The Late Roger Babson allegedly predicted the 1929 crash and hence made what was probably the trade of last century. It would be the equivalent of a billion dollar trade in today's market.
Dr Alan Andrews later took his mentor's concepts, which related to Newtonian physics and devised the Action-Reaction method of technical analysis; modelled on Newton's Third Law.
Babson was an interesting character- who merged business, science and esoterics. Like most visionaries he was treated sceptically in his own lifetime. Certainly his adventures in antigravity helped disguise his genius.
Other than the famous 'Babson Chart' there is little to go on as to how he did what he did in 1929.
But an acquaintance and I believe we have deduced the method.
Tradingview makes easier for contemporary traders to mechanise what was a laborious task in the 20th century. I present to you: the action-reaction chart
NOT TRADING ADVICE
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Here are action-reaction lines applied to a swing high/low and the pitchfork used in an alternate way just to give us a normal line and then standard deviation lines
Can you reccomend any literature for Action-Reaction method?
jasond1
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@MoogzX, I can. Use your own eyes. Pull out the fib channel on TV and set it to allow you to draw two points at the base of every mountain in price and one point at the top of the mountain peak. Or, two points at the top of every valley and one at the base of the valley. Try to keep the lines mostly horizontal - not steep like is shown here. You are wanting to use the lines for identifying movements in price, not time (although you can do that also), just know that you are looking for low risk, high reward, so if the distance between two lines is 1% of your account, and you want to see price move to the top or bottom of the current mountain or valley structure in price, you can measure you risk to reward from the bottom of the mountain or valley to the top. If you need more examples, check out #AlanAndrewsMedianLines on x.com (the old twitter). You will see how I have used them to describe many of ICT's trade examples. The fork is a subset of Babson's Action Reaction lines. By looking for the tiny mountains and valleys that grow up into big ones you will be able to see the measured moves in the market and how the algo is delivering a two sided market all the way from one point to another, often along the vector of a larger move defined by a fork's median lines.