Don't talk about what you don't know: stay with porn but do not come into Science Sornette did never pretend to crack all the market's code since his model is of stochastic type haha ! Stochastic model by definition uncapsulate acceptance of some ignorance.
Drawing trendlines will give you support and resistance but won't tell you the probabilities that they will be broken or not. And drawing trendlines supposed that you wait at least for 2 points if not three to appear whereas some model could tell you before because it predicts whereas drawing trendlines is extrapolating after the facts. And trendlines are not as precise as one pretends because of noise around the level because they are not the true supports and resistances but only approximations whereas true model can give a more accurate precision. And more precision means practically tighter stop of a factor of several hundred %. On PDCA cycle I talked above I would rather consider the use of trendlines during the D phase not during the P phase.
No it is not the same thing as gann because power law used in times series modelling is of stochastic nature. Random Walk is a special case of power law also (1/2). Gann squaring time and price is not stochastic. It is deterministic and since he said that he had discovered the true equations of demand and offer of the market it can only be that thesess equations are of the same nature as mine, but he never wanted to show them not only the equations but even the results - even also to his direct associates - instead he transformed them into geometry rules the same kind of transformation I made with my pseudo-elliott charts the difference I show the underlying true model charts whereas gann didn't want to. The reasons could be that he didn't want people to discover the equations from the results and/or it is more marketable to sell esoteric mysteries about golden numbers to people without explaining them where it does come from. The cost of his seminar was 5000$ dollar at that time already
To harry: Trendlines , if used properly can place trades within 10 minutes or less. To use them successfully , you have to understand little bit more about them then you do now. My point was that many professors just complicating things more then necessary and producing unusable theories in process. Walter
Sornette is not talking about trading. Sornette is talking about market's model which is a different domain. His target is not you but rather the institutions who needs forecast in long term range and not 10 minutes range. As for using trendlines of course you can I didn't said the contrary and I use them myself as I said during the D (Do) phase but not during the P (Plan) phase since they don't even exist before market opens. That's why I have make a summary of trendlines and patterns in traditional TA: http://perso.wanadoo.fr/harrytrader/_sgt/m1m2s2_1.htm and illustrated that in a flash animation: http://perso.wanadoo.fr/harrytrader/_tutorial/trade_setup_truncation_wave2.html
This is all a waste of time. These Phd's have finally found a field where they can get decent-paying jobs and are trying to milk it for all its worth. The post 2004 predictions are a joke. The Republicans could get overwhelming majorities in the elections and abolish cap gains taxes. The Dem's could take the White House and Congress and impose punitive taxation, because it's "fair." I guess the cycle frequency would change. William O'Neill and Jeff Cooper both frequently make the observation that it is not necessary to predict the market but only to understand where you are now.
<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=243282> You should remark that this TL (acronym meaning Top Local - which is calculated IN ADVANCE not AFTER of course) happened at time unit 10. By observation a cycle is 9 times units and 10 is the extreme limit (sort of "resistance" in time), like the TL price is just after the BRK (BREAK price) as its resistance. So the TL in price or the 10 times unit are sort of presignal (it will become a signal only after confirmation). Remarkably and INDEPENDANTLY (since the fundamental equations above don't use golden ratio as INPUT whereas the chart below takes only the first two values from the fundamental chart and use golden ratios) there is a golden ratio at a value that was very near the fundamental one of 8524 which was 8523. And remarkably also it is qualified as continuation presignal. <IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=243886> If this was just an exceptional case among several this would not be significant statistically but it is not and today this is the only formal way to really demonstrate the existence of geometry in market since without a formal model opponents could always pretend than the "golden" analysts cheat by chosing points that fit the ratios whereas with a formal model that doesn't suppose golden ratio the points cant be chosen arbitrarily since they are automatically predetermined everyday and not under the influence of human subjectivity.
If his theory and methodology are true (which is a HUGE "if"), it will dissipate once people replicate. D.E. Shaw example should more than provide guidance. Market are efficient for the most part. The Inefficiency gets ironed out ... eventually.