Investor/RT - The Owl

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	The Owl is a monthly newsletter published by Dr. Russell A. Lockhart for subscribers to The Manual Project. Linn Software has taken some of the methodologies described in The Owl and encapsulated them in a technical indicator. To date, The Owl indicator is heavily based on discussions of the April 2001 Edition of The Owl newsletter Dr. Lockhart can be found during market hours commenting on and making use of The Owl methodologies at... www.undergroundtrader.com. It is recommended that you download the latest version of Investor/RT before using this indicator. The following links will help you with the understand and operation of The Owl... - Technical Indicator Adjustment Tutorial Using The Owl in Investor/RT... - Adding The Owl to a chart... - Adjusting the Position of The Owl... - Adjusting the Preferences of The Owl... - Maintaining a 1x1 (45°) state for the Base Rectangle... - Adjusting the Position of the Floating Arcs... - Creating Space on the Right Side of The Owl Chart...
	Adding The Owl to a chart...
	Below is a 1-minute chart of the S&P September 2001 contract, with The Owl indicator added to it, using the preferences seen just below.

Preferences
	The Owl was built on top of the rectangle tool that pre-existed in Investor/RT. This base rectangle dictates how the remaining options of The Owl are drawn. On a 1-minute chart, it is recommended that you draw the rectangle around the first 30 bars of the day. To draw the base rectangle, click on the "Rectangle / The Owl" button in the chart toolbar (the cursor will change into a pencil), and then simply drag your rectangle around the bars you wish to include in the base rectangle. This is done by clicking on a position in the chart and holding the mouse down while dragging the cursor to create the rectangle. Now you may want to adjust your rectangle position. We will discuss this in the next section.
	Adjusting the Position of The Owl...
	In a 1-minute chart, Dr. Lockhart recommends that you wrap your rectangle around the first 30 minute bars of the current trading day. Of course this can only be done after the first 30 minutes have transpired. You may, however, add your rectangle before the first 30 minutes and adjust it as time moves on. There are several ways to adjust the position of your rectangle. This adjustment only refers to horizontal adjustment of the rectangle, as the vertical height of the rectangle is dictated by the high and low of the period it contains. One way to adjust the rectangle position is with the keyboard. First, select the base rectangle by clicking somewhere on it. Now, the following keyboard combinations have these results...
	Keyboard Stoke	Resulting Action
	Right Arrow	Moves both the right and left sides of the rectangle to the right one bar.
	Left Arrow	Moves both the right and left sides of the rectangle to the left one bar.
	Shift - Right Arrow	Moves the left side of the rectangle to the right one bar.
	Shift - Left Arrow	Moves the left side of the rectangle to the left one bar.
	Ctrl - Right Arrow	Moves the right side of the rectangle to the right one bar.
	Ctrl - Left Arrow	Moves the right side of the rectangle to the left one bar.
	Another way to adjust the position of The Owl is by adjusting the Start and End Date/Time control in the preferences window. The Start Date/Time represents the date and time of the left side of the base rectangle. The rectangle side will be drawn just to the left of the bar this date/time represents. Similarly, the right side of the rectangle will be drawn just to the right of the bar the end date/time represents. In our chart above, the first bar of the day is represented with the time 9:31 and the last bar of our 30 minute rectangle is represented with the time 10:00. A bars "time" is actually the time that the bar ends, or is completed.
	Adjusting the Preferences of The Owl...
	Your rectangle may not yet have The Owl appearance. This is accomplished in the preferences of the rectangle. First, select the base rectangle by clicking somewhere on it, and then hit the "Enter" key on your keyboard. A preference window similar to the one that was shown above should appear. Once you check "The Owl" checkbox, you will have several additional options available to you. Let's discuss each preference individually. For additional information on these options, you may want to refer to the April 2001 edition of The Owl. Base Rectangle This allows you to adjust the color, line thickness, and line type of base rectangle. Clicking on the colored square will bring up the Investor/RT color picker. You can control-click on this colored square to get the native OS color selector. Price/Time Grids The Price/Time Grids are grids built by replicating the base rectangle both horizontally and vertically throughout the chart. The checkbox to the left allows you to turn this option on and off. You may also adjust the line color, thickness, and style. Diagonals Diagonals connect the intersections of the Price/Time Grids. The checkbox to the left allows you to turn this option on and off. You may also adjust the line color, thickness, and style. Arcs Three Arcs are drawn. The first Arc is drawn around the base rectangle using the length of the rectangles diagonal as the radius. The other two Arcs also this same radius. One Arc is attached to the high price. The other Arc is attached to a low price. We will discuss below the method for moving the high and low Arcs. The checkbox to the left allows you to turn Arcs on and off. You may also adjust the line color, thickness, and style. Auto Arcs If you check the Auto Arc checkbox, Investor/RT will try to find a significant high and low for you, and automatically draw the Arcs from this position. These Arcs will may be adjusted automatically throughout the day as new highs and lows are formed. Diagonal Grids Diagonal Grids form squares grids throughout the chart using the Arc radius (or base rectangle diagonal length) as the length of it's sides. The checkbox to the left allows you to turn Diagonal Grids on and off. You may also adjust the line color, thickness, and style. Gann The Gann option draws the following Gann Angles: 1x1, 1x2, 1x4, 1x8, 1x16. The angles are drawn downward starting at the upper left corner of the base rectangle, and upward starting at the lower left corner of the base rectangle. The checkbox to the left allows you to turn Gann Angles on and off. You may also adjust the line color, thickness, and style. Once you have your preferences setup like you wish, with some reasonable colors, line widths, line types, etc., it is highly recommended that you click the Make Default button below the preferences window. This will ensure that you will retain these same settings the next time you use the Rectangle/Owl button on the charting toolbar to draw a rectangle in a chart.
	Maintaining a 1x1 (45°) state for the Base Rectangle...
	Note in the chart above, the text on top of the Rectangle reads: 30x6.80 (45.0°) This indicates 30 bars x $6.80, forming an angle of 45.0 degrees. This is a measure of the actual angle of the diagonal, which you are ideally trying to lock in at 45° (1x1). Now, there are a few things inherent in the Investor/RT charting system that may adjust your angle as the day proceeds...as you may have already noticed. These include... - adjusting the pixels per bar (width of each bar) in the chart preferences... - adjusting the chart (or chart window pane) size vertically - adjusting the vertical scale settings - scrolling back or forth horizontally in the chart (with auto-scaling turned on) - new bars entering into the right side of the chart while old bars leave the left side, causing new highs/lows. So what is the best way to lock your 30 bar square into a 1x1 (45°) square shape? Here are some suggestions... After the first 30 minutes have passed, and you are able to draw your square around the first 30 1-minute bars of the day, double-click in the vertical scale to bring up the vertical scale preferences, and check "Manual Scaling" and select a reasonable range that you think should take you through the day. (like 1450 to 1480. for example). Later in the day, you can adjust this range, but should always keep the same spread between the high and low. This will insure that scrolling motions and new bars coming into chart won't affect our square shape. Now, we need to make other adjustments to get our square as close to possible to 45°. First, adjust the pixels per bar (you can do this by clicking in blank space on the chart and then using the up and down arrows on your keyboard, or bring up the chart preferences and adjusting there), until you have something somewhat close to 45° along with a reasonable bar size. Now, you can adjust the chart height vertically to fine tune the degrees. Once you have it fine tuned, just sit back and watch as the owl monitor the day. If, later in the day, you need to scroll the entire chart upwards or downwards to adjust for new price action, you can do so easily while maintaining your 1x1 base rectangle. Simple drag in the right half of the vertical scale, up or down. Dragging upwards will case the entire chart to move upwards. Dragging downward will cause the entire chart to move downwards. If you drag in the left half of the vertical scale, this stretches and contracts the scale vertically, and will effect the angle of your base rectangle diagonal. So be careful to drag in the right half of the scale. When you mouse down in the left half of the scale, you should see the cursor change to a hand. When you mouse down in the right half of the scale, you should see the cursor change to a scroll marker (two horizontal lines with arrows protruding up and down).
	Adjusting the Position of the Floating Arcs...
	If you would like to manually move your floating arcs, you can do so with your keyboard. First, select The Owl by clicking somewhere on the base rectangle. Now, the following keyboard combinations will have these results...
	Keyboard Stoke	Resulting Action
	Up Arrow	Moves both the high and low Arcs to the right one bar.
	Down Arrow	Moves both the high and low Arcs to the left one bar.
	Shift - Up Arrow	Moves the high arc to the right one bar.
	Shift - Down Arrow	Moves the high arc to the left one bar.
	Ctrl - Up Arrow	Moves the low arc to the right one bar.
	Ctrl - Down Arrow	Moves the low arc to the left one bar.
	Creating Space on the Right Side of The Owl Chart...
	The Owl indicator often requires looking into the future to see where the Gann Angles, Arcs, Gridlines, and Diagonals, project the price/time action. Investor/RT (4.9.5 and later) allows the user to specify a "Look Ahead" period. This Look Ahead period specifies the number of bars into the future that the chart will reflect. It will create in essence a margin to the right of the most current bar, between the bar and the vertical scale. In order to adjust this Look Ahead period, first bring up your chart preferences. You can do this by either double-clicking in the horizontal scale, clicking on the chart preferences button in the charting toolbar, or right-clicking in the chart (cmd-click on Mac) and choose "Preferences: Chart". In the Viewing Period section of the chart preferences window, you should choose either "Begin to End" or "Last X Days". When either of these are chosen, a "Look Ahead ___ Bars" option will appear. A common suggestion here would be 20 bars, but this will vary depending on other characteristics of your particular chart. There is also a shortcut to adjusting the Look Ahead period. Just shift-drag in the horizontal scale along the bottom of the chart. Shift-dragging to the left increases the Look Ahead period as you drag in new white space, while shift-dragging to the right removes space by decreasing the Look Ahead period.