More Chan Theory: Simplified Trend and Pivot Analysis with Moving Averages

Summary

More Chan Theory is presented as a practical simplification of Chan-style price analysis. It drops the traditional recursive pen-and-segment hierarchy, using two levels: the current-level pivot and lower-level segments. The method uses MA5 and MA34 to help mark segment boundaries, while moving-average entanglement and overlapping candlesticks define a pivot. Standard pivots are described as containing three, five, or seven lower-level segments, with nine segments triggering an upgrade.

The framework classifies consolidation around one pivot and trends as two or more same-direction, same-level, non-overlapping pivots. It emphasizes third buy and sell points, using higher timeframes to set direction and lower-timeframe nesting to refine entries, with moving averages as confirmation. The text offers definitions and a learning sequence, but no quantified test, worked market example, or evidence of profitability. Its rules are summarized rather than fully operationalized, so consistent implementation may require further specification.

Key ideas

• The method simplifies traditional Chan analysis by using pivots and lower-level segments instead of recursive pen construction.
• MA5 and MA34 help identify segment boundaries, while average entanglement and candle overlap define pivots.
• Consolidation is associated with one standard pivot, while a trend contains multiple aligned, non-overlapping pivots.
• Third buy and sell points are central, with higher timeframes setting bias and lower timeframes refining entries.
• The document describes a framework but supplies no quantified performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.