During the webinar, we saw the Square of 144 work in different ways on Woolworths. Ultimately, it will be up to you to make a decision as to HOW you want to use the Square of 144 on your market. You will make this decision by applying the Square of 144 in different ways, observing the results and then “rating” each one as being useful or not useful. There is no law that says you MUST use the Square of 144 on every market, or that you MUST use it in any particular way.
This exercise will be about looking at the bigger picture on Wesfarmers, and applying the Square of 144. I will give you a series of instructions, and you will apply them one at a time to Wesfarmers, deciding as you go along whether this is something that would have been helpful or not.
- Run a Square of 144 from the All Time Low of $2 in May/June 1985, using a point size of 0.01 and the “interval type” to days. As we did in Exercise 8, only use Horizontal Lines and the Border. Add enough rows and columns so that your Squares cover the entire market.
- Adjust the point size of the above square to 0.1, and the interval type to Weeks instead of Days.
- Now try changing the Start Value (the price you are running the Square from) from 2.00 to 0.00. This is another way of applying the Square of 144.
For each of these applications, there is only one question – based on the previous history of this market, do I think that using the Square of 144 in this form would help me to make better trading decisions going forward?
Again, don’t go straight to the answers – work through this for yourself, first.