Unravel the Mystery of Movement...
Thanks to a new TV script overlay simply called the 'Event Locator' we now have the ability to objectively count price movement in any financial market! If you've never seen ELC output before, just look up, you're seeing it now! This new tool marks every countable event in price flow and updates in real-time as candles form.
That's not all. A completely new counting framework has been discovered. This new framework gives us unprecedented insight into what markets are doing, helping us to see how trends are built and what causes them to end.
This site is dedicated to educating traders, investors, and organizations; giving them the tools and training they need to start counting price movement in a truly objective, scientific way.
- Erek Daniels
Lead Analyst/Writer, PriceCounting.com
erek@pricecounting.com
That's not all. A completely new counting framework has been discovered. This new framework gives us unprecedented insight into what markets are doing, helping us to see how trends are built and what causes them to end.
This site is dedicated to educating traders, investors, and organizations; giving them the tools and training they need to start counting price movement in a truly objective, scientific way.
- Erek Daniels
Lead Analyst/Writer, PriceCounting.com
erek@pricecounting.com
"Fractal processes associated with scaled, broad band spectra are 'information rich.'"
- Ary Goldberger
"If the object has a fractal order to it... then it will be possible with a few rules to decode it." - Michael Barnsley
"he found that oscillations often governed the dynamics of processes..."
"Behavior of a system that is not explicitly described by the behavior of the components of the system, and is therefore unexpected... important in the study of... complex systems, and an almost inevitable consequence of any multi-agent system." - Wiki.C2.com, defining "emergent behavior" (also called "Swarm" or "Hive Mind")
"Emergent behavior is a... defining property of complex systems." - Contextualizing Emergent Behavior in System of Systems Engineering using Gap Analysis - Hindawi website, authors Linda Ponta and Silvano Cincotti
First three quotes above from the book, Chaos: Making a New Science, 1987, pgs. 293 and 230 respectively
Third quote from Wiki.C2.com/?EmergentBehavior
- Ary Goldberger
"If the object has a fractal order to it... then it will be possible with a few rules to decode it." - Michael Barnsley
"he found that oscillations often governed the dynamics of processes..."
"Behavior of a system that is not explicitly described by the behavior of the components of the system, and is therefore unexpected... important in the study of... complex systems, and an almost inevitable consequence of any multi-agent system." - Wiki.C2.com, defining "emergent behavior" (also called "Swarm" or "Hive Mind")
"Emergent behavior is a... defining property of complex systems." - Contextualizing Emergent Behavior in System of Systems Engineering using Gap Analysis - Hindawi website, authors Linda Ponta and Silvano Cincotti
First three quotes above from the book, Chaos: Making a New Science, 1987, pgs. 293 and 230 respectively
Third quote from Wiki.C2.com/?EmergentBehavior
(All original content copyrighted, no portion may be copied, quoted, or redistributed.)
Is It Possible to Understand Price Movement?
It's possible to understand any ordered system. Though movement may look random, the best evidence shows it being organized and rule-based. If it's possible to decipher those rules then it will also be possible to use them in a framework that can accurately explain price movement. In fact, it is widely accepted that markets are fractal objects, and to reference Mr. Barnsley's comment above, a fractal object 'can be decoded with a few rules.'
Over the decades many have attempted to decode the movement of financial markets, but most of those efforts have been overly esoteric, looking for answers in reams of statistical market data. It seems that almost no one has looked for simple, visual, count-based rules of movement...
Over the decades many have attempted to decode the movement of financial markets, but most of those efforts have been overly esoteric, looking for answers in reams of statistical market data. It seems that almost no one has looked for simple, visual, count-based rules of movement...
What Makes Markets Move?
Although media outlets, brokers, investment advisors and others constantly put forward the idea of externally driven markets - markets driven by economic forces, political events, federal actions, and crowd sentiment - there is good evidence to show that complex, multi-agent systems like markets, are actually controlled by a known phenomenon called emergent behavior (see the Wiki.C2.com quote above).
EB "can appear when a number of simple entities (agents) operate in an environment, forming more complex behaviors." EB is not crowd psychology. It's a special type of intelligence that forms within large groups, operating independently of individual group members or even collective sentiment. Markets do not require an influx of external events or information to move. The movement arises simply from the fact that markets are multi-agent systems.
Markets generate their own internal information and meaning and are in no way reliant on external events or forces to accomplish movement.
Emergent Intelligence is the metaphysical underpinning of the Magenta Framework.
EB "can appear when a number of simple entities (agents) operate in an environment, forming more complex behaviors." EB is not crowd psychology. It's a special type of intelligence that forms within large groups, operating independently of individual group members or even collective sentiment. Markets do not require an influx of external events or information to move. The movement arises simply from the fact that markets are multi-agent systems.
Markets generate their own internal information and meaning and are in no way reliant on external events or forces to accomplish movement.
Emergent Intelligence is the metaphysical underpinning of the Magenta Framework.
To learn more about emergent behavior and emergent intelligence in markets see the following book:
Emergent Intelligence: The Market Mind and the Case for Internally Driven Smart Markets
Emergent Intelligence: The Market Mind and the Case for Internally Driven Smart Markets
What is Magenta?
Magenta is a new framework for explaining price movement in financial spaces. It describes the way markets themselves employ counting as a device to govern oscillations. This unique framework allows an analyst to accurately count price using a natural phenomena that occurs in price flow called separation (sometimes called "HIPS" and "LOPS"). Unlike Elliott Wave Principle which counts flat waves, Magenta's automated marking tool counts the jagged points within those waves. This is where information resides in a price sequence (see Ary Goldberger's quote above). The event becomes the basis and foundation for all price counting.
The Magenta Framework includes four main processes or systems: the prime process (count varies), equivalence or 'EQ' (count varies), cycles (2/4/6 count), and constant partial cycles (4/6 count). Each of these processes have their own counts and counting rules. For instance, the prime process includes FCT terminals in the count, while the other processes (except in specific cases) do not. All processes are complimentary and work together to build structures and movements, to create meaning, and to terminate trends.
In order to get a better idea of what the framework involves, consider the following questions:
What is an Event?
What is an FCT?
What is a Prime Process?
Where is the Safest Spot to Trade?
The Magenta Framework includes four main processes or systems: the prime process (count varies), equivalence or 'EQ' (count varies), cycles (2/4/6 count), and constant partial cycles (4/6 count). Each of these processes have their own counts and counting rules. For instance, the prime process includes FCT terminals in the count, while the other processes (except in specific cases) do not. All processes are complimentary and work together to build structures and movements, to create meaning, and to terminate trends.
In order to get a better idea of what the framework involves, consider the following questions:
What is an Event?
What is an FCT?
What is a Prime Process?
Where is the Safest Spot to Trade?
What is an Event?
Events in a price sequence appear around jagged areas where candle highs or lows jut out beyond their neighbors.
Due to the up-down-up cadence of movement, a non-jagged or smooth event can sometimes be paired with a jagged rough event. You can see instances of this in the chart below (smooth events are indicated with a square).
The Event Locator (available on TradingView.com) can automatically detect and mark both rough and smooth events in a chart. A tool such as this provides the scientific foundation for any legitimate count-based analysis and should always be used so that even non-visible events are detected and included in the count.
Due to the up-down-up cadence of movement, a non-jagged or smooth event can sometimes be paired with a jagged rough event. You can see instances of this in the chart below (smooth events are indicated with a square).
The Event Locator (available on TradingView.com) can automatically detect and mark both rough and smooth events in a chart. A tool such as this provides the scientific foundation for any legitimate count-based analysis and should always be used so that even non-visible events are detected and included in the count.
G1: Above: The Event Locator overlaid on a 1 hour EURUSD chart (from TradingView.com). Using points of separation within the sequence, the tool identifies and marks rough and smooth events (gray squares are 'smooth' events).
To add this tool to your TradingView charts, go to TV and search using the 'People' tab, search for "btc1019", click 'SCRIPTS' when my profile comes up, click on the most recent 'Event Locator' script (top left graphic), then scroll down and click 'Add to favorite indicators'. The tool will then appear in your 'Favorites' tab when you click the 'Indicators' button at the top of your TV chart.
G2: Below: The two types of events illustrated.
To add this tool to your TradingView charts, go to TV and search using the 'People' tab, search for "btc1019", click 'SCRIPTS' when my profile comes up, click on the most recent 'Event Locator' script (top left graphic), then scroll down and click 'Add to favorite indicators'. The tool will then appear in your 'Favorites' tab when you click the 'Indicators' button at the top of your TV chart.
G2: Below: The two types of events illustrated.
What is an FCT?
FCT is an acronym that stands for Fractured Counter Trend. All trends have counter trend movements within them, but not all price sequences have FCT's. If a counter trend movement contains events, as the one in the G3 graphic below does (red arrow), then it is a fractured counter trend. If a movement forms an FCT we call it a structure. If two or more FCT's form, we call it a super structure.
Even a single FCT can tell us much about what's happening in a price sequence. Once an FCT forms, we can identify prime values and look for equivalence (EQ) matches, a powerful means for determining when trends are ending.
Even a single FCT can tell us much about what's happening in a price sequence. Once an FCT forms, we can identify prime values and look for equivalence (EQ) matches, a powerful means for determining when trends are ending.
G3: An FCT (red arrow) forms in a downtrend. Notice that counting marks appear within the FCT between the low and high terminals. This is what makes it fractured. The FCT is then validated at the red target, once price breaches the low of the trend. At this point the movement becomes a structure and the prime values (yellow tag) can begin to be used.
What is a prime process?
A prime process is the market's way of identifying certain values near the start of a structure, then using them in an internal count to end the structure. Up to 2 sets of prime values can play out at the same time in a super structure. These values can play out in an alternating (dual value) or static (single value) sequence. The half prime value is sometimes used to cap the sequence. Notice how a prime set plays out in the 6 hour super structure shown below...
G4: An 8/6/4 prime set appears at point C. We get these values from counting the sequence between points A and C. The market then uses a static single value (a repeating 8 count) to arrive at point K - the structural endpoint.
Note: It is important to realize that the prime process by itself did not end this trend. FCT EQ (the total count of all the fractured counter-trends in the sequence) equals 8 (our high prime) by the time we pass point J. Additionally, trending EQ (the total count of all the trending areas of the sequence) equals 24 (a multiple of 8) at point K. Finally, a cycle process that includes a 6/4 type/anti-type which extends through push 2 finishes counting at point K. The convergence of all of these processes at point K is what caused the trend pivot.
For more information about these processes please see Cycle Counting Forex Super Structures with Magenta.
(To be notified when this book is published, please email the author at erek@pricecounting.com).
Note: It is important to realize that the prime process by itself did not end this trend. FCT EQ (the total count of all the fractured counter-trends in the sequence) equals 8 (our high prime) by the time we pass point J. Additionally, trending EQ (the total count of all the trending areas of the sequence) equals 24 (a multiple of 8) at point K. Finally, a cycle process that includes a 6/4 type/anti-type which extends through push 2 finishes counting at point K. The convergence of all of these processes at point K is what caused the trend pivot.
For more information about these processes please see Cycle Counting Forex Super Structures with Magenta.
(To be notified when this book is published, please email the author at erek@pricecounting.com).
In the chart above the green tags are location labels, the yellow ones are the prime process itself. First, we have to identify the prime values. If you count from A to C you get 8. So 8 is our high prime. If you count from A to C again but exclude the FCT terminals, you get 6. So 6 is our low prime. The half prime will always be the even numbered half of one of the prime values. So 4 is our half prime.
The idea is that we want to wait till either our trending or counter-trending EQ matches our high/low prime values. In the G4 sequence above, FCT EQ hits 8 shortly after passing point J. This is the time to focus on prime sequencing and trending EQ. Then, at point Z, trending EQ equals 24 (a multiple of 8).
There are various types of equivalence. Not all types correlate to the prime values. Trending EQ and FCT EQ do not have be operative at the same time. For instance, if we get a prime match with FCT EQ, that doesn't mean the trending EQ also has to match. A single match or relationship is all that's required. However, in the sequence above, we do get a dual match (multiples of the prime also count as a match, as do matches with the 'sum of primes' such as the trending EQ match of 18 (12+6) to the 14/12-6 set in graphic G6 below).
But how would we have known that this particular 8 count would end the sequence?
Since this is a super structure and has multiple FCT's, we can get a second prime set from FCT 2. Notice how this prime process works along with the first one.
The idea is that we want to wait till either our trending or counter-trending EQ matches our high/low prime values. In the G4 sequence above, FCT EQ hits 8 shortly after passing point J. This is the time to focus on prime sequencing and trending EQ. Then, at point Z, trending EQ equals 24 (a multiple of 8).
There are various types of equivalence. Not all types correlate to the prime values. Trending EQ and FCT EQ do not have be operative at the same time. For instance, if we get a prime match with FCT EQ, that doesn't mean the trending EQ also has to match. A single match or relationship is all that's required. However, in the sequence above, we do get a dual match (multiples of the prime also count as a match, as do matches with the 'sum of primes' such as the trending EQ match of 18 (12+6) to the 14/12-6 set in graphic G6 below).
But how would we have known that this particular 8 count would end the sequence?
Since this is a super structure and has multiple FCT's, we can get a second prime set from FCT 2. Notice how this prime process works along with the first one.
G5: Using two sets of prime values to locate the endpoint in a long down trend. Even though they both lined up at point F, the X/X anti-type did not line up with the primes until point K. So if we consider all processes, K is the only point of total convergence.
To get the values for the second prime set we count from A to E. At E we get 16/14 and a half prime of 8 for set2 (orange tags). If we start counting our second set from point E we see that 16 lands right on the cross-count at point F and lines up with 8 from set1. Counting our set2 half prime of 8 from point F we land at point K which lines up with our 8 count from set1. Our counts line up or converge.
When you're tracking two prime processes like this, convergence will indicate the possible turning points for the trend. Here we have points of convergence at F and K. (Actually, in this example, our counts never diverged. That's because the high prime of set2 (16) is a multiple of the high prime of set1 (8). Typically the count will begin with divergence, being out-of-sync for a time, then end with a convergence point.)
Some super structures will have a few points of convergence and some will have only one - at the endpoint. Higher time frames can be used to filter out some of these points. Below we see the same price sequence as above (highlighted area) in a 1 day chart. Here we also use prime values to anticipate a turn. This chart shows that the prime is met below 1.17618 (also shown in chart G5) since this ends our 12 count (which is a prime value). So that's probably why our first point of convergence in the 6 hour chart didn't pan out.
When you're tracking two prime processes like this, convergence will indicate the possible turning points for the trend. Here we have points of convergence at F and K. (Actually, in this example, our counts never diverged. That's because the high prime of set2 (16) is a multiple of the high prime of set1 (8). Typically the count will begin with divergence, being out-of-sync for a time, then end with a convergence point.)
Some super structures will have a few points of convergence and some will have only one - at the endpoint. Higher time frames can be used to filter out some of these points. Below we see the same price sequence as above (highlighted area) in a 1 day chart. Here we also use prime values to anticipate a turn. This chart shows that the prime is met below 1.17618 (also shown in chart G5) since this ends our 12 count (which is a prime value). So that's probably why our first point of convergence in the 6 hour chart didn't pan out.
G6: Using a higher time frame to help filter out convergence areas in the 6 hour chart. This chart also shows how a prime value might play out in a standard structure containing just one FCT. The count from the price high of 1.23496 to the high FCT terminal gave us the values that would be used to end the structure, namely 14, 12, and 6. Subsequently, we see in the red shaded area, that a 12 count played out to actually end the sequence.
Since prime processes are so important in price movement, let's consider just one more example...
G7: Two sets of prime values based on two FCT's play out and finally converge at the structural endpoint.
Our first prime set above (yellow sequence) is connected to the first FCT of the structure. The values are 8/6/4. If we count 6/8/6 in an alternating fashion, notice that we land on the DMC (blue mark). This confirms that we have the correct sequencing. If we try an 8/6/8 count we miss the DMC. Our count then goes on to locate the endpoint and converge with the repeating 12 from set2.
Where is the Safest Spot to Trade?
The safest spot to enter a market is the point at which we have the most information to guide a trade, and contrary to popular thinking, that does not mean the middle of an established trend - it means toward the end of a sequence. It means learning to 'time' trend turns.
The safest spot turns out to be near the point of prime convergence in a super structure where we also have an EQ relationship, ideally to the high prime. When we have the benefit of two prime sets, we can often use both counts to correct any sequencing errors that might be present in either count before the sequence ends and the trend turns.
The bottom line is this, with a super structure you can get more information from the price sequence and you can use that information against itself to make better trading decisions.
The safest spot turns out to be near the point of prime convergence in a super structure where we also have an EQ relationship, ideally to the high prime. When we have the benefit of two prime sets, we can often use both counts to correct any sequencing errors that might be present in either count before the sequence ends and the trend turns.
The bottom line is this, with a super structure you can get more information from the price sequence and you can use that information against itself to make better trading decisions.
Trading Tools
I'm excited to announce the development of a new tool for traders everywhere!
The Sandtiger TradingView indicator will be the first trading tool ever that can count price movement in a legitimate and objective way - using naturally occurring 'fractal' events. Sandtiger will focus only on the 3 most potent prime counts possible. These will be the most reliable with the highest probability of success...
1. Static high prime count (ie. 12, 12...)
2. Alternating prime count
(w/ alerts on every other value starting w/ the 2nd)
(ie. 22, 22... (that's 12+10, 12+10))
3. All primes count (ie. 12, 10, 6)
Check back here to stay updated on the dev process!
The Sandtiger TradingView indicator will be the first trading tool ever that can count price movement in a legitimate and objective way - using naturally occurring 'fractal' events. Sandtiger will focus only on the 3 most potent prime counts possible. These will be the most reliable with the highest probability of success...
1. Static high prime count (ie. 12, 12...)
2. Alternating prime count
(w/ alerts on every other value starting w/ the 2nd)
(ie. 22, 22... (that's 12+10, 12+10))
3. All primes count (ie. 12, 10, 6)
Check back here to stay updated on the dev process!
8/24/22: Updated Event Locator to v5, removed excess coding and expanded code comments
8/26/22: Contacted programmer (@SimpleCryptoLife) about idea for 'Sandtiger'
8/29/22: Settled on 4 prime counts that I'd like the tool to be capable of tracking. They are static high prime (12, 12...), static low prime (10, 10...), alternating primes (12, 10, 12...), and 'all primes' (12, 10, 6). While not fully automated, the tool will be designed to work with minimal user input. It will be a 'set and forget' design that will include trade entry and an automatic trailing stop for the new trade. The current idea is that, on startup, the user will select two bars. The first bar will be the high/low of the new trend, the second will be the terminal of the first fractured pullback. After selecting these points the user selects one of the prime counts. The tool then tracks that count from the second selected bar and sends a text alert (could be a trade entry alert if 'Pineconnector' (MT4) is used) each time a prime value is hit. Ultimately the tool should be able to track many types of prime counts simultaneously...
8/29/22: Submitted a detailed description for the developer... project accepted. Project in development...
9/4/22: Steps 1-5 of 11 completed. Step 6 codes the ability to count...
9/16/22: Sent steps 6 & 7 to developer... work will be done this coming week...
9/21/22: Step 6 completed, the tool can now count... ironing out some details and testing count accuracy...
8/26/22: Contacted programmer (@SimpleCryptoLife) about idea for 'Sandtiger'
8/29/22: Settled on 4 prime counts that I'd like the tool to be capable of tracking. They are static high prime (12, 12...), static low prime (10, 10...), alternating primes (12, 10, 12...), and 'all primes' (12, 10, 6). While not fully automated, the tool will be designed to work with minimal user input. It will be a 'set and forget' design that will include trade entry and an automatic trailing stop for the new trade. The current idea is that, on startup, the user will select two bars. The first bar will be the high/low of the new trend, the second will be the terminal of the first fractured pullback. After selecting these points the user selects one of the prime counts. The tool then tracks that count from the second selected bar and sends a text alert (could be a trade entry alert if 'Pineconnector' (MT4) is used) each time a prime value is hit. Ultimately the tool should be able to track many types of prime counts simultaneously...
8/29/22: Submitted a detailed description for the developer... project accepted. Project in development...
9/4/22: Steps 1-5 of 11 completed. Step 6 codes the ability to count...
9/16/22: Sent steps 6 & 7 to developer... work will be done this coming week...
9/21/22: Step 6 completed, the tool can now count... ironing out some details and testing count accuracy...
Books
Published 2019
Non-Toxic Trading: Acquiring the Essential View of Markets focuses on the way we view and understand markets. It examines whether common views of externally driven markets are sound and whether external events are really required as market drivers.
This is my first book published August 6, 2019. Front and back covers are pictured above.
The book is a 54 page paperback measuring 6x9 inches with a soft matte finish.
This is my first book published August 6, 2019. Front and back covers are pictured above.
The book is a 54 page paperback measuring 6x9 inches with a soft matte finish.
Published 2021
Emergent Intelligence: The Market Mind and the Case for Internally Driven Smart Markets presents the price action evidence proving that emergent behavior is at work in financial markets of all sorts, from Forex to Crypto to Stocks. It uses a software event locator and cutting-edge analysis (developed just over the past few years) to show the reader how markets create their own internal meaning and relationships.
This is my second book published October 24, 2021. Front and back covers are pictured above.
The book is a 59 page paperback measuring 7x10 inches with a soft matte finish. A hardback edition is also in the works.
This is my second book published October 24, 2021. Front and back covers are pictured above.
The book is a 59 page paperback measuring 7x10 inches with a soft matte finish. A hardback edition is also in the works.
Coming Soon
Five years in the making, Cycle Counting Forex Super Structures with Magenta introduces and explains all aspects of the Magenta Framework in detail. The book explains why counting is the only form of 'native analysis' in financial markets. It covers separation, FCT's, types of counts, cycles, types/antitypes and partial cycles, prime values, signals, EQ relationships and more. Basically everything gained over 5 years of throwing out the status quo and media noise and focusing on nothing but how price moves. I really shot for the ultimate trading book here, both in quality of content and format.
This book has yet to be published. It's designed to be a chart analysts' workbook. Front and back covers are pictured above.
The book is a 100+ page oversized paperback measuring 8.5x11 inches and featuring full color, full page charts with a glossy cover finish.
This book has yet to be published. It's designed to be a chart analysts' workbook. Front and back covers are pictured above.
The book is a 100+ page oversized paperback measuring 8.5x11 inches and featuring full color, full page charts with a glossy cover finish.
Coming Soon
Epic Fail considers the gaping holes in Elliott Wave Theory and how EWI has made millions promoting a defective explanation of market movement over the last 4 decades.
This book has yet to be published. Front and back covers are pictured above.
The book is a xx page paperback measuring 7x10 inches with a soft matte finish.
This book has yet to be published. Front and back covers are pictured above.
The book is a xx page paperback measuring 7x10 inches with a soft matte finish.
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