That's the mathematical part. Now for the more philsophical part.
We are all familiar with charting and how various candles depending on position can reliably indicate certain things, aiming for a profitable direction to trade. Essentially the upper and lower wick represent the force up and the force down. These type of opposing forces occur all across nature and all complex systems and their patterns derive from combination of the two and the necessity towards equilibrium, the balance. The two opposing forces and the play between them give rise to waves (up and down) and forms (expansion and contraction) of all kind. (We as humans use this to walk, we push and we fall, push and fall - a very handy use of gravity ).
There is another more ancient Eastern system of notation which uses the Upper, Middle and Lower, the I-Ching, though the Upper, Middle and Lower occurs across many mythologies and philosophies.
Hopefully you can see the essential similarities and conjunction, and the application as is useful to traders. I'm using the EURUSD because it is easy to demonstrate as it is a young currency pair. For the sake of easy reference I have put names to each as follows:
THE RAISE (The Upward Force)
THE PRIME CARRIER (The Equilibrium)
THE INHIBITION (The Force Downward)
The Prime Carrier is the long term waveform or channel. It doesn't readily change and probably lasts for well over a year if not longer (I've done a long term channel for the USDJPY - see previous chart - THE SIMPLE VIEW). It will delineate itself from time to time perfectly and taking cloned parallel lines you can check its existence or validity by noting that peaks or low points run along it. We are simply joining the dots, that is all charts do really, and by doing so seek patterns to predict the behaviour of the moving dot, and thereby profit.
The other two forces change behaviour more rapidly. They are ALWAYS there and it is merely a matter of finding what it a suitable working representation. This is what I have hopefully done here. I find it best to look at charts from a really good distance away, then look more closely to establish validity, confirmations and so on to entry and exits. I would encourage any one to do the same. Establishing the Raise and the Inhibition using forks ... well, try it, usually Alan Andrews method is good enough, take a recent rise or fall of significance and use the previous , usually the obvious one, though not always, as point A and the top and bottom of the rise or fall as B & C. My aim is to establish something long term enough for it to be useful quite some time beyond the 0.5 retracement.
In this chart I hope it's obvious which is my Raise and Inhibition. In the next chart I want to look more closely. Most of us don't trade or hold positions for near-decades and even if we did we would still require a rationale and a precise entry.
Thank you for reading. I'm off for lunch.