When to Apply Ellipse

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Ellipse Projection (Shadow)-- Once the Ellipse study is applied, it marks a line ending with a shadow to project the path it anticipates the Ellipse to move as we now track for future time to intercept with the future price movement. The steeper the angle, the quicker we can anticipate the Ellipse moving toward the price as less time may be factored into the equation.

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Here we see an example of where an Ellipse was first activated to where it eventually arrives at a future time and price. This example shows the ideal reaction one would like to see happen when using the Ellipse study.

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Evaluating an Ellipse Application from Start to Arrival

Let's review how the Ellipse is designed to work. In this example we show an uptrend. We begin to anticipate profit-taking. Because we want to trade into this price swing we activate the the Ellipse study to better time our buy and help us pick the optimal price where to buy.

We take an Ellipse measurement from the beginning and to the current end of the price swing. Below is an example.

The Ellipse is now displayed at a start point. It is now activated. It moves toward the price as more time is added. The Ellipse shows a "projected path" it should move toward. The Ellipse wiil ultimately meet up with the price to define a optimal trading setup.

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As the prices continue to retrace, the Ellipse moves closer...

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... and the Ellipse moves closer.... The distance between the current Ellipse and its shadow (projection) continues to narrow as it gets closer to the prices.

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Once the Projected shadow meets the price, you can either use a triggering technique such as the 6/4 DAM Channels or using the Regression Trend Channel to confirm a trade setup. These techniques are discussed in great detail in the Seminar Videos.

You can also just use that Ellipse as a Directional Level (DL), or a level of key indication for future direction. In this example as long as it holds the lowest part of that Ellipse, odds are very good the pullback is over and the trend should build to rally again. It it continues to weaken after hitting the Ellipse, odds are not so good any trade initiated at the Ellipse will be managable or lower-risk anymore.

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The actual Ellipse continued to move up until it intercepts the price. In this example the price held and returns the previous rally, testing the last high. The low is confirmed with the Ellipse holding....

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The Ellipse study provides three options: Normal, Short and Long. In most cases, the normal setting should be used. It is the benchmark. So far all have talked about is using the Normal setting. There are othe situations where other settings can and should be used, but we will address that later. For example, one situation that requires using both the short and normal Ellipse is whenthe 10/70 Oscillator is above its strength band and the market is in a massive Wave Three. More examples will be discussed later, as soon as time permits.

(Remember to use the eSignalCentral BBS "Search" feature. It is located at the bottom right corner of the AGET Forum page when you first enter the Advanced GET Forum. Search for the word "Ellipse." Read previous threads for more details where the Ellipse study is discussed and illustrated.)

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IF you would like to read the new PDF , "Review of the Ellipse Study," click on this.