The yellow Centerline will be tested. From here a natural turn is highly possible.
Additionally there is also a Pivot-Support that helps the CL holding up price.
PT's are most of the time at the Centerline becacuse there is a 80% chance price hitting it.
One can also trail the stop up, then hop that price will go to the Upper-Medianline-Parallel (U-MLH).
Wow! I'm impressed, not joking!
You ask the two most important questions.
It seldom happens that people really ask these two questions, so which I'm very happy to answer:
First of all, A,B and C points have nothing to do with A/B/C swings or legs.
It's just for marking, like numbering. Just you don't confuse the two conzepts.
OK, let's rock:
To find working swings for the A/B/C Point, you have to understand the following rule:
#1: In an uptrend: A swing low is confirmed, if the swing high is broken.
- why do we want to find and confirm the swing low? Because we
a) need it as an anchor point for A/B/C points of the Pitchfork or
b) to hide our stops behind them, since these real swings are real accumulation/Distribution areas. That's why they are built
#1: In a downtrend: A swing high is confirmed, if the swing low is broken.
...same as above just vice versa.
So what we do here is, identifying the REAL swings in the markets and letting the Noise out.
Noise is, when price is swinging (often in smaller swings = Pivots) within a real swing (identified by the rule I gave you).
Now, you often have several swings that, if you anchor the fork A/B/C's to it, will "work", and the Pitchfork and price combination looks good.
And here comes the part of "Non-Perfection" of the Forks.
Because if you not choose the very last real swing (on which the whole Fork-Method is based up-on), then it's a little bit of try & error to find a good working swing.
But most often they don't differentiate very much, because the Super-Trend (overall Trend on higher timeframes) is in the same direction.
So maybe you change the angle a couple degrees when choosing another swing, but overall it should not change the whole picture completely.
Identifying the "correct" swing highs & lows, or pivots high & lows (Pivots means smaller TF), is the most important part that every trader should master first, before even touching any chart-tools or indicators, period!
If you want to know more, just go to my website, attend for the Free ForkTrading BLUEPRINT and some of your lightbulbs will shine brightly after the course ;-)
And if you think it could help improve your trading, then just signup for one of the Memberships.
I hope this helps and have a successful new week.
The easiest way to through pressure away from trading is, to trade with a fraction of your capital that never bothers you to get stopped out.
But what's your analysis on CL?
Would you like to share your chart?