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Defining PhiCube

What is PhiCube?

Defining PhiCube

For a good trader, it's not a secret. Humans are programmed to walk 5 steps forward and 3 steps back. This is part of our basic behavior, and is clearly visible throughout history.

The financial market is a living, collective representation of human expectations. Consequently, one of the best tools to observe our collective behavior is a financial chart. It makes sense that 5 steps forward and 3 steps back, as a basic human behavior, should be clearly visible in financial charts. This is indeed the case.

In financial charts, price, time, risk, return on investment, fear, and greed are revealed in the form of beautiful geometric patterns. There are dozens of patterns, but the 5-3 stands out as the most common and efficient.

All chart patterns are governed by a derivative of the number Phi, the Golden Mean. Phi, also known as "Divine Proportion", is present throughout Nature and the Universe. We see it everywhere, from the geometry of DNA to the shape of the Milky Way.

Phi is a totally irrational number. Nature uses it to simultaneously govern the natural processes of "additive growth" and "fractal packing". These processes provide the necessary conditions to support life as we know it. Without them, life would probably be cold, mechanical, or square.

So, what is Phi numerically? Actually, it has two versions: Phi (with a capital P) and phi (with a small p). Each is the inverse of the other: 1 / Phi = phi. 1 / phi = Phi.

The value of Phi (rounded) is 1.618.
The value of phi (rounded) is 0.618.

Okay, I started this topic with 5 steps forward and 3 steps back. What does Phi have to do with that?

5 / 3 = 1.6 (approximately Phi)

3 / 5 = 0.6 (approximately phi)

Thus, we see the correlation between 5-3 and Phi.

Phi is the basis of life.

5 / 3 is the most simple relationship that approximates Phi.

Several derivatives of Phi are visible in Nature and in the financial market. Phi squared (1.618 x 1.618 = 2.618) is quite visible. Phi cubed (1.618 x 1.618 x 1.618 = 4.236) is less obvious, but much more important.

The most important number in the financial markets is Phi cubed = 4.236.

I removed the last letter "d" of the phrase "Phi cubed" to create the commercial name "PhiCube".

You've never heard of PhiCube? That normal. It's not emphasized in conventional technical analysis. So my claim that PhiCube is the most important number in financial analysis is normally met with great criticism.

Why PhiCube is the most important number?

Financial markets are fractal in nature. Several 5-3 patterns of different sizes exist together simultaneously, with the smaller ones fitting inside the larger ones. These patterns represent the expectations and behaviors of all market participants.

When we analyze all 5-3 patterns relative to each other, we find that they are all separated mathematically by PhiCube!

All 5-3 fractal patterns are separated by PhiCube.

With PhiCube methodology, it is possible to measure the expectations of all market participants. In the charts, technical conditions such as trends, consolidations, risk, reward, and statistical probability are clearly defined in quantitative terms, without ambiguity. Thus, we can find and trade the most favorable conditions and avoid the dangerous ones altogether.

PhiCube is the common denominator in all technical price indicators.

When any conventional charting indicator is configured with PhiCube parameters, it will give the same trade signal as all other indicators!

There are immediate benefits to the PhiCube approach. Mainly, technical analysis becomes much simpler, more robust, and easy to follow. This allows the trader and investor to focus on what really matters: psychology and risk/capital management.

Come learn how to apply PhiCube in your charting. You will learn to truly "see the market" in a totally new and powerful way!