Andrews Pitchfork (Median Line)

No median lines yet. Identifying key structures that may be helpful once price starts moving.

Current EURUSD 20 min chart.
The green up-sloping median line has been completed. Green A - B projected C - D. Once price reached the median line (center) the median line was completed. Price "zoomed" the green median line (center) line and then made way to next median line as was projected. We could label this "E" (not shown). Once price has reached "D" then the median line was completed and further usage of the median line is analogous to trading within a channel and using what some refer to as "frequency". While one can continue "hoping" price will follow the "lines of the channel" the other choice is to think about drawing new median lines and using the principles Andrew's delineated.

So here a new blue median line has been drawn. It's a down-sloper and by using a new median line that has not been completed we know that price has an 80% chance of reaching the median line (blue center line).




Knowing price has an 80% chance of reaching the median line we can start paying close attention to what price is doing here at the upper median line.

Price has moved off the upper median line. Still looking to sell for a trip to the median line once confirmatory PA appears.

GBPUSD 20 min current chart
Price has broken above 2 swings to the downside and failed to make a lower low. On the way up swings have been expanding and currently the largest expanding swing is testing buyers that took price up past the 2 swings. No bias. Just waiting for price to show it's hand in this area.

When using median lines there is no one right median line. There is no one right way to use median lines. There is a way that each one of us can use them to understand price for ourselves.

EURUSD 20 min current chart

So I've been watching this chart and didn't pull the trigger anywhere. Looking back I can see a couple of entries but didn't. At this point I'm unwilling to sell it to the median line as the R:R is no longer there. For now watching and following price.

I've abandoned the green up-sloper. It was pretty and demonstrating frequency but frequency IMHO has little to do with median lines. Price has reached the median line of the blue down-sloper where significant buyers showed themselves.


Here's a close-up of price action at the median line. The pink arrow highlights a bullish WRB outisde bar which gets taken out by a WRB gap highlighted by the red arrow. Price is now currently testing the sellers of this WRB gap. No predictions. Just watching.

USDJPY 20 min

I often put in a standard and modified schiff drawn from the same pivots. Not in this case. Price reached the median line of the orange ML and zoomed it with a WRB gap. It then gapped up again. The blue modified schiff I put in for following. Remember modified schiffs act more as channels so when price broke above it signaled a potential trend change. Price is currently testing the backside of the blue ML and the median line of the orange ML. BUT I wouldn't be surprised it it dipped futher to the lower WRB gap. If it does I'd be interested in buying the lower gap with target as shown. The SL is just ok. We'll see.

Arguably one of the most important of Andrew's rules is the fact that once the "C" pivot is made that price has about an 80% chance of reaching the median line. But how do we know when "C" is the real deal? Although nothing is ever 100% for sure we can look to certain price action elements that will give some confidence that a "C" pivot has occurred and really this technique can be used to confirm any pivot.

In this GBPJPY 3 min scenario price trended up and formed "B" then as price trended down it crossed the "trend line" (the center line) and kept going down. This phenomenon represents an expansion of price. When this happens we can entertain the possibility that a "C" pivot may form and when it does we can take advantage of Andrew's rule that price has a 80% chance of reaching the median line.

We can decide in this case that as long as price is going down that price is on the left side of a potential pivot. So what evidence would suggest that price has pivoted and would be on the right side of the pivot? Even if price begins to turn up it must still be considered on the left side of the pivot until it takes out a significant bearish bar or structure on the left. In this case the purple arrow pointing left highlights a wrb bearish outside bar. This bar is larger than many bars occurring before it. After it forms price descends further and makes a new low and a confirmed swing to the downside. But then price comes up and takes out the outside bar with a wrb (shown by the purple arrow pointing to the right). And in fact it takes out the last confirmed swing. It is at this point that one can consider "C" to have formed and that price is now on the right side of the pivot.

Once we have confidence in the "C" pivot we can entertain a buy with a target somewhere at the median line. I personally like price to come back a bit. Also one's R:R must be satisfied. In this case a 3:1 trade was planned.

I opened my own thread in the "trading discussion" section. "Abe's Median Line Thread". Hope to see you there.

The Indianapolis News Newspaper; Tue Oct. 17, 1989; pg. 43

had some fun drawing again today...not sure if anyone is watching nq but here it is

more for intraday stuff

maybe something more appropriate for currency...doesn't look too bad on gold futures GC 12-19

some trades i had thurs friday, nice triangle break...classic stop run reversal at the low

Looks decent on oil CL 09-19

Lets see this one baby
This is what will happen
http://prntscr.com/pcacib
See ya in a month
The fork work

See ya soon

Catalin

Forks don't always work but they are interesting

Median lines always work but just not the way most think.

Am I correct to say that you use the median line as your baseline the same way most traders use a moving average?

Haven´t tested this yet, but I just finished reading that book "The Quarters Theory" and I think it will be very powerful combined with the median lines.

No I can't say that is the case. It's much more sophisticated than that but once understood it does have a degree of simplicity.

Moving average, as the name implies, it is just an average of price. The median line is a price projection.