(binned per thread starter's request) May The Fork Be With You!

1 minute. LOL. This time frame has been a great teacher for me. It fits my need to get in and out of a trade quick as I trade mostly in the early morning hours just before the US markets open and up to about 9am MST. After that I find the bolatility tends to dry up.

I need to post more but time is precious. I would like to find traders to share more with but such traders would have to have the following characteristics:

1. Trade very low time frames say no higher than 5 mins
2. Understand and use real price action as taught by Shane.
3. Zero use of indicators
4. Have a better than rudimentary understanding of median lines.

I trade EUR, GBP, AUD and JPY /USD pairs. I intend to trade more futures especially the dow and mini s and p in the near future as the PA during my favorite trading hours is most active. I just want to make sure That I fully understand the trading paradigm that I’ve finally settled on and also that I’m ready to trade without fear.

We will never stop being taught by the markets. I am still constantly asking questions about things. Generally they aren't what you see on the blog pages because Shane gets us going in a much different way.

I just got done with a 20 trade experiment on the 3rd and 4 pivot zone on a 20 minute time frame. It worked out very well, lots of good trades both continue and reverse and many observations from it. I'm now working on another 20 trade test of the largest bar of the day on the 20 min time frame.

A, B, C represent pivots of an ascending pitchfork.
A to B happened with very definable swings.
B to C took out the smaller swings.
At C price ran into buyers where it stalled and coiled or contracted.
Near the bottom of C price made some minor swings of which the red trend line shows.
Price broke above the red trend line with Gap 2. I entered on a retest of the gap. My entry was based on the fact that buyers were before and the price action of the gap in this buyers area was convincing to me for the entry.
Target was Gap 2. Price does not like to leave gaps unfilled and these can be taken advantage of in the correct context such as this.

Filled the gap

Feeling a little ambitious. Doing a little exercise recommended by my mentor and will post it here. These are what looks like the best and easiest trades on the EURUSD for the month of April. A few things to note:

1. Double black horizontal lines represent about the top 1/4 of a gap bar. Some bars are wrb and some are not. Gaps represent effort.
2. Double green horizontal lines "catch" tails (pinbars) in certain situations. Tails represent effort one way then the other.
3. R:R. I try for 3:1 trades as a minimum.
4. Some charts will use Median Lines and some will not.


The green vertical line is market open.
To the left is a coil that gaps down and defines controlling sellers.
At market open price is trapped between sellers and buyers. It gaps above the sellers and runs into controlling sellers.
This is an example of where a touch trade could occur with a good SL.
The target shown below is a little more than 3:1.
An alternative confirmatory trade occurred after price gapped down from the controlling sellers taking out the prior gap, then through sellers in the opening range and bouncing off buyers in the opening range and returning to the origin of the gap down. This trade cold have been a 3:1 if using the same SL as trade 1 but if a tighter SL is used then the 3:1 would not have been possible.

Large view

Zoom in for detail

April Trade 2
In the previous trade price gapped down strongly to target.
Gaps are often filled and often provide trading opportunities.
In this case the price action did not provide an opportunity.
Trade 2 occurred as shown as price tested the sellers. These sellers were strong as they revealed themselves earlier in a gap swap pattern (trade1).
This trade could have been a touch trade or confirmatory as the tail (bull effort) was taken out and price reentered the same area.
The SL was excellent. Sometimes a naturally occurring reassuring SL is enough to justify the trade.
Target shown and was created by using the bottom parallel of a modified Schiff.

Overall view. Shows how price has been selling overall. This fact is important.


Zoomed in view

April Trade 3
I re-analyze charts by frequently erasing everything on the chart and starting over. Doing this gives you a fresh view and helps you see things you didn't before.

In this case price begins to show clear evidence of LHs and LLs. It's swinging. Swings are one of the most fundamental elements of price action and understanding them is one crucial key to successful trading.

The fork is a modified Schiff drawn after pivot C.
The light pink box highlights a wash and rinse structure.
1 is where they made a decision to sell and took price down to a lower low. In this scenario this decision point becomes a place to sell if price comes back.
Sell limit orders are entered and SL and target as shown. The red (SL)green(target) strip to the left shows 3:1.
3:1 is minimum. The target is based on price making a new low.

I like what you're doing Winston keep up the good work...had a guy tell me once you put enough lines on the chart you're bound to see something, bit of a critic he was, but I've found you keep drawing and you'll find the frequency eventually it usually stands out when you do.

Are you still doing Shane's class or did you step into a one on one with Shane or Tim?

Thanks! Hope to see you posting more.

Still in Shane's class.

April
No Trade 1
Price makes a new low but the lowest low just pokes a bit lower.
A set of buyers is established and a set of sellers.
The previous down fork is breached to the upside taking out the last confirmed swing down and the first warning line of the down fork.
Just before price breaks above the sellers a "tail" is formed.
Price takes out the tail and the sellers with a gap.
In this context if price retraced back into the tail it would have been a trade. However it needed to dip into it significantly to bring the SL into range. It did not so no trade.
A modified Schiff upfork is drawn using the break of the last swing as pivot A. Price follows it nicely and tests the bottom parallel. PA did not provide opportunity and also the SL would have been significant so again no trade as shown.

A note about TAILS. Also called pinbars and other names it represents an effort to move price one way and this is immediately reversed the other way. It is popular to think that such price action signifies a price reversal but in fact it can go either way. The question to ask oneself is "what happens after the tail forms?" If price engulfs the tail with a gap bar then this is significant. Tails at a low signifies the presence of buyers and at a high sellers.

A bullish engulf of a bearish tail (tail pointing upwards) to the upside suggests continued upward momentum.
A bearish engulf of a bullish tail (tail pointing downwards) to the downside suggests continued downward momentum.

Without proper context tails and engulfed tails are meaningless and should never be trade in isolation.

April
Trade 5 and no trade

Price follows the modified Schiff upfork nicely and seems on a mission.
Dips in price are trade opps but only if they dip to where buyers were and only if the SL is at structure and is not too large so that a 3:1 trade is not reasonable.
So the "no trade" as shown.
Trade 5 occurs after price breaks out of a coil and makes a new high. Price returns to the coil and in this context a buy can be entered. The SL is small and the target of 3:1 is reasonable.

A word about forks.
I draw forks usually after analyzing overall PA. This involves looking at swings, gaps. tails, etc. etc.
Median lines merely show the path of price and the lines of the median line or fork really should not be used as trade signals.
Some look for trades on the lines of the fork. I do not.
Certainly when price approaches a line and it happens to occur where bull/bears were then I'll entertain an entry.

If you review the trades up to this point you'll see a common theme:
1. Established buyers/sellers decisively taken out and trade the return to that area
2. Favorable PA at structure where there are buyers/sellers.

1 and 2 must occur in proper context. Never in isolation.

April
Trade 6

Price makes a new high and tries to continue but fails.
The two pink arrows point to 2 tails signifying sellers. Remember after a tail develops we wait to see what happens next.
A small coil forms followed by a large WRB gap that takes price down and takes out a confirmed swing at left.
A new modified Schiff shows the path of price after the coil/gap.
The coil/gap screams sellers. The sellers test then retest. The retest is a sell and a near 3:1 trade ensues.

Hi Winston.

Love your work and clear explanations. Over the past decade or so I've read a few pdf's on pitchforks, median lines, schiff etc but have never really committed to the subject. If I were to start from scratch and begin an honest journey to learn how to trade pitchforks, would you be kind enough to recommend some free resources (pdfs, videos, etc) that you know are teaching the subject the right way, or at least the way you believe is correct.

Thanks for any information you can provide.