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Andrews Pitchfork (Median Line)

  • #2,481
  • Aug 30, 2010 2:37pm Aug 30, 2010 2:37pm
Quoting kosai
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...
How about a challenge, try drawing a pseudo chart by hand and then add median lines. You'll find it very hard to create a chart where median lines DON'T hit 80% of the time.
  • #2,482
  • Aug 30, 2010 2:49pm Aug 30, 2010 2:49pm
Quoting taub
How about a challenge, try drawing a pseudo chart by hand and then add median lines. You'll find it very hard to create a chart where median lines DON'T hit 80% of the time.
I have done it numerous times. I have asked my wife to draw some random price action (line chart) in Paint, and I applied the ML it worked perfectly. After that I have done the same with my brother-in-law, same results, and also did it with few friends and it worked perfectly.
So I concluded that there is always an order to chaos and ML is a perfect tool to find that order.
Let someone arise from my bones as an avenger. Jesse Livermore
  • #2,483
  • Aug 30, 2010 3:04pm Aug 30, 2010 3:04pm
Quoting forkTrader
...
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.
Yours and my M15 charts have identical data (the swings agree), so there's nothing wrong with my "data feed".

Your M15 and 377T charts do not, however, show the exact same path that price took down from the start of your pitchfork. If you go back and review the exact swing low prices, specifically the swing low at 1.5463, it is no where to be found on your 377T chart.

In case words don't convey my meaning...
I'm not trying to be argumentative; just pointing out something for your benefit;
and no, this missing data on your 377T chart does not in THIS case make much of a difference to the mod. schiff fork drawn.

I'm just bringing it to your attention that your 377T chart was in fact missing a few hours of data and you might want to understand/explore the root causes before it happens again and - unlike this example - actually does have a major impact on the fork.

If it doesn't matter to you, then no big deal, let's drop it.
  • #2,484
  • Aug 30, 2010 3:12pm Aug 30, 2010 3:12pm
Any body traded this fork.
I am still holding my shorts covered @ added some more @ 1069 let us see how far it can go.
updated charts

http://www.forexfactory.com/showpost...postcount=2451

Regards,
TAQ
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  • #2,485
  • Aug 30, 2010 3:15pm Aug 30, 2010 3:15pm
Just GBP/JPY 4H time frame
Anyone spot this one?
Or its another view on this chart?
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  • #2,486
  • Aug 30, 2010 3:26pm Aug 30, 2010 3:26pm
Quoting justcatalin
Just GBP/JPY 4H time frame
Anyone spot this one?
Or its another view on this chart?
Looks to me more likely that it will blow through and continue down to the lower quartile.
  • #2,487
  • Aug 30, 2010 10:30pm Aug 30, 2010 10:30pm
Quoting taub
How about a challenge, try drawing a pseudo chart by hand and then add median lines. You'll find it very hard to create a chart where median lines DON'T hit 80% of the time.
I completely agree with you. My point is that it hits 80% the time because you are already drawing the correct fork. On a live chart you are speculating where the bottom is and therefore after the market has finally made a bottom, then it hits the median 80% the time. The problem is if you drew the fork trying to find the bottom it would have failed many times before this supposed "80%" return to the median line happens. So this statistic is only accurate long after the market has already turned. That's what makes it invalid the way that forktrader has worded it. Yes you can take any past chart and show the 80% relationship AFTER the bottom is already known but this doesn't work on a live chart. That's why the 80% isn't accurate until after the fact. I'm not debating if that information is still useful or not, because it clearly is, i'm debating that oversimplified statement that forktrader has made.

It's also worth nothing that some people seem to be thinking in absolutes. If i'm not praising forks then I must hate it... this isn't correct. I have been trading with forks for 6 years now and in fact the first methodology book I read was the Patrick Mikula "5 trendlines..." book. I've followed Tim Morge's work for years and it's one of my favourite methods. The ONLY point I disagree with here is the oversimplified statement that forktrader has made. Everything else so far we have agreed on. It's not a "small" point because it works with conditions. The way he stated it any with zero knowledge can toss up any fork on a live chart and have it return to the median line 80% the time to their advantage, which is completely false. That's our ONLY disagreement here. I'm not saying alan andrews was wrong for saying it returns 80% the time, i'm saying it does so with conditions.
  • #2,488
  • Aug 30, 2010 10:47pm Aug 30, 2010 10:47pm
I'll attach 4 charts to show what I mean.

It had 3 failures since each correction was advancing towards the median line. Only after the fact did it finally return. I think we can all do math here, what's the percentage if out of 4 forks you have 1 of them successful? It is 25% and not 80%. If you attach conditions to it then yes you can get this 80% if you are already waiting for it to hit the median line before you use this information to trade.

You can use a closer pivot for the first point but the idea will be the same. For every fork there are many points where the fork could have been drawn and still be a valid fork. The further the market advances the higher number of previously failed forks. I think forktrader and a few others automatically skip over and ignore all the other failed ones and are trying to say this stuff always work 80% the time, it doesn't as I've shown here under all conditions.
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  • #2,489
  • Aug 30, 2010 11:09pm Aug 30, 2010 11:09pm
Here is a better example that's more clear.

Andrews says that if the instrument is moving towards the median line then it will hit 80% the time. That's why I picked all the points where the market has 2 or more bars that already advancing towards the ML.

As you can see all of these declines are just corrections of the larger trend. It clearly illustrates that again, the accuracy is 25% and not 80% in a real world chart. I think people claiming this 80% with no conditions are skipping over the failed ones and seeing what they want to believe.

Most forks have 1 or more corrections before the final top of the fork is made. It's easy after the top has finally happened to look back in the past and show this, but on a live chart is where the real statistic is found.

Like any method there are ways to correctly apply this. You can figure out ways to wait for a set of events to take place before expecting the fork to work or like forktrader you can wait for the return and trade after. My point is that the statement is oversimplified and these charts clearly show it.
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  • #2,490
  • Aug 31, 2010 3:10am Aug 31, 2010 3:10am
kosai, how long you have been using forks. It looks to me that you have just started using ML. I think I have not read anything of a two bar concept in the Andrews course. Some ML Quakes are selling this concept, and I dont buy it.
Pivot is a change in direction. Before making a fork you have to make sure that a pivot has already formed. Market structure is a key to make sure a pivot has formed. Sometimes Action Reaction lines help.

Learn a little bit more befor trying to comment on this methodology.
Let someone arise from my bones as an avenger. Jesse Livermore
  • #2,491
  • Aug 31, 2010 3:34am Aug 31, 2010 3:34am
EURO changing direction
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Let someone arise from my bones as an avenger. Jesse Livermore
  • #2,492
  • Aug 31, 2010 6:35am Aug 31, 2010 6:35am
Quoting forkTrader
kosai, how long you have been using forks. It looks to me that you have just started using ML. I think I have not read anything of a two bar concept in the Andrews course. Some ML Quakes are selling this concept, and I dont buy it.
Pivot is a change in direction. Before making a fork you have to make sure that a pivot has already formed. Market structure is a key to make sure a pivot has formed. Sometimes Action Reaction lines help.

Learn a little bit more befor trying to comment on this methodology.
Have you not read what I have typed? I already stated how many years I have been using this method. Also, I have shown that your oversimplified statement is incorrect. I am not debating pivots I am debating the statement you have made.
  • #2,493
  • Aug 31, 2010 7:25am Aug 31, 2010 7:25am
Quoting kosai
It had 3 failures since each correction was advancing towards the median line. Only after the fact did it finally return. I think we can all do math here, what's the percentage if out of 4 forks you have 1 of them successful? It is 25% and not 80%. If you attach conditions to it then yes you can get this 80% if you are already waiting for it to hit the median line before you use this information to trade.
First I have to say that your sample was obviously very small and biased (fighting the trend).
What you are overlooking are all the smaller median lines in your picture which pointed up, and had their target hit. If you were to draw in every possible median line over that timespan, you'd end up with a much higher hit rate.

Secondly I don't think anyone said that you can win 80% of your trades (Tim Morge said he wins 60% or so) using median lines, what it says is that it will return to the median line 80% of the time once a C has formed.
Now, as a trader this is the big challenge, is it a valid C?

Of course the probability is after the fact, again, when trading this method you have to find valid C's, then add your 80% win chance target to it.
Median lines are by no means an easy method of predicting the market, and it is even harder to trade them because there is a lot of discretion involved.
I think the statement should be "If a C has formed price will hit the median line 80% of the time".
  • #2,494
  • Aug 31, 2010 10:18am Aug 31, 2010 10:18am
Quoting kosai
Have you not read what I have typed? I already stated how many years I have been using this method. Also, I have shown that your oversimplified statement is incorrect. I am not debating pivots I am debating the statement you have made.
Yes I have read that you have 6 years of experience using forks. Teach me a thing or two about ML. Show me few setups and techniques.
Let someone arise from my bones as an avenger. Jesse Livermore
  • #2,495
  • Aug 31, 2010 11:15am Aug 31, 2010 11:15am
Keep an eye on this setup.
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Let someone arise from my bones as an avenger. Jesse Livermore
  • #2,496
  • Aug 31, 2010 11:29am Aug 31, 2010 11:29am
Quoting taub
Looks to me more likely that it will blow through and continue down to the lower quartile.
...almost there, and on the second post since joining FF almost two years ago.

Gotta watch the quiet ones...
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Listen to the whispers.... You may learn something
  • #2,497
  • Aug 31, 2010 11:41am Aug 31, 2010 11:41am
Quoting forkTrader
Keep an eye on this setup.
Forktrader what data feed did you use with Ensign ?

Catalin
  • #2,498
  • Aug 31, 2010 11:53am Aug 31, 2010 11:53am
Quoting justcatalin
Forktrader what data feed did you use with Ensign ?

Catalin
I use FXCM that comes free with ensign. My setup for GJ
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Let someone arise from my bones as an avenger. Jesse Livermore
  • #2,499
  • Aug 31, 2010 11:58am Aug 31, 2010 11:58am
Quoting taub
Of course the probability is after the fact, again, when trading this method you have to find valid C's, then add your 80% win chance target to it.
Median lines are by no means an easy method of predicting the market, and it is even harder to trade them because there is a lot of discretion involved.
I think the statement should be "If a C has formed price will hit the median line 80% of the time".
Spot On! to forktrader and others: please keep posting your charts, I'm still learning this craft.
  • #2,500
  • Aug 31, 2010 1:06pm Aug 31, 2010 1:06pm
Kosai 80% probability is not after the fact it depends on the Rythm & harmony of price & your pivot selection. I am also new to ML trading . I have been trading this from last one year or so but after trading and putting 1000's of hours I know for sure 80% probability of hitting ML is very much there.

Here is one example I posted here somewhere i started shorting UJ @ 89.00 since than I traded this fork 4 times in 240-min time frame.

Regards,
TAQ
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