The Draft Marks — Stockhelm Galley

The Draft Marks measure how deep the hull sits in the water. In trading, the LSS envelopes measure how deep price sits within its support and resistance zones. Drop the lead line into today's price action and it returns four measurements:

Buy Envelope: A support zone averaged from four levels
Sell Envelope: A resistance zone averaged from four levels
Trend Momentum Indicator (TMI): Close today minus Close 2 days ago — tells you if the cycle is intact
Overbought or Oversold: A 0-100 reading forecasting next-day bias

Concept first: The LSS system is a mechanical day-trading method that does not require interpretation during market hours. For the conceptual framework behind these calculations, see The Book Trader's Log. For Raschke's concept-based alternative, see The Lookout's Post.

LSS Calculator

Input Today's Session

High (H)

Low (L)

Open (O)

Close (C)

Prev Day High

Prev Day Low

Prev Day Close

Close 2 Days Ago

Avg D Column

Avg R Column

Avg BU Column

Avg BH Column

Buy Number

—

Support zone

Sell Number

—

Resistance zone

Anticipated Range

—

Sell − Buy

TMI

—

Trend direction

OB/OS %

—

Neutral

Level 2 Entry

—

61.8% retracement

The Formulas

Buy Envelope (Support Zone)

Component	Formula
1. Previous day's low	`Prev Low`
2. Trend reaction buy	`2 × ((H+L+C)/3) − H`
3. Prev high − avg D	`Prev High − Avg D`
4. Prev low − avg BU	`Prev Low − Avg BU`

Buy Number = Average of the 4 components above

Sell Envelope (Resistance Zone)

Component	Formula
1. Previous day's high	`Prev High`
2. Trend reaction sell	`2 × ((H+L+C)/3) − L`
3. Prev low + avg R	`Prev Low + Avg R`
4. Prev high + avg BH	`Prev High + Avg BH`

Sell Number = Average of the 4 components above

Anticipated Range = Sell Number − Buy Number

Trend Momentum Indicator (TMI)

TMI = Close today − Close 2 days ago

Reading	Condition	Action
More positive than previous 2	UP	Cycle intact
Between previous 2	SIDEWAYS	Watch for change
More negative than previous 2	DOWN	Rephase cycle

Overbought or Oversold Indicator

((H − O) + (C − L)) / (2 × (H − L)) × 100 = %

Reading	Action
≥ 70%	Overbought → sell next day
≤ 30%	Oversold → buy next day
30-70%	Neutral → wait for 1st hour range violation, then fade

Level 2 Entry — 61.8% Retracement

After the first hour, when intraday range is established:

Intraday Range × 0.618 + Intraday Low = Buy entry
Intraday High − (Intraday Range × 0.618) = Sell entry

Worked Example

Input: H=4500.00, L=4485.00, O=4495.00, C=4492.50
Prev: H=4498.00, L=4480.00, C=4490.00
Close 2 days ago: 4485.00
Averages: D=8.50, R=7.20, BU=1.80, BH=2.40

Calculations:

Trend reaction buy = 2 × ((4500+4485+4492.5)/3) − 4500 = 4485.00
Buy components: 4480.00, 4485.00, 4489.50, 4478.20 → Buy Number = 4483.18
Trend reaction sell = 2 × 4492.5 − 4485 = 4500.00
Sell components: 4498.00, 4500.00, 4487.20, 4500.40 → Sell Number = 4496.40
Anticipated Range = 13.22
TMI = +7.50 (UP)
OB/OS = 41.7% (Neutral)

Key LSS Rules

Profit Target: Double the anticipated range (not single)
Exit if missed: Market-on-close (MOC)
Win Rate: ~50%, but average profit >> average loss
Short Side: ~70% of all winners come from short selling
Shape Ratio: 3.89 (excellent; >2.0 considered good)

Related Guides

The Book Trader's Log

The original 3-day cycle concept that LSS modernizes.

Intermediate

The Lookout's Post

Raschke's concept-based adaptation versus Angell's mechanical system.

Intermediate

Episode 25 — The Operator's Ledger

The story of George Taylor, the mechanical 3-day rhythm, and the discipline that separates survivors from casualties.

Sea Shanty