level or up/down, it will indicate potential trend change. We mark this as EOS (end of
square). We expect the position of PD on the first 2 or 3 bars to show us the new PD direction
and influence.
6. We validate the accuracy of these assumptions by taking any significant point of interest
(contract hi/lo, opening hi/lo, etc.) then rotate the azimuth of this number (angle) 90 degrees on
the face of the PC---count the digits encompassed to this azimuth, and you UNIVERSALLY
have the square root, and have encompassed the influence of this number of interest. The
Pyrapoint tool does this for you.
7. Although Trend Lines are the basis of most charting, our research has indicated than ANY
trend line traveling a significant distance on the chart will be on an azimuth of the Pythagorean
Cube. Research has shown price to follow nearly a full year without violation of the PDs.
8. We learn that price often follows the azimuth of the Pythagorean Cube, and when it does
violate support or resistance it will seek the adjacent next calculated azimuth (PD) as the next
target. The Pyrapoint tool provides these calculations.
9. All lines, targets, and stops are exactly calculated. 90 degrees serves as BASIC with 50 and
100 percentiles as our basic code. For example, if 90 degrees is our base consideration (perhaps
too large for our wave action) then the next price modes would be 50% or 45 degrees, 22.5
degrees, 11.25 degrees, 5.625, etc. The same analogy applies to the fitting of PDs to the
upside.
10. For example, if price is following an 11.25 degree advancing PD it will also maintain its
wave movement within this 11.25 degree line and the next one below it which Pyrapoint has
calculated. Right! A perfect stop. Remember, when broken, the price will move to the next
adjacent PD as a target.

11. An Accelerated PD is defined as a diagonal on the prior example 11.25 degree square. It is
used when price is hugging a PD and you dont want to risk your profit while waiting for price to
proceed to a stop. By placing the Accelerated PD you will realize that you have geometrically
created the 100 percentile application in our rules, or a diagonal PD of 22.5 degrees (without the
need to re-pivot your Pyrapoint tool). Note that all PDs have the same characteristic of being
magnetic.
12. The Price Highway of reference in our charts is the projected path of price as it follows the
PD in use, and is trailed by the next adjacent calculated PD as its automatic stop. Remember that
an Accelerated PD is always an option for a higher/lower stop.

*** Below are some Testimonials from Pyrapoint Users ***


"I have used many, many software applications over the years and I have never seen anything
nearly as powerful and consistent and as elegant in its simplicity as Pyrapoint. I really thank you
for such a wonderful creation." - J. Pell 12-03-2000
"I must say, as a former ~~~ slave, I REALLY enjoy the simple elegance of the Ensign product.
I also use Pyrapoint, which was my introduction to Ensign, and you really did a great job with
that too." -W. Sheppard 12-19-2000
'You went waaay beyond! Thank You. Everything quickly changed -and for the better- once we
decided to switch to eSignal so we could use Ensign Windows. We had also researched
Pyrapoint; read the book and purchased the Pyrapoint Wheel before we determined we needed to
take the plunge. (We'd been with --- for the last two years.) We haven't quite got Pyrapoint
down yet but know enough to use it as a guide to help us stay in a trade, or get out. We
recognized the potential of the collective applications: eSignal, Ensign Windows & Pyrapoint.
Many thanks!' -E. Newman 10-26-2000
"I am very impressed with your work on the Pythagorean Cube (PYRAPOINT) system. Your
use of multiple trend lines (and thus squares) make a very neat and professional image -- also we
are very impressed with the flexibility and speed of movement of squares on the individual
charts. GOOD WORK!" -- D. Hall 12-31-1999
"Since you are now looking in earnest toward the learning curve of Pyrapoint, a couple of things
may well assist materially. First, we do have software---and a very satisfactory one, I might
add---it is designed by Ensign. It is very affordable, and VERY user-friendly. Flexibility
includes being able to move squares to any top or bottom of your choosing for your studies and
sync. The software is compatible with several data providers: DTN, Interactive Brokers and
eSignal. Most costs are added to the monthly fees paid to your data provider, @ $49.95 per
month where we are. Support is excellent, and Ensign keeps their updates for free and often." -D.
Hall 11-15-2000

"As noted in my earlier e-mail the count, the designation of degrees, the on going levels of
squares, the handling of the 'rounding'---all would make any Pyrapoint customer 'drool'---your

work is FANTASTIC, Howard. I am especially impressed with the simplification that your
programming presents as opposed to the problems of the different sized squares with off-sets.
With your ability to move the overlays (squares) it would not seem to reduce the ability to move
to the 'initial force point' after a subsequent significant violation of a diagonal. This makes it
show even more perfectly---and it would make a dramatic presentation for any student, in my
humble opinion. My appreciation---and my compliments. It has really came together
effectively---with a very PROFESSIONAL LOOK!!!" -Don Hall 01-16-2001

Article: Time and Price


William D. Gann (1878-1955) was a legendary trader who designed several unique techniques
for analyzing price charts. He developed a unique combination of precise mathematical and
geometric principles which are not easy to grasp. Gann analysts have spent years pouring over
old charts and writings in search of Gann's secret, and there is no end to the number of people
who claim to have discovered Gann's insight and technique that has eluded everyone else.
Perhaps someone has discovered it. I am not in a position to appraise all the claims because I
am not a Gann expert and have not read Gann's writings.
Don Hall has published a book and developed a system called Pyrapoint which seems to me to
be well founded in Gann principles. The purpose of this article is to take one idea used in Don's
work, and present it from a different approach, and yet arrive at the same useful conclusion. I
hope even Don will find my article to be an original insight to substantiate the validity of his
work.
Gann's geometric angles are trend lines drawn from prominent tops or bottoms at certain angles.
The most important angle is 45 degrees, which means the line's slope is one unit of price per unit
of time. (Note: Depending of the chart scale used, the line may or may not appear to be plotted
at a 45 degree angle.) For years, I thought this is what Gann analysts meant by the phrase
'squaring time and price.' However, Don's Pyrapoint method gave me a new insight, which is:
Price = Time squared

or

P=t^2

Let me take this mathematical relationship and develop it in this article. The above relationship
between price and time can be plotted on a chart as shown in this illustration. The time values of
10, 20, and 30 are marked by the three arrows.

For the sake of illustration, let's suppose a prominent top or bottom occurs at a price of 400. The
theory is that this significant point has a mathematical counterpart. Start a new time curve at
this point in time, and it will give us an expectation for a future top or bottom to occur on this
curve. This principle can be stated as 'When price meets time, a change is imminent.' This
'price meets time' relationship is shown in the following chart.

With the prominent top or bottom at P, if price meets the curve at point A it will do so in 18
bars. The time to A is the square root of the price at A. Price at A is 324. Square root of 324 is
18.
If price meets the curve at point B, it will do so in 20 bars. The time to B is the square root of
the price at B. Price at B is 400, therefore the time to B is 20 bars.
If price meets the curve at point C, it will do so in 22 bars. This is a very interesting concept!
Remember that price and time are related by the formula:

P= t ^ 2

or

t = sqrt( P )

Article: Trend Line Slope


In this article, I will develop the mathematics for the slope of a trend line using the price and
time relationship presented in the previous article. Let's work with the model illustrated in this
figure.

From the previous article, the next time curve will be t bars away for a given price P. At a time
t+1 price would meet the curve at price P1. Now, lets solve for the slope of the trend line shown
in blue which connects P and P1.
P=t^2
P1 = (t + 1) ^ 2 = t ^ 2 + 2 t + 1 = P + 2 t + 1
Slope = (Change in price) / (Change in time)
Change in price = P1 - P = P + 2 t + 1 - P = 2 t + 1 = 2 t + 2 - 1 = 2 [ t + 1] -1
Change in time = t + 1
Therefore, slope of P to P1 is = (2 [ t + 1] - 1) / (t+1) = 2 - 1 / (t+1) = 2 - 1 / sqrt( P1 )
If we normalize all prices to consider three significant digits, then all prices will fall in the range
of [100 ... 1000]. By substituting the price boundaries into the slope formula, we can get a range
of slopes as follows.
For a P1 of 100, the slope of the up trend line to 100 = 2 - 1 / 10 = 1.9
For a P1 of 1000, the slope of the up trend line to 1000 = 2 - 1 / 100 = 1.99
The slope of the up trend line at the midpoint of this price range is 2 - 1 / sqrt(500) = 1.96
Let's call this trend line a 45 degree line because we developed the slope using one unit of price
change from P to P1 with one unit of time t. For this 45 degree line, the slope is basically 2. I
think this is strong justification as to why Gann used 2 cents as the price grid interval of his daily
grain charts. Such a scale layout would naturally give Gann 45 degree angles with a slope of 2
cents per daily bar. I have shown that 2 is the slope of the upward 45 degree trend line that
develops from the price and time relationship given by the formula: P = t ^ 2.
One can solve for the slope of the downward trend line from P1 to P to obtain this result:

Slope of P1 to P = (-2 t - 1) / (t-1) = (-2 [t - 1] - 3 ) / (t-1) = -2 - 3 / (t-1) = -2 - 3 / (sqrt( P ) 1)


For a P of 100, the slope of the down trend line to 100 = -2 - 3/9 = -2.33
For a P of 1000, the slope of the down trend line to 1000 = -2 - 3/99 = -2.03
Again, the slope of the down trend line approaches a value of -2. Therefore, -2 is a good
approximation for the slope of a downward 45 degree trend line.

Article: Square Root Theory


William Dunnigan did extensive research in the early 1950's and published in 1954 and 1955.
He used the square root theory as part of his calculation of a profit objective. He considered this
method a 'golden' key and received recognition for his work in various journals. The square root
theory is that prices move in units of the square root, meaning prices at $64 (8 squared) would
move to $49 (7 squared) or to $81 (9 squared). The forecast price is one point up or down,
based on the square root. The theory says a price may move to a level that is a multiple of the
square root.
Since LC1G was used as an illustration in the first article, I thought you might be interested to
see the square root theory applied to the cattle chart. Nothing is a better teacher of a principle
than an example.

Let's forecast a price based on the Sept 13th low of $70.050. The first step is to normalize the
price to the range of 100 to 1000 by adjusting the decimal point. Find the square root of the
normalized value, add 1 point or a multiple number of points, and square this value to obtain the
forecast price.
1)
2)
2)
3)
4)
5)

Normalize 70050 to be 700.50


Square root of 700.50 is 26.467
Adding 1 gives a value of 27.467
27.467 squared is 754.43, which is the midpoint of the up move in the middle of November.
Adding 2 gives a value of 28.467
28.467 squared is 810.37. So 81037 is a forecast price. The Jan 16th high was 81075!!!!

Now, is it just a coincidence that a major high is within 4 cents of a price calculated from a major
low price? Or, does that make you want to look for this principle in other charts?
Tip: A price may move to a level that is a multiple of the square root.
As I studied the LC1G daily chart some more, I see that there is a significant high of $75.500 on
Jan 7th, 2000 (not shown in the chart above. However, Jan 7th is shown in the next chart). It
can be used to forecast the Sept 13th low as follows.
1) Normalize 75500 to be 755.00
2) Square root of 700.50 is 27.477
2) Subtract 1 gives a value of 26.477
3) 26.477 squared is 70105. So 70105 is a forecast price. The Sept 13th low was 70050, or
just a 5 cent difference!

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