Cannot Find Good Trades with ML
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I always find very good trades using ML. If you will put more emphasis on the setups and market structure, you will always have good trades. I have said it numerous times, drawing a fork is the easiest part, reading price action is the hard part and it will help you frame your trade and I am sorry there is no shortcut to it.
If price broke and closed above the green line on that white chart, would you go long on that? or do you always trade off a line? Sometimes when price breaks and closed above a solid swing high/low pivot they can really gain some steam.
what is the difference between trend lines and pitchfork?
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Trend lines show diagonal support and resistance while a pitchfork is a methodology. It's more than just 3 lines, it has a lot of geometric symmetry and principles that apply to those 3 lines and how the price interacts with it.
I think they are worlds apart. Reading a good book on median lines will reveal this very quickly. Warning lines, trigger lines, minor and major forks, interactions with the median line, near parallel and far,et cetera. Most important is how the market interacts with all of these levels and what the wave structure is during the interaction. This information can be used to gain clues about strength or weakness.
At most regular trend lines just let you know if a potential support or resistance level has been broken. By itself it doesn't give you enough clues if that break is valid or just a correction before a continuation of the trend.
Diff b/w Trend Lines and Forks
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A trend line is just a line in space (b/w price and time). It carries no probability with it. Price may or may not respect it.
Forks carry probability with it. There is an 80% chance that price will touch the latest ML. It also shows the probable path of price. ML is a leading indicator with a mathematically proven probability.
Cannot Find Good Trades with ML
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I always find very good trades using ML. If you will put more emphasis on the setups and...
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I think the "80% chance that price will touch the latest ML" line is oversimplified. There's an art form and a method to identify the correct fork. The way you've worded it suggests you can pick any three points that vaguely identifies a median line and expect it to work 80% the time. If it was that easy then every fork trader would be a millionaire, and we know that isn't the case at all.
Forks are very similar to a lot of other methods in the fact that most people don't apply them correctly. Most tend to half-read a book and only apply half of what they've learned. The original quote by Alan Andrews comes with the stipulation that the person understands the basic structure and principles of forks to correctly apply them.
Best example I can think of is how often I see people misidentify a pattern like the head & shoulder. They don't realize the pattern represents market psychology and is only found at the top of an up-trend. Many just see the pattern and jump on it. There's a huge difference between finding a head & shoulder at the bottom of a market or at the top. If they don't understand the psychology of the shoulder waves and the head, then they will incorrectly identify and trade an invalid pattern. It's not a small detail that this pattern is found at market tops, it's one of the basic tenants.
I think the same is definitely true with pitchforks. There are many principles that can be found time and again with how the market interacts with the levels to give you clues whether or not the fork is even working.
I think the "80% chance that price will touch the latest ML" line is oversimplified. There's an art form and a method to identify the correct fork. The way you've worded it suggests you can pick any three points that vaguely identifies a median line and expect it to work 80% the time. If it was that easy then every fork trader would be a millionaire, and we know that isn't the case at all.
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It is as simple as I have worded it. Price touches the latest ML 80% of the time. Watch this video made by catalin (the guy who started this thread). http://www.youtube.com/watch?v=VTtqs...yer_embedded#!
Atleast it happens on my charts and I use it to my full advantage.
There is a methodology to everything, even how to wash dishes. So there is a methodology to using forks as a trading tool. But it does not change the fact that price will touch the latest ML 80% of the time.
Please show me the statistics on other methods that you have used, like head and shoulder. I have a very good understanding of chart patterns and I have read 3 books on them and not half-way.
Let someone arise from my bones as an avenger. Jesse Livermore
It is as simple as I have worded it. Price touches the latest ML 80% of the time. Watch this video made by catalin (the guy who started this thread). http://www.youtube.com/watch?v=VTtqsmCqMhQ&feature=player_embedded#!
Atleast it happens on my charts and I use it to my full advantage.
There is a methodology to everything, even how to wash dishes. So there is a methodology to using forks as a trading tool. But it does not change the fact that price will touch...
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My point is that forks are a methodology. You can apply that methodology correctly or incorrectly and therefore have differing results. That video is a good example because all of the forks he drew were after the fact. He didn't know what direction the market was going to head but afterwards he can create a pitchfork that was accurate. For every bullish angled fork there is a bearish angled one that failed and vice versa. So the 80% is after the market has already moved. Like any method it will give you information to help you do this on a live chart and the more you read the more tools you will have to aid you.
For every bullish angled fork there is a bearish angled one that failed and vice versa. So the 80% is after the market has already moved. Like any method it will give you information to help you do this on a live chart and the more you read the more tools you will have to aid you.
I dont know what is so much of an issue about forks here, but it is the best trading tool I have came across.
Look at this trade
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ForkTrader,
I like pitchforks and appreciate your comments about using them.
I don't want to take away from the points you are making, but I notice a data problem with your GBPUSD 377-tick chart. I was attempting to duplicate your chart as best I could. As I have only MT4 which doesn't have tick charts, I have to plot time based charts, and M15 seemed close enough. Of course there will be differences in the number of bars, but the basic hi-lo swing structure should still be the same.
Look at my GBPUSD,M15 chart attached. I have marked it up similar to your tick chart so you can see there is a lot of agreement to the structure. Curiously, though, your 377-tick chart is entirely missing a large number of bars from ~Aug 20th. I drew an rectangle surrounding approximately the missing data.
Look on your chart where you marked the first pitchfork swing high with a thick black horizontal line. Mine shows this as 1.5671. On your chart, the bars go down to around 1.5540 then up to around 1.5618 followed by a long swing down to just over 1.5372. Compare yours to my chart which starts at the same swing high of 1.5671, then goes down to 1.5463. This is much lower than your apparent 1.5540 swing! I drew the rectangle around the bars which I estimate your chart is missing.
Is your chart plotting cash-forex (like mine) or futures? Even if futures, I wouldn't expect to see much of a difference.
FYI, the missing data in this case does not change any of your primary pitchfork points. What it does change (slightly) is the slope of your Mod.Schiff pitchfork. If you had the missing data, the slope would be slightly decreased. From the looks of it, where your chart shows some overshoot of the MS PF where you said would be a good place to go short, if the MS fork was slightly shallower, it may well be that the entry would be from LESS of an overshoot, perhaps even an exact touch. So... it was a good trade (fortunately) and this data problem does not negate the points you made about it.
What do you think is the explanation for the missing chart data? Does your Ensign session have to be open/active to capture the live ticks or can you get the data after the fact? (presumably you use eSignal??).
FYI, the missing data in this case does not change any of your primary pitchfork points. What it does change (slightly) is the slope of your Mod.Schiff pitchfork. If you had the missing data, the slope would be slightly decreased. From the looks of it, where your chart shows some overshoot of the MS PF where you said would be a good place to go short, if the MS fork was slightly shallower, it may well be that the entry would be from LESS of an overshoot, perhaps even an exact touch. So... it was a good trade (fortunately) and this data problem does not negate the points you made about it.
What do you think is the explanation for the missing chart data? Does your Ensign session have to be open/active to capture the live ticks or can you get the data after the fact? (presumably you use eSignal??).
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Ensign and esignal gives a data refill for the time my ensign is not collecting data. It happens on very rare occasions, so I dont worry about it.
Here is a 15M GU chart. Somehow it got me the same fork as I had on 377T chart. I have also tried the same fork on FXPRO mt4 and still got the same fork. May be you should look for a better data feed to work your charts.
Attached Image (click to enlarge)
Let someone arise from my bones as an avenger. Jesse Livermore
Andrews Pitchfork (Median Line)
