DislikedHi guys and thanks all for sharing,
It sure isnīt easy, I drew one a few days ago (Green PF) and price has moved outside of it and donīt thinks itīs coming back in - price has past to far away. If I would have taken the long trade at 1.6292 I would have lost.
I now have enlarge the PF (Orange PF) so that price is inside and above the lower ML. Is this one still valid or should I draw a new one pointing down - thereīs a quite big retracement there and price has past the 200 MA?
Greatful for all your inputs
Have a great trading day...Ignored
Price had obviously changed behavior. Price was making higher highs and higher lows, crusing in a nice up trend. Then it flattened out and made a nice top, then it changed direction and behavior--and YOU have to recognize that and draw in the down sloping Median Line or pitchfork, which I think Surya did a few posts later.
Pitchforks get a bad reputation because people treat them like the lagging 200 moving average indicator hanging out on their chart: You don't have to redraw the 200 period moving average, it just squiggles over a bit. You HAVE to pay attention to price and draw a new fork in when price changes behavior. Lazy traders cannot use leading indicators because they don't see the change in the market structure and they then don't draw in the new pitchfork.
Price isn't going to be nice and 'DO' what you want at lower lines. If you have an up sloping pitchfork and price makes a clear turn lower and is heading for the lower Parallel, you can't just hold onto your position, thinking...the Lower Parallel is there, it will save me. Or god forbid, you can't just throw in a bid at the lower paralllel because the up sloping line is there. The lines have to fit market structure.
It isn't hard, but you have to pay attention and learn market structure. Then when the structure changes you have to add a new pitchfork. It really isn't rocket science.
Tim