I have defined several times before the difference between the standard channel and the momental channel. The most important distinction between the two is the survivability of the latter over the former. In other words, momental lines, when projected in parallel, will remain capable to bracket price action throughout the entire life of the chart at any given timeframes, as opposed to a standard price channel, which defines a tethered price action over the limited lifespan of that price under channel control - Once it breaks out of that channel the standard price channel ceases to exist.
STATIC VS. DYNAMIC PRICE ACTION:
In this example, I have defined both a standard price channel as well as lines that I have derived from a proprietary method. Without having to reveal too much of this proprietary method, I can tell you that these lines are not dependent on the highs and lows of price action to define them - as in the case of a standard price channel - even if at the end they seem to be just the same. Instead, the momental line depends on subtle geometries derived not from the static nature of price, but on its movement. So, in other words, momental lines are derived from the dynamic action of price (momentum), thus drawn to represent not what price is now, but where it is likely to project next. If this sounds a bit too occult, feel free to Google "momental line + alcindor" or "momental line + 4xForecaster + 4xQuad" to pull some charts examples I have shared with the public in the past - They are also compiled here: Dead-On Hits bit.ly/16JMnH8.
PREDICTIVE/FORECASTING MODEL:
The predictive analysis and forecasting methodology I use is in stark contrast to the standard technical analysis I produce in the comments of these charts. I make sure to include a variety of standard patterns (e.g.: channel, trendlines, ... etc), as well as advanced patterns (Shark, Bats, Wolfe), so that I remain able to communicate with the curious trader and end up speaking the same language, so to speak. However, the predictive analyses, forecasts and targets are derived from non-price events, but overlying the two - and at times injection a fundamental context, especially if related to central bank action - I hope to convince the trader that such three-prong analysis will sway their interest - and perhaps their directional bias - in the direction that the model points. However, all the results are for educational purposes, and are not meant to act as financial advice or trading recommendations: Do your own due diligence.
In this particular case, I have outlined probable S/R levels using a combination of standard technical and predictive/forecasting applications. The case for a pull-back is strong, so I thought it worth posting.
The targets are color-coded to indicate their relative probability of ever getting hit. Green is high, yellow moderate, and red low - If and once red is ever hit, expect a significant pullback or reversal.
"AUDNZD: Significant momental line failure opens floor to forecast targets: Channel median next - via @TradingView "
Since the signal release, price attempted to dwell a bit higher, but it was pushed back towards the forecast targets below. Therefore, no change in the forecast, except a smug satisfaction to see the momental line give in underneath.
Next real obstacle will be the channel's own median, which is likely to prove thick per its historical account - Time will tell.
Cheers,
David Alcindor
raulmarcusbruno
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David ..Andrew's pitchfork is a powerful forward looking indicator that projects price into the future and does all that your momentum lines do.
4xForecaster
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@raulmarcusbruno - Yes, thank you Raul. I am very familiar with this and other comparable channeling methods. The one I use has a different approach and has carried over much longer periods of time. Something I have named momental lies and momental channel, using momentum changes rather than price points - David.
raulmarcusbruno
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Andrew's is the best channeling method by far but is not easy and is not just a channeling method and very few can master all of its facets but it would be nice to see more data on robustness of your technique
4xForecaster
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@raulmarcusbruno - I appreciate your suggestion Raul. Feel free to chime in anytime. In the mean time, please consider following my chart analysis, in which I often use this momental concept - David
"AUDNZD continues to decline as forcast; TG-1 remains intact - via @TradingView | AUDNZD #RBA #RBNZ #forex"
Despite a broad sweep that must have taken many nearby SLs, price has resumed its downward course as forecast. The aftermath of this wide vacillation in price did nothing to alter the predictive analysis and forecast. So, things are the way they were, as far as this particular chart.
Cheers,
David Alcindor
Pinkfloyd111.
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And how would you choose SL in this example, because this is uptrend channel and you are going counter trend. There is RSI divergence, but even then price can climb for quite some time.
4xForecaster
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Hello @Pinkfloyd111. - I do not advise on SL definition. Feel free to look at the 2-3 recent advices I have given on this subject. In this particular situation, the channel offers a visual guide. RSI divergence has no meaning (another subject I have written multiple times before, but so you know, the author of RSI himself will tell you that bearish divergences indicate UP-trends (yes, up, not down-trend, contrary to what institutional inculcating lessons may have told you - And this is direct advice from its author: Welles Wilder), and indeed, price can break above that channel, which again is the visual "line in the sand" - David
4xForecaster
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Clarification: "RSI divergence has no meaning" at least, not in the sense that you have been taught or that you may have read about - David
From Twitter:
"AUDNZD: Significant momental line failure opens floor to forecast targets: Channel median next -
Since the signal release, price attempted to dwell a bit higher, but it was pushed back towards the forecast targets below. Therefore, no change in the forecast, except a smug satisfaction to see the momental line give in underneath.
Next real obstacle will be the channel's own median, which is likely to prove thick per its historical account - Time will tell.
Cheers,
David Alcindor