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
Comments
LeeMBarrett
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I forgot to say thanks for posting your idea. Although the original course mentions the 0-3 CL very briefly I ending up with a headache trying to understand a poor quality chart and, dare I say it, poorly written description. I am also surprised that Tim Morge and Shane Blankenship at MarketGeometry does not seem to have elaborated further on this very important type of center-line. Your chart turned on the light so to speak so I appreciate that. I get a sense that the 0-3 CL is a rolling set of pivots meaning each individual pivot gets an opportunity to be P0, then P1, then P2, then P3. I also realised that the 0-3 CL is a great debugging and orientation tool for previous trades. I have found that I lost money because I had no idea that a reaction line was right in front of the trade entry that was destined to stop me out. LB
Timing_is_key
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@LeeMBarrett, Yes the original course is really of poor quality but still useful! most do give up. Tim Morge has adapted the method and teaches it through his site Market Geometry. I was lucky enough to get a hold of around 80% to 90% of Andrew's Original newsletters....what an eye opener indeed!! I reconstructed many of his trades which showed his entries/exits and most importantly the "Reasons For Action" That is why I say the 0-3 was one of his staple C/L's because it was unique! It not only. Pointed to the pivot it mapped the slope of the next move! Also a little tip not shown anywhere in the public domain about the 0-3 line. Use any time frame and find a clean zig/zag P0/P1/P2/P3 and instead of using the extreme points of P0 or P3 try using the Low Close or High Close ( or Vice Versa for a Bear C/L) Then for the "Action Point" Do The Same! Andrews stated that the true change a in sentiment occured at these points. You will notice the reactions will pivot quite regularly.
another good chart I published before the callapse of the EURO was predicted using the 0-3. See Below:
Thanks again for the comments, good to meet fellow Forkers!
LeeMBarrett
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It's interesting that the yellow 0-3 CL is quite clearly a median-line that got zoomed i.e. the hard-down to yellow P2. But what's also interesting is a reminder of Dr. Alan Andrews course rule ... "Frequently, after crossing a [median-line], prices continue to rise along the [median-line] before the further drop that was signaled by passing through". Dr. Alan Andrews does, however, make it clear that Center, Upper, and Lower median-line parallels are treated equally thus a lower median-line could also be the center line of a different median-line set.
The other thing that's interesting is that wide-range bars (hard-up/down) have the same properties as gaps i.e. they have two pivots to lean on in determining where the buyers and sellers are in the market and the reason why gaps tend to get filled (or wide-range bars retraced) is because price is simply retesting the median-line that was gapped/zoomed.
LeeMBarrett
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@LeeMBarrett, Sorry ...the course rule should read ... "Frequently, after crossing a MEDIAN-LINE (Lower, Upper or Center), prices continue to rise along the MEDIAN-LINE before the further drop that was signaled by passing through"
Timing_is_key
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@LeeMBarrett, Yes absolutely right a 0-3 forms part of a set of C/L's that Andrews used extensively in his trading ...The Pitchfork Being The Most Famous " Thus, Zoom retest proves true on all lines.... and in this case " Births a New Centreline " ( Yellow 0-3 ).........Although not shown here Andrews would anticipate the Retest Pivot by using at least 2 or sometimes 3 or more " Different 0-3 Centreline's " and the intersections of there Reaction Lines....as price met all of them simultaneously is where the probability was the highest of a Change In Trend.... Thanks for commenting
NQunlocked
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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!
NQunlocked
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sorry typo, correction line = Reaction line
Timing_is_key
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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
Timing_is_key
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Please note: If you move the chart to the right you can see where the action line intersects the LOW Pivot.
Sincerely,
TIK
Timing_is_key
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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!