Mikula Forecasting Company

MarketWarrior: Swing Projector Type #3 Sell Signal

In this example we are going to work with a daily chart for the December 2009 Globex Eurodollar contract. The Type #3 Sell Signal uses two MarketWarrior indicators: the Swing Projector and the Gann Angle Fan. The chart below shows the Gann Angle Fan starting from the Eurodollar low in June 2008. This chart is set to a fixed price time scale of 1 bar to 0.05. This same fixed value is used for the Gann Angles, so the Gann 1x1 angle moves up at a slope of 0.05 per bar.

I will describe the Swing Projector Type #3 Sell Signal in terms of 5 steps that a trader can watch for.

1) First, the Gann angle must starts up from a bottom.

2) Second, the price must have fallen below a Gann angle. I prefer to use one of the three primary Gann angles which are the 2x1, 1x1 and 1x2 angles but the other Gann angles can be used.

3) Third, the price then must move from below the Gann angle, back up to the Gann angle.

4) Fourth, while step 3 is occurring the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a top is the red downward triangle with a "T" inside. On the chart below I have draw the labeled "A1" and drawn an arrow pointing to where step 3 and 4 are occurring. The label "A1" identifies where the price has moved up to the Gann angle and the Swing Projector is showing a large swing Warning symbol.

5) The fifth and final step is simply to see the price turn down and fall away from the Gann angle. When you see this final event you should look for an opportunity to sell short.

On the chart below the sell signal has just been given. The price should now see a downward swing which is appropriate for a swing trader so sell short and trade profitably.