Time Dilation Theory Notes

Introduction to Time Dilation Theory (TDT)

  • Introduction to basic counting techniques in financial markets.
  • Four main topics covered:
    • Counting from highs and lows.
    • Understanding market cycles via counting.
    • Counting using multiple time frames.
    • Counting in situational cases.

Counting Examples Overview

  • Anticipating reversals, expansions, consolidations, or retracements.
  • Examples provided without comprehensive teaching initially.

Bullish Closed Candles: Expansion and Retracement

  • Example 1:
    • Price expands over four candles.
    • Retraces over three candles.
    • Expansion restarts at the eighth candle.
    • The seventh candle marks a short-term low.
    • Further expansion of six candles, peaking at the thirteenth candle.
    • Contraction occurs between candles 13 and 17.
    • The cycle ends at the twenty-first candle.
  • Example 2:
    • Initial rapid expansion over three candles.
    • Retracement over four candles, marking the short-term low at the seventh candle.
    • Continues to thirteenth candle before a reversal.
    • Expansion from the twenty-first candle extends to the thirty-first candle.
  • Example 3:
    • Classic price run from $3.05$ to $7$, creating a short-term high by the thirteenth candle.
    • Reversal occurs, expanding to the twenty-first candle to conclude the cycle.
  • Turning points in time are reversals, expansions, and retracements.
  • Consolidations are excluded from the initial focal point.
  • Framing price swings becomes easier with basic counting comprehension.
  • Bearish closed candles are ignored during bullish counting, and bullish closed candles during bearish counting.

Rules for Strict Counting

  • Special cases exist where the rule is not applicable, but stick to the strict counting rule.
  • Backtest strictly to understand price swings.
  • Start counting at the lowest low or highest high.
  • For bullish counting, if the lowest low is created by a bearish closed candle, ignore it.
  • For bearish counting, if the highest high is created by a bullish closed candle, ignore it.
  • Doji candles (with almost no body) are countable for both bullish and bearish counts.
  • Chart 1:
    • Start counting using the bullish closed candle that created the lowest low.
  • Chart 2:
    • Start counting using the Doji candle that didn't create the highest high because the highest high was created by a bullish closed candle.
  • Pick the bearish closed candle just after the bullish closed candle that created the highest high. This leads to $7$ and $9$ as short-term turning points.
  • Pick another high to align two different counts for more precision.
  • Pick the bullish closed candle that didn't even create the lowest low.
  • The strict counting rule is still applied by picking the bullish closed candle, and it does not matter if it created the lowest low.

Market Phases or Cycles

  • Consolidations typically last $10$ or $20$ candles.
  • Consolidations of $7$ or $13$ candles are less common and suggest a potential market shift.
  • Expansions and reversals generally show $4$ or $7$ candle durations.
  • $13$ and $21$ candle expansions are less common.
  • $13$ and $21$ candle reversals are common.
  • Retracements often last $3$ or $4$ candles.
  • Ratios and numerology connect to these observations.
  • Example: $7$ is more often seen as $3+4$ or $4+3$ than $2+5$.

Exceptional Counting Rules

  • Strictly choose the bullish close candle that initiates expansion after consolidation is abandoned, regardless of the lowest low formation within consolidations.
  • Time provides legitimacy to existence.
  • Time is the true unit of measure.
  • Price cannot exist without time.
  • Counting consolidations to predict the next expansion, retracement, or reversal is less valuable than counting expansions/reversals.
  • Choose the candle that initiates expansion, lifting the price from consolidation.
  • Time is valued at exact zero.
  • What you see inside consolidations is not the price of that asset.

Exceptional Counting with Irrelevant Structure

  • Focus on long consolidations with many irrelevant short-term highs and lows.
  • Black and red numbered counting.
  • Mark the highest high before the price drop.
  • Pick the candle where expansion began, lifting the price from consolidation.
  • Develop a better understanding to count irrelevant structure in time as an exceptional counting.

Multi-Time Frame Counting

  • Essential for consistent trading and profitability.
  • Markets, assets, the universe, and life exhibit fractality.
  • Human creations and actions include fractal nature of time and price.

Example: Pound Dollar

  • Daily Chart:
    • Count from low to high: $1, 2, 3, 4, 5, 6, 7$, marking a turning point.
  • One-Hour Chart:
    • Focus on the seventh day.
    • The seventh day starts with a relatively long consolidation.
    • Expansion begins later.
    • Count the expansion leaving consolidation, yielding $4, 7,$ and $20$ as short-term turning points.
  • Repeat the same by counting for more than two timeframes.