Timing is key

Action Reaction Theory ( The 0-3 Line) GBPUSD 60

FX:GBPUSD   British Pound/U.S. Dollar
809 16 7
WITH THIS 0-3 LINE IDEA WE ARE NOT ONLY ANTICIPATING THE TURN AT YELLOW P3 BUT THE SLOPE OF THE NEXT MOVE!

This chart is an extension of the 0-3 Line IDEA presented on my linked chart below, the only difference is the shorter time frame. As I am writing this the market has exploded to the upside and I anticipate it will correct and follow the new anticipated slope ( See green upward dotted arrow)

NOTE: ACTION LINE'S & REACTION LINES ARE EQUIDISTANT TO THERE RESPECTIVE CENTER LINES.
NOTE 2: THE SMALLER DOWNWARD SLOPING PARALLELS WERE DRAWN FIRST AFTER THE WHITE P3 BOTTOM CONFIRMED.
NOTE 3: EACH ACTION LINE MUST PASS THROUGH A LOW PIVOT & A HIGH PIVOT.

If you focus your attention on the Yellow P3 & the spike bar that FIRST TOUCHED the Purple Downward Parallel.....& then began to turn. At this point we would draw our NEW Yellow P0-P3 Centre Line, Our yellow Action Line 1 & most importantly our yellow reaction line 1.

Observation 1: As the market plummeted from yellow P3 We anticipated the slope ( Market was falling faster ) and we had an area were the move was likely to end ( The over-run was actually expected due to the speed of the fall in relation to the anticipated slope )
Observation 2. We then experienced a bottoming formation ( We new at this stage the move was over ) before the next move up.
Observation 3. We now have a new anticipated slope ( See upward green arrow )

I hope you have enjoyed this IDEA!




Observation 1The market broke the bottom of that candle and was falling at a FASTER rate than the anticipated slope
HamzaLeith
2 years ago
If I understand this idea correctly: we can retrace back to the correction line and then head higher again towards the other reaction line above following the new slope? Thank you for sharing yet another great idea!
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HamzaLeith HamzaLeith
2 years ago
sorry typo, correction line = Reaction line
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Timing is key HamzaLeith
2 years ago
Hello Hamza,

PART 1: Establishes a probable turning area of a move & then the anticipated Slope of the reversal.

Your first step is to locate & draw in a good 0-3 line ( The first one above started at the Top )
Your second step is to move the parallel tool in tradingview "Backwards" to locate where both a TOP and a BOTTOM intersect ( can be a little out ). This is your ACTION LINE
You then CLONE the newly created parallel and move it forward until you line it up with the CENTRE LINE.
You now have the REACTION LINE......Just watch the market when it hits this line..... In the above example: the market went down as soon as the candle hit the line.......YOU then have the anticipated slope of the next move.

PART2. To locate an area where the new move is likely to END.......& obviously where the NEXT new move is likely to begin

RINSE & REPEAT PART 1. Starting with a NEW P0 which in the above example was the LOW following the previous P0 TOP!

I hope that I have clarified that for you, once you get a good Upward & Downward Combination your good to GO! I would advise to go back and TEST IT there are P0-P3 Lines Everywhere:)

PS: Please note, many times this method is very accurate down to the BAR however there are times when you get an overrun ( SEE above example end of the move) however you can use this to your advantage as the subsequent reversal MUST correct and the move is usually a BIG ONE in these situations



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Timing is key Timing is key
2 years ago
Please note: If you move the chart to the right you can see where the action line intersects the LOW Pivot.

Sincerely,

TIK
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Timing is key Timing is key
2 years ago
Just like to add an interesting side note that I forgot to mention.

The intersection of the 2 REACTION Lines may not always TOUCH the BAR that turns the market ( wouldn't we all love this to happen )........BUT do not underestimate how powerful IT'S Location CAN BE:) I'll let the chart speak for itself!

snapshot
+1 Reply
HamzaLeith Timing is key
2 years ago
Thank you for the clear explanation in addition to earlier idea i am going to study both thoroughly, Let us hope TV puts this idea on top and enlarge coz I really think this very powerful, and you could even make it more powerful by adding other techniques to it (like elliot wave for instance), great job!
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Timing is key HamzaLeith
2 years ago
Thank you Hamza,

It takes some time to get your head around it, but well worth the effort. Elliot Wave, when interpreted correctly, is very powerful it is very similar to Andrews 5 Pivots & the ABC corrective wave and was acknowledged in his Action Reaction Course but there are some noticeable differences. The above is a great road-map of where the beginning & end of a move is likely to be, this allows me to zoom in when a Turn is near & then when my entry is activated to then widen my stop so I can stay in a BIG move longer. I use different methods for Entry,Exits & Stops but good money management is at it's core ie I aim for only Good Risk/Reward of at least 2:1 with a 1:1 cover. I get caught some times but I always aim for low risk.

Sincerely,

TIK
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HamzaLeith Timing is key
2 years ago
Exactly Timing is key, one could use your approach to define the ""boundries"" of the market and take decisions regarding his/her trades on a simple count of elliot waves That is why I think this approach is so powerful. I have been combining simple pitchforks with elliot waves with good results with the same idea. But your method is even powerful because these lines are really great boundaries!!!. You sir sure know what you are doing!. Hope we can keep in touch and exchange ideas! Have a nice day!. Sincerely, Hamza
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Timing is key HamzaLeith
2 years ago
Yes, The whole idea is to set some boundaries for price action to operate within, that's why Pitchforks/Parallels and Action/Reaction Lines are so powerful, together with some basic rules of engagement you can predict many reversals as price interacts with them. Your use of Elliot with the forks is unique and although I don't use indicators I have seen them used ingeniously by some very clever traders, the lesson I learn't here whether it be RSI, MACD, MA's etc is to NOT accept the standard default or "Mainstream" settings and/or methodologies, Did you know you can also use the forks on an RSI or MA Line.....Try It and see what you get when you hit the ML! also instead of using settings like 10 or 14 etc, play around with the Fibonacci Sequence 5,8,13,21 etc each market will resonate with 1 or 2 of these and all of a sudden your indicators are confirming many more good reversals. As you already know there is always a "Tell" before any Good reversal it just takes practice "Interpreting" what you see BEFORE it happens:)

Sincerely,

TIK
+1 Reply
HamzaLeith Timing is key
2 years ago
I never tried what you are suggesting, with RSI for instance, It seems so obvious yet is absolutely no common practice, I might try it out, thanks!. If it works out I will incorporate it in a future idea. The credits go to you!. Sincerely Hamza
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HamzaLeith Timing is key
2 years ago
I agree with you that there is no holy grail indicator in forex trading. They are all holy!, successful trading is the result of a smart application of them.
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Timing is key HamzaLeith
2 years ago
Following the new slope:) & bouncing between the lower and 50% parallel to the tick! I love this stuff.
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HamzaLeith Timing is key
2 years ago
it is working perfectly!!, how do you make projections from now? as to where price might go?
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Timing is key HamzaLeith
2 years ago
Find the next 0-3 Line(s) ofcourse.

Those 4 Green Parallel Lines are just magic, if you can follow it....The Action Line intersects the High & Low Pivots in the Orange Circles, the next line is your 0-3 Centre Line ( See Red Boxed P0 & P3 ), The next line is your first Reaction Line (R1), See how it followed the slope!, The Last Line is a Second Reaction Line because Allan Andrews stated that you can use a Reaction Line ( R1) as your NEW Centre Line which picked up the Extreme Low almost to the TICK!....The next big line to watch is that BIG downward sloping Reaction Line lets see the what happens when the market hits that.

Sincerely,

TIK

https://www.tradingview.com/e/yfKIiegX/
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Timing is key Timing is key
2 years ago
snapshot
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Timing is key Timing is key
2 years ago
Forgot to add when you see these intersections on the reaction line.....Take Notice just added confirmation
snapshot
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