So, here comes a little lessen, that could have a huge impact on your Trading.
Many of you know that in my arsenal of tools I use the Medianline/Pitchfork tool very often. It's my best tool to project the path of price, find extremes and centers in the markets.
One day, I was stepping back in the world of Action/Reaction and started to research on the wisdom of Dr. Allan Andrews and Babson. I modified their Action/Reaction model in a new way.
Here's what I have found so far:
1. Identify the correct "last" Pivot (Anker 1). 2. Identify the last Low (Anker 3). 3. Wait, until Anker Pivot 1 is broken, and the market did a pullback (Anker Pivot 2).
If you're at point 3., this means that price already shoot up again above the Anker Pivot 1, and preferable even higher as the last Pivot above Anker Pivot 1.
From now on, you can observe, how price is behaving at the Reaction lines (Yellow R's).
How to trade it, use it? Well, that's upon yourself.
Or, you may wait for a course I'm maybe planning. But I highly recommend you study it and make your hands dirty §8-)
Happy Trading
Comment
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At the (blue) resistance, price got rejected like expected §8-)
Beautiful example of a hybrid 0-3 Andrews A/R Centre Line. ( If you substitute Anker 1 with 0 same same 4 pivots in total ) From my research he used this line extensively in his trades & documented it in his newsletters supporting his entries and exits locations...Notice how long the reaction lines keep working...( On occasion you will notice the market exceed a reaction line to a small degree.All this means is that there is a (temporary) change in frequency for that move, to capture it I use a sliding parallel at the same slope of the reaction lines underpinning structure of this move ( the market later respects the sliding parallel ). Also notice that the market reverts back to original reaction lines on the other side touch and continuation. Just my observations. Cheers
Tr8dingN3rd
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@inflectionpointtrader, Great to hear from you! What a nice add-on with the sliding parallel. Thanks for that. Still, after so many years, I can learn something new from others. That's the power of a great community working together. It's also amusing how "Many Ways Lead To Rome" §8-) Have a great new week.
inflectionpointtrader
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@Tr8dingN3rd, Yes, I picked that one up ( and a few other nice tools ) on my journey to understanding frequency and the forks...Talk soon :) PS: Notice the overshoot ( Distance ) on the 50% fork frequency is duplicated later on the lower parallel precisely!! ie. Frequency expansion and validation. Cheers
Thanks for your analysis. At the risk of sounding like a troll...your blue resistance area has a range of 4631 to 4586. If you take that range and put it just about anywhere there will likely be a "got rejected at that price area" moment in the 4 hr to daily charts just by random chance. In any bull rally/market these happen...but market keeps melting up. I like to see a nice 1-2-3 pattern down at these levels to be a true indication of price being at least temporarily "rejected". Just my two cents.
Tr8dingN3rd
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Hey @bluespark96, no, you don't sound like a Troll §8-) Thanks for your input. Yes, I agree, a Re-Test or kinda confirmation is always better. Even at the cost of potentially missing out, or make less money. Good input, thanks.
BahamasX
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Good luck in your research.
Najhae
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Interesting. What is the tool used other than the pitchfork?