Equidistant Levels Explained

The chart above is that of the equidistant
levels, or EL, for the SP-500.

The basic principle behind the EL, is that the markets
move in fairly consistent intervals.

The EL provides two important factors for traders:

-Support / Resistance.

-The Interval for entry, objective and stop-loss.

EL can be used for intraday trading or long-term
trading.

Take the chart above as an example.

EL Interval = 4.
Today's High= 1497.32 Low= 1488.67 Close= 1494.07

Intraday Trading Example.
Say you are a bull for tomorrow's session. You
expect a little weakness. You can use today's low
as an entry point since it falls on a EL 1488.66.
Another possible entry point would be at 4(one Interval) points
below the close, or, 1490.(It depends on how bullish you are)
My first objective would be 4 sp-point(one Interval).
Since you are a bull, you can choose 6 sp-points
(1.5*Interval) near the unchanged level for the SP.
You can re-enter at 1492 after a 2 point pullback (.5*Interval)
and set a target at 4 points higher at 1496.
The possibilities are infinite and depend on your trading style
and outlook.

Trading is difficult, and any little edge is welcome.
The Interval of 4 points provides you with a concrete
number to deal with.

If the market fails to come to your level, you can use
the low given by the market and expect a move 4 points
above that level.

I also use my Daily Up/Down indicator as a bias for
direction.

If you are patient enough to wait for retracements
to EL levels while taking profits at objectives,
you can make money even if you get the direction of
the market wrong!

For longer-term trading, you just have to adjust
your sights. You may want to wait for 1464.5 as
an entry point and set your objective at 1504.8,
for example.