andrews pitchforks predictive of market behavior bob hill
TRANSCRIPT
Andrews PitchforksPredictive of Market Behavior
Bob Hill
Outline
• Reading a Chart to Predict Price Action• Action / Reaction Lines (Every Action has an
equal and opposite Reaction)• Median Lines• Andrews Pitchforks• Rules to Use Pitchforks• Application to Random Charts
Personal Rules for Trading
• Slow Down, there will always be another trade• If there is not a good, high probability set up,
do not trade (no boredom trades)• Enter after a test on the re-test with a limit
order• Set stop and target with order (stop and target
are active if limit order is filled)• Minimum Reward / Risk 2:1 prefer > 3:1
Mark Charts to UnderstandPrice Action
• Mark higher highs and lower lows to determine Pivots
• Mark Significant Pivots (highs and lows) with lines all the way across the chart
• Identify the TREND• As you mark your chart, notice possible
Multiple Pivot lines• Draw the MPL that best fits the Trend
Price Movement
Price Movement 2
Price Movement 3
Multiple Pivot Lines (MPL)
Doubling The Range in Consolidation(Building Energy for a Break Out)
Action and Reaction
• Any action is followed by an equal and opposite reaction
• A movement down is usually followed by a movement up
• Use Significant Pivots
Median Lines
• Drawn from Significant Pivots• Use A B C as points for pivots• Derived from Middle of BC Line• Median Line is the line from Point A through
the middle of the BC Pivot line
Find Major Pivots
Draw BC Centerline and Find Midpoint
Draw Median Line (A to Midpoint)
Add B and C Parallel to Medianline
Rules for Median Lines (5 rules)
1. There is a high probability that prices will reach the latest ML
Rule 1. 80% Probability the move will reach the next median line
Rules for Median Lines (5 rules)
1. There is a high probability that prices will reach the latest ML
2. Prices will either reverse on meeting the ML or gap (zoom) through it
Rule 2. Price will either reverse on meeting the ML or
Rule 2. Price will either reverse on meeting the ML or Gap (Zoom) through
Rules for Median Lines (5 rules)
1. There is a high probability that prices will reach the latest ML
2. Prices will either reverse on meeting the ML or gap (zoom) through it
3. When prices pass through the ML, they will pull back to it
When prices pass through the ML, they will pull back to it
Rules for Median Lines (5 rules)
1. There is a high probability that prices will reach the latest ML
2. Prices will either reverse on meeting the ML or gap (zoom) through it
3. When prices pass through the ML, they will pull back to it
4. Prices reverse at any ML or extension of a prior ML
Prices reverse at any ML or extension of a prior ML
Prices reverse at any ML or extension of a prior ML
Rules for Median Lines (cont.)
5. When prices reverse before reaching the ML, leaving a “space”, they will move more in the opposite direction than when prices were rising toward the ML. (Hagopian’s Rule)
Rule 5 Hagopian’s Reversal Rule
Rule 5 Hagopian’s Reversal Rule
Rule 5 Hagopian’s Reversal Rule
Standard Pitchfork
Schiff of Pitchfork (Jeremy Schiff)
Modified Schiff of Pitchfork (Dr. Andrews)
6 Billion Japanese Yen
6 Billion Japanese Yen (60 min.)
BRCM Daily
Apple Daily
Apple Daily
Apple Daily
Apple Current
Action Reaction LinesAndrews Pitchforks
• Slow Down in Trading• Trade close to the edges but with confirmed
turns• Wait for a recognized set up• 2:1 Reward / Risk minimum• Have Realistic Profit Targets (may get more,
but only expect about 3:1)
Summary
• Reading a Chart to Predict Price Action• Action / Reaction Lines (Every Action has an
equal and opposite Reaction)• Median Lines• Andrews Pitchforks• Rules to Use Pitchforks• Application to Random Charts
Resources
• Free resource www.medianline.com contains Dr. Andrews entire book.
• Free + paid resource (lots of free stuff) www.marketgeometry.com
Marketgeometry has a free 1.5 hour session every Monday at 2-about 3:30. They are recorded and available later. Look at some of these for additional help.
• Watch marketgeometry web site for additional free information.