Geometric Trading

Cryptocurrencies are the bane of every government (every central bank) on earth, but they are wonderful for the average person who has taken the time to understand them.  In addition to being deflationary currencies in most cases (i.e., their value goes up over time, rather than down, as do all fiat currencies), they are quite difficult for government stooges to track and monitor (not impossible, just difficult).

In addition to the myriad of benefits cryptocurrencies offer citizens of the world, they also offer a very exciting trading platform.  Many people have made fortunes trading cryptocurrencies like bitcoin.  Of course, others have lost considerable sums in the same arena.  This is the paradox of trading in general, no matter what the market.

Most traders utilize tools and practices in their trading that are widely known and practiced.  Indicators, moving averages, Elliott Wave, volume, stochastics and many others come to mind.  It is not our  intent to disparage such methods which have led a few traders to success.  However, the inescapable truth is that most traders utilize these same tools, and these traders typically lose money month after month, while a small group of anywhere from 2-10% of all traders routinely take their money.

What is the difference between the winners and losers?  In our opinion, there are 2 important differences

  1. Successful traders learn to control their greed and fear.  They enter and exit trades when their system tells them to, as opposed to when they have a hunch, or are gripped in a state of excitement or fear.  This discipline can’t easily be taught by a teacher.  It must be learned by experience.  Even then, it is a daily, life-long battle.
  2. Successful traders do not rely on the same tools and indicators the masses use.  They are familiar with the indicators, averages, etc.  They have studied them and know how they are used.  But successful traders understand that if they primarily use the trading tools the great unwashed typically use, they will likely join their ranks.

Legends like Gann, Bayer, and Elliot achieved legendary status by using tools that make little sense to a thinking man.  They are esoteric.  Elliott made his fortune trading a system that assumed that markets MUST move in certain wave counts.  The very idea that markets must do anything at all seems preposterous.  Yet it a truism that they do.  Bayer made his fortune with a number of unique tools, one of which was the use of ovals on the chart. A simple geometric construct he used to great effect.

WD Gann was arguably the master of all time.  He declined to publicly comment on his system.  He would always say things like “you would not believe me anyways”.  He had many esoteric tricks up his sleeve.  But one thing that stands out was his comments about “squaring the circle”.  It sounds profound, but what does it mean?  It seems Gann was a Freemason, and we note that the masonic logo contains a compass and a square.  These are tools for drawing circles and squares.  So, does the highest echelon know something about geometry that they are not telling us?

Years later, we came across a man who explained that markets, while not entirely predictable, are bound by constraints that are easily identified by simple 3rd grade geometry.  Circles and squares.  His words set us on a path of study that continues to this day.  We have learned that markets almost always turn and accelerate at certain pre-defined places on a price chart, and those places can be easily identified.  This is not to say that it is trivial to know WHICH of those places markets will turn at. But still, it is almost an unfair advantage to know where the sweet spots on a chart are – minutes, hours, days, weeks in advance.

We have been studying for a couple decades now.  We are still learning and maintain hope to figure it all out before it’s our time to go.  But we are happy to share what we have learned with those that care to study with us.  If you are so inclined, feel free to read our blog we try to publish each morning.

Better yet, get more information about the school.

Best,

Jim Fredrickson