(binned per thread starter’s request) Powerful is the Fork

EURUSD 60 min
Bearish price action appeared and provided a sell opportunity.
The blue fork suggests a target further down but this is probably a bit ambitious. Target determination yet to come.

Closed it

EURUSD 60 min

First chart shows a standard ML drawn using the impulsive leg.
Second chart shows a modified Schiff ML drawn using the impulse leg.

Both project price. Projection is the primary purpose of median lines...not diagonal support and resistance.

Standard median lines project price to the center line of the median line. The center line is actually properly THE MEDIAN LINE. The upper and lower parallels are just additions to the median line to provide visual pleasantry. Many erroneously try to use the parallels as diagonal support and resistance. Once pivot A and B are known then one can project the potential path of price from C to D based on A to B. Once D has been reached, as it nearly has in these charts, one must ask the question, what next? I'll answer that question but let's look at the modified Schiff first.

The second chart is a modified Schiff ML. In this chart it essentially decreases steepness of the center line such that price will reach it sooner than in a standard ML. Notice how the lower parallel is also less steep and it still provides a projection for price originally established by the standard ML. In this case the modified Schiff offers an earlier price target than the standard ML.

Hi Winston,

Is it time to reassess the EURUSD projection? If not, would you mind elaborating on where I may be wrong?
Thanks in advance

Hello Greenspanke,

I try to draw in MLs that are in line with the trend or given clues about what might be happening with the trend. In this case the red ML is congruent with the downtrend so its projection remains valid with the target being further below.

The blue ML is what I call a corrective leg ML which currently is in a Hagopian pattern. This means price has failed to meet the ML (center line of the ML) and the expectation is that it will move further in the other direction which at present it is doing and is in line with the current downtrend. The blue ML is not meant to project price in a new uptrend as many might tend to think. There is nothing to support this at the moment imho.

You've drawn in a different up ML that I think is potentially premature although strictly speaking it is not wrong. If price continues down then it will be violated or at least the C pivot will shift downward.

Thank you Winston. I really appreciate your response.

My personal view of EURUSD is that we are currently on wave 5 of C and Im not sure have seen the end of wave 5 yet.
My questions are to make sure I understand how to use or plot the forks properly. I use Elliot Waves but I'm still trying to find an indicator/system
to complement the EW.
I've also been using the forks on 15M when I'm scalping while @ work.

Really appreciate your taking the time to answer my question. Trade safe friend

G

Placed a small short.