:: actio-et-reactio ::
amg's market charts and blather
One place where people "new" to technical analysis get stuck is in half or fully blindly throwing indicators on a graph and then trying to figure out what it means.
Mind you, everyone has been there, including myself, and it is from getting OUT of that rut that I've learned, and from where I speak.
So some BASIC basics about median lines, Andrews pitchforks, action-reaction lines, or as I much prefer to call them, for a very important reason: BISECTS.
Bisect: to divide in half. Half is above, and half is below.
I included action-reaction because it is fundamental to the idea of BISECT. It is also why I call this site actio-et-reactio -- it is Newton's first law, that for every action there is a reaction.
When you draw a pitchfork, a BISECT, you are drawing a 50-50 (half above-half below) probability line:
- The P0 (origin pivot) represents the final ACTION price took before reversing its course
- The P1 and P2 price points are recent price REACTION extremes relative to the origin pivot
- The median line (the BISECT) is HALF-WAY between those recent extremes and is therefore the BALANCE point, again, relative to the origin pivot
- The projected lines are ALL conjectures of
-- future price balance (bisect line-the middle line) and
-- future price extremes (median parallel lines, upper and lower lines)
When you consciously remind yourself of these fundamentals everytime you draw a "fork"-- a BISECT, you will begin to "see" why one might choose the mid-point of a prior move as an origination pivot-- it is the point where half the prior profits (or losses) sits. Hopefully, other things will begin to "pop out" at you the more you realize median lines represent probabilities, at times 50-50, but often 80-20 (confluences, retests, gap throughs, etc).
A swing moves up and down from the balance point. The only time price just sits there is when there is the balance on both sides is equal, but that may be only at one level. Even in congestion, price is moving THROUGH the balance point to the extremes, searching for a new balance point. The bisect (median line) is the balance point, the upper and lower MLs are the extremes.
You must THINK balance, BISECT when ever you draw your lines. When you see a fork that appears to be "containing" price well, even with an "odd" origination pivot... don't get all prudish and academic and think that's not a "correct" pivot. Step back from the chart (go one step higher in time frame) and see how that pivot relates as a possible balance point in the larger context.
There are a few other "BASIC basics", which I'll comment on later as this is enough for now.
|
moon phases |
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
blather: nonsensical talk.
At times my analysis log, at times sharing what I've learned. Always my own work and views.
Content: amg
Basis: glish & bluerobot
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