Hey Everyone,
I'm new to Forex Factory - but I wanted to post some info that I have, it seems many newer traders miss. It's simple commonsense trend analysis that attempts to find pre-range mean accurately.
Take a look at the below chart - you will see that traditional trendlines and pitchforks can often fail, as really, simply connecting a few highs and lows and then dissecting a rally, or trough, really actually gives us the incorrect future trend. However, if we use the highs - pre-rally (on a descending move and vice versa for ascending "pops") we will find a trendline the cuts through the subsequent move.
Then, if we use the high (or low in the contrary case) and pull our trendline through the rally (or trough) where our previous trendline meets... We are left with an accurate pitchfork mid-line - where typical pitchforks and trendlines fail. Then, drawing a parallel line above and below - you see that we would have been able to uncover a short entry on descending resistance, before it ever even happened.
Because so many fail to understand where and how typical trend tools fail, I thought it necessary to share this information with you!
http://www.forexfactory.com/attachme...1&d=1212603113
I'm new to Forex Factory - but I wanted to post some info that I have, it seems many newer traders miss. It's simple commonsense trend analysis that attempts to find pre-range mean accurately.
Take a look at the below chart - you will see that traditional trendlines and pitchforks can often fail, as really, simply connecting a few highs and lows and then dissecting a rally, or trough, really actually gives us the incorrect future trend. However, if we use the highs - pre-rally (on a descending move and vice versa for ascending "pops") we will find a trendline the cuts through the subsequent move.
Then, if we use the high (or low in the contrary case) and pull our trendline through the rally (or trough) where our previous trendline meets... We are left with an accurate pitchfork mid-line - where typical pitchforks and trendlines fail. Then, drawing a parallel line above and below - you see that we would have been able to uncover a short entry on descending resistance, before it ever even happened.
Because so many fail to understand where and how typical trend tools fail, I thought it necessary to share this information with you!
http://www.forexfactory.com/attachme...1&d=1212603113
