Trading with Median Lines /Andrew's pitchfork

[Kavima]

Hi Dan
I did have a note that it might look complex with so many line across the chart.At times when I refer some of my old charts ,I get confused and erase the old lines and redraw them to get a clearer picture. :lol:
The additional lines in the chart in my last post was more to show friends here ,my thought process while looking at a chart and analysing the outcome according to my belief in my method.The chart does not need to be complicated and a practised eye can assess the way in which the swings can sway and take a decision accordingly. However , as traders we always look for confirmations for taking a decision with 2- 3 indicators , confluence of regular trendlines,horizontal supports,resistances , fib ratios.To use only median lines and price action ,price bar patterns may be difficult initially and using the above mentioned TA we arrive at a decision.
All of us go through the process of experimenting with various indicators and finally settle for a few which we are comfortable with.
I'm sure you can also add Median Lines to your tool set

 

[DanPickUp]

Hi Kavima

Last week I had a chat with E1 and he and me agrees, that median lines are a nice tool to use.

I mean, I was study your chart and I found it very interesting what you explained. I even took my time to spot your targets with all the different forks you showed.

My thoughts then have been, that not every body is able to understand and see all this forks and levels and then I posted my questions. By the way : Here on my table is a document with 200 pages and it is called : 14 Strategies of a million trader.

Guess who is the writer of that stuff : T.M

Any way: Many traders just jump in a trade and do not spot, what and where and why they pull the trigger.

Median line is a tool to spot special entry and exit points.

Tc care and keep up your nice post.

DanPickUp

 

[EagleOne]

Kavima
In the SBI chart, your post #19, the ML seems about 2-3 degree steeper. The setup will become more precise and safe, IMO, if it passes through the last two highs (1980+).

 

[Kavima]

hi

Posted todays' Nifty Chart with a pattern called as "Lazy Z pattern" created by Timothy Morge,the Median Line expert .Pl see this link to read the detailed post.Hope u enjoy it!
http://www.traderji.com/futures/53485-nifty-entry-exit-target-levels-median-line-charts-6.html#post589271

 

[Kavima]

SBI Chart followup

Posting the SBI chart .The price did not reach the Support of Green Lower Medain line parallel at the area near F , but has climbed up to meet the junction of Blue Median line and green Median Lines which is the Possible point of resistance.

 

[4xpipcounter]

Kavima, I am curious about something, and with regards to this chart, it augments my curiosity.
Many casual observers might look at your chart and think, "All these lines! Some going up, some going down." As a trader, how do you determine how to take a position. Is there are fork you consider most dominant, or do you use the fork for an entry that is most confluential with other factors?
Does it mean much to you as far as support or resistance is concerned when forks form an apex?

SBI Chart followup

Posting the SBI chart .The price did not reach the Support of Green Lower Medain line parallel at the area near F , but has climbed up to meet the junction of Blue Median line and green Median Lines which is the Possible point of resistance.

 

[Kavima]

HI FRIENDS

Let me continue with the basics of median lines and some more charts to understand the concepts.

Foundation of the Median line - 50 % ratio

50 % Ratio indicates the strength of a developing swing / trend and is an important level to use in trading.We calculate the 50 % levels of Year H-L prices,Month H-L prices,Week H-L prices and use them to outline the market's strength when below or above the 50% level.For trading using swing H-L prices and calculating 50 % level, we can assume the trend is down when prices are below and up when prices are above.

The System or Method

Median Line method can be a stand alone system with some simple rules similar to the concept of using trendlines.Like in trendline channels, this is also a trend identification channel , but gives a higher probability of the points where the price can lead to.There are many common features ,and some nuances of median lines which each individual can develop as per his trading style.

There are purist traders who trade only with median lines and patterns for confirming support and resistances at the Median Line, Upper median line parallel and Lower median line parallel.
It can also be combined with Fibonacci ratios,Moving Averages, Stoch Indicator for identifying swings and exit entry points.

How to use Median lines

The approach while using ML is to anticipate when price reaches the S/R , as to where it can go.The clues to identify will be previous horizontal S/R points, trendlines, retracements,breakout of minor swings etc.Also, patterns like congestion of bars, ledges, 123 patterns can be used for confirmation and trade entries/exits.

Using median lines on a chart is like drawing a road map to ascertain where price is going.The strength, weakness of the trends can be identified by drawing the lines and where the reversals can take place.

Drawing the Median Lines

Pivots are the starting points in drawing the Median line set.
Pivots can be defined as the turning points in charts.
They can be
- selected visually where the swings are identified with low and highs
- Pivot Bar should make a higher high and the bar after the pivot making a lower high .
- The High pivot bar will have previous 2 bars with lower highs and subsequent bars making lower highs / and vice versa for a low pivot

Swings
Lines between two pivots will be a swing.Smallest swing in a chart in a time frame will be a minor swing.
Combination of swings will make a major swing.A major swing direction will change when a minor swing high / swing low is crossed by the next swing high / low.

So we identify the pivots and mark the minor and major swings in the Chart.
The simple rule to identify the trend is that the trend is up when we are making higher highs and higher lows and vice versa for downtrend.

The Median lines can be used effectively only when they are drawn to encompass the trends already present .When we draw the median set and the price has bounced off the support and resistance levels at the UMLH and LMLH and the Median line, then we can presume the median line set which has been tested will for a good map for the trends into the future.This is very effective in long term daily and weekly charts.

For short term trading, the same concept applies and we identify the trend based on the previous 5-8 swings , but can be done with a minimum of 3 swings.For very short term intra day trades , we can keep working out the forks for smaller swings also.But of course it has to be combined with other patterns to confirm entries and exits.


See below some charts where price meets the median lines and reversals are identified.

 

[Kavima]

hi 4xpipcounter

Yes,you guessed right.

The junction points of Upsloping and downsloping pitchforks are probable points for prices to reach , and termed as energy points according to Timothy Morge.The price runs out of energy at these points and tends to reverse in the opposite direction.When there is a confluence of these points with Horizontal Support resistance lines , Fibonacci ratio then they are a good location to enter / exit trades.

 

[4xpipcounter]

Amazing stuff!
There is a strong similarity between your usage of the PF's and Fibs to my usage of the TL's and my S&R's.
If price hits a vortex and my S&R horizontal line is there? That trend is dead meat. It is reversing!
Your system is very familiar, which is why I'm enjoying reading your stuff.

LOL, the only problem is I need a map to keep up with you. You got threads all over the place. Still, you keep up the good work, and I'll keep reading.

hi 4xpipcounter

Yes,you guessed right.

The junction points of Upsloping and downsloping pitchforks are probable points for prices to reach , and termed as energy points according to Timothy Morge.The price runs out of energy at these points and tends to reverse in the opposite direction.When there is a confluence of these points with Horizontal Support resistance lines , Fibonacci ratio then they are a good location to enter / exit trades.

 

[Kavima]

hey,i'm just having 2 threads - this one to share whatever I know about Pitchforks and the other thread http://www.traderji.com/futures/53485-nifty-entry-exit-target-levels-median-line-charts-7.htmlmy updates on Nifty