Founder of Danielcode
Program(s) Developed: Danielcode Online
Interview Date: July, 2013
Interviewed by John F. Gallwas, Founder of Striker Securities, Inc.
John Needham is a well known and highly regarded author and market analyst, who lives and works in New Zealand , over 8,200 air miles from Chicago. Mr. Needham, through extensive research, has demystified Chapter 12 of the Bible's Old Testament Book of Daniel, using proprietary algorithms to convert the biblical "time" referenced into "price" points indicative of support and resistance levels for all markets. His services have attracted a wide following due in part because he has made his signals more "user friendly". Striker is currently servicing Daniel Code traders at three different clearing firms.
Mr. Needham, an Attorney of the Supreme Court of NSW, Australia, is the founder of "The Danielcode-Online" which offers market research and trade advisory services to individuals and institutions worldwide.
John Gallwas: Please give us a brief review of the mileposts that led you to the discovery of how to convert the Danielcode numbers to market pricing points.
John Needham: Like most great journeys John, this one started with a single step. I stopped trading. I had for many years been the most motivated and optimistic trader on the planet. I devoured WD Gann courses, bought tens of thousands of Dollars' worth (strange word) of the material being hawked by Gann pundits and even had agents in San Francisco and London buying up original Gann letters and charts for big money. I even paid one of Gann's associates a large fee to talk with me on the phone for an hour. Eventually the truth of that whole business became clear. Gann was a great marketer. In fact he taught brokers how to enchant clients and the modern day Gann pushers just followed his lead. Some of Gann's stuff actually came from his mentor Sepharial a London mystic, and strangely that was the good stuff.
From Gann I started a search for a more sensible and logical explanation of market behavior. I read all the books and travelled the world attending seminars from the leading teachers in the industry. I learned a lot of trading theory and whilst most of it worked well enough to keep our gurus in the business, it didn't work consistently enough for me. And it didn't explain market behavior in a rational way. The rules were either soft or ambiguous and as an Attorney, my propensity is to trust hard evidence and a rules based system. Better still if it is a mathematical system as numbers are the universal language of our world and don't lie. And so, after chasing the dream for 6-8 years I stopped trading.
And I thought. I put away the books of others and mothballed all of those charts and documents I had collected from various teaching seminars and I just sat and thought for months. Many months. Eventually the realization came to me that there was indeed a set of rules that governed market behavior. And that these rules were immutable and constant. That was the first big breakthrough. From these rules we could determine real support and resistance which is unlike anything taught before. We have for any chart on any timeframe a set of numbers that determine where markets will turn. And you can prove this for yourself. At the Danielcode website we have over 22,000 charts that I have published for members since 2007 and you can see each of them under the "Chart Archives" tab at our website. Please allow some time for the file to open as it is massive.
So that was the first milestone. I believe markets turn and only turn at DC numbers and we know what those numbers are. This is huge!
From this insight we can say that markets are rational, orderly and sometimes predictable. I can't emphasize enough how astonishing these numbers on the DC Members Charts are. All markets in all conditions including supposed news events and full blown market crashes observe the DC numbers. In fact, markets are ruled by the Danielcode and that's a really big statement.
The next great milestone and the hardest for folks to understand was that Price, the vertical axis of charts and what we call the 1st Degree and Time, the horizontal axis of charts and called the 2nd Degree of charts are the same thing, that is in the same way that markets run to and turn at the DC price numbers, they also run to and turn at those same ratios in time. For transparency I have written about the correct method of market timing in some detail and you can read and learn how to do this from my two "Master Class" articles first published by Financial Sense and available under the "Articles" tab at the Danielcode website. Once we understand how markets react to DC time cycles we can do quite a lot. We have a simple trading program called the T.03 signals which is a time based program and creates daily signals. A majority of these signals are profitable on our records and this program has been running continuously since 2008. This program has been optimized for defense not offence and it's an ideal starting point for people new to the Danielcode. It also proves to be the launching point for longer term trades.
John Gallwas: Why are these numbers "predictive" as opposed to technical systems that are "trend-following" systems?
John Needham: The Danielcode numbers are predictive as they take the key market matrix from any chart and apply the DC extensions and retracements according to Daniel's Law. Most don't understand the mathematics that flow from this Law and the others largely don't care, so a better response is to just ask you to peruse the charts in the Chart Archive and decide for yourself whether my claim is valid.
John Gallwas: What is the "4th Seal" program you currently provide to futures and commodity markets?
John Needham: Some years ago I wrote that the Danielcode numbers were being hailed as the most important and innovative discovery in this field for a generation. The 4th Seal has taken those numbers and time ratios and combined them into the most accurate forecasting tool that I have ever seen. The chart work and math that creates the 4th Seal is massive. I have been teaching this technique at Tutorials for 2 years. Few get it and fewer are prepared to do the work that it requires. We cover 15 Futures markets and each requires a number of charts and spreadsheets, so we do the work for you with our 4th Seal service which currently covers the German DAX, S&P, Gold, Crude Oil, Natural Gas, Copper, T Bonds and DX the US Dollar Index. The 4th Seal has literally forecast almost every important turn in these markets weeks and sometimes months in advance. Apart from the obvious benefits of knowing with a high degree of certainty when trends will begin and end, there is the added benefit of biasing the risk on your shorter term trades (1-7 days) in the direction of the 4th Seal signal. This has proven to be a great strategy and will turbo charge your equity curve.
As always, let me say that as an Attorney I figure that I have seen thousands of overblown statements of how good a product or service is, and realistically almost all are somewhere between downright disappointing to a bare faced lie. For this reason I expect you to have a healthy skepticism of all such claims and test the hypothesis for yourself. What is Gold to one is dross to another as we all are searching for another step in the traders' grail. For this reason we never encourage you to adopt any of the Danielcode offerings. Rather I prefer to say that you are all most welcome to visit us at the Danielcode website, create a free account and ask Terry at firstname.lastname@example.org for a free trial of any of our services. So try it for yourselves and you be the judge.
John Gallwas: Since the Chicago seminar in 2010, you have continually improved the Daniel Code services to traders worldwide. What can you tell us about your new short-term trading system named "FractZen 03/06"?
John Needham: Generally our emphasis is on 1-7 day trades John. And as you are well aware there are not enough of the 7 day trades. When markets are consolidating and we are using daily bars to trigger entry signals and measure the stops, it is often the case that every signal is directionally correct but the market doesn't move far enough to create profits. Additionally we are aware of the massive time and cost constraints of maintaining 4 charts for each market and analyzing each daily. This comes with the cost of software, live data and so on. The whole trading process including managing and moving stops can be arduous and for many folks it's just too cumbersome. We do have auto trading programs that do all of this for you but they still require monitoring and preparation and they are costly, and for the vast majority of our clients who are not professional traders, cost is a pressing issue.
FractZen approaches both of these issues in a unique way. It is a computer program that measures implied volatility and time and creates Buy and Sell signals in 8 Futures markets including all of the popular (and therefore liquid) markets. The program runs on our central server which is monitored for performance continuously and as the program creates Buy and Sell alerts they are transmitted to clients almost instantly by a text message to their cell phone or if they prefer by email. This version of FractZen creates one signal each day per market on average and can be used as a stand-alone trading program just taking each of the signals as they come, or as a short term program using the signals as directional indicators and entering and taking profits as you please or again as a filter for the DC daily trade signals. In quiet and choppy markets, which accounts for better than half of trading, we have observed that it outperforms the daily trade signals by a wide margin. Or you can ask your broker to execute these trades for you with a trailing stop.
Thank you for this opportunity to tell your clients something about what we do John. They will find over 90 of my published articles on financial markets at Danielcode Online and about the same number of trading webinars. All knowledge is useful. Unusual knowledge is even better and you will find plenty of that at the Danielcode.
This interview is for informational purposes only and is not intended to be
a solicitation of any kind. Trade only with risk capital. The risk of
trading can be substantial and each investor and/or trader must consider
whether trading systems are a suitable investment.
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