Resources to learn Median Line trading

Resources for learning more about Median Line trading..


1.Best Trendline methods of Andrews by Mikula forecasting

This book will give an insight of how Median lines can be used for trading, finding entries and targets .Right from the basic concepts to the trade setups the book is a good reference to build a system.

2.Timothy Morge is a professional trader of 39 years experience and has been actively using and sharing his knowledge about median line trading .He has some wonderful websites ,
www.medianline.com and www.marketgeometry.com which can be accessed for loads of information, charts and articles which with patient study throws up gems to use ourselves.

My blog also has information about the above.

Median Line System for Trading

The method of trading with Median Lines,also called as Andrews pitchfork has been called as one of the leading indicators which can be used to predict high probability price targets .Combining it with trading rules / money management the method can be used as a good system.It can be used in all time frames, and gives very good entries and exits for positional trades.

The method is suitable for traders who prefer to use charts for their technical analysis for calculating their levels.It's basically a VISUAL method with price patterns against systems which use Numbers / ratios for finetuning levels.

Median Lines can be used in combination with Fibonacci ratios very effectively for trade setups.

I have learnt about this interesting system over the years with information on the internet and trading with the concepts and setups which I have evolved from the knowledge.The system performs well as in any other system only when we trade with rules , stoploss mechanism and money management.
Let me move on to the basic concepts..

Median line studies utilizes the concepts of support, resistance, and retracements .

Median Line method also called as Andrew's Pitchfork was developed by Alan H.Andrews.
Andrews' Pitchfork is a trend channel tool consisting of three lines.
The lines formed can help predict channels of support and resistance in a trending market.There is a median trendline in the center with two parallel equidistant trendlines on either side. These lines are drawn by selecting three points, usually based on reaction highs or lows moving from left to right on the chart. As with normal trendlines and channels, the outside trendlines mark potential support and resistance areas. A trend remains in place as long as the Pitchfork channel holds. Reversals occur when prices break out of a Pitchfork channel.



How to draw Median Lines

1.Identify a significant ( high or Low) reversal point- this becomes Point A.
2. Draw a line from this point to the next significant reversal point at Point B.
3.Then plot a line from a significant point early in the trend ( Point C) bisecting the first line halfway between A & B.This is the Median Line.
4.Now draw two lines parallel to the Median line, one starting from Pt A and other from Pt B.
5.These form the Median line set / channels or Andrews Pitchfork.

How to draw the charts
1.There are many stock charting programs which have Andrews pitchfork tool.
2.Web based charts programs like Icharts.in have line tools where the APF line can be drawn and saved.
2.Copy charts and paste them in Paint program and draw the lines.( But this is a time consuming process for short term trades.However can be used for longterm trades /positional trades.

16.09.2011_Friday

Hourly chart update

Price has reached the expected target at the Blue median line .One more attempt till 5150 possibel if 5050 holds.Otherwise expect it to fall down towards 4900 -4850 band.

15.09.2011_Thursday

Hourly chart 15.09.2011

Well...Nifty dances always differently than what we anticipate.

Instead of the fall towards 4750, past two days price action with the volatile rallies and fall, difficult to take a call and sit tight. Getting into trades with stoploss getting hit both ways will only be the result of volatile movements.


However, the median lines has given an outline for the direction.As price did not breach 4911 low, the consolidation and the rise in the upsloping blue channel indicates the short term upmove till 5100-5150 levels as expected earlier.Beyond 5150 - above 5175 then further upmove should unfold, otherwise the great fall till 4700 should materialise.Watching out 5100-5150 band for the resistance.

13.09.2011_Tuesday

Hourly chart update

12.09.2011_Monday

Daily Chart
Last weeks price action - Made a low earlier in the week and zoomed above median line and has closed near the median line at 5059 levels.
For a long term upmove the retest of low of 4720 is expected.So next week the price can attempt to go down till 4850 - 4800 levels.
Trade Outlook : Sell at 5120-5150 levels for targets 4850 levels and lower
.So beginning of week expect the price to move up to retest the swing high .
Stoploss for sell will be at 5160.
SAR - 5175 for targets 5400 levels.

Hourly chart projections


Charting the hourly with the median lines , with the momentum of the last days move , price can attempt testing 5000 levels , bounce back to 5100 - 5150 levels and then fall down further towards 4850.If it breaksout of 5175 after touching 5000 then upmove can be expected upto 5400 levels.
Trade Plan:
1.If price reaches 5100-5150 levels on Monday / Tuesday then,

1.a.Sell sept futures at 5120-5150 levels + Sell PE 5200 at 5120 levels - SL 5160.
Target 4850 ...Stoploss 5160. SAR 5175
When in profit by 50 points close PE 5200 and sell PE 5000.

2.If price reaches 5000 levels on Monday / Tuesday then,

2.a.Buy Sept futures at 5000 levels + Sell 4900 CE at 5000 levels - SL 4950
Target 5100-5150..Stoploss 4950. SAR 4940
When in profit by 50 points close CE 4900 and sell CE 5200.

Maximum points for stoploss to be 25 points per combination.

2.09.2011_Friday

Weekly chart
Price touched low of 4720 last week close to lower median line ( Schiff ) also a parallel to the trendline connecting highs of previous swing.
This week though short, has give a wide green bar , retracing previous swing.it has touched the downsloping median line.
Two probabilities if bullish
1.The price can zoom through the median line next few weeks to attempt testing of the upper median line till around 5500 levels.
2.Price can retrace till 4850 levels and then continue upward journey .Upper side targets will be at approx 5200 -5400 levels.
If bearish
3.the price breaks down through 4720 - swing low, then lower levels targets can be 4500 - where it touched the Lower median line parallel of the larger APF .Further downside can be worked out as the the chart evolves.

Hourly chart


Trade Plan for next week

Futures + options Covered call/ put trades.This is the basic plan but entry prices will have to be finetuned as per premium of calls / puts.Stoploss for future will be 30 points and calls / puts closed.

1.Sell 2 lots Sept futures @ 5100 levels + Sell Sept PE 4900 , Sell Sept PE 4800 - Target 4850 levels .

2.Buy 2 lots Sept future @ 4850 levels + Sell Sept CE 5100- 1 lot , Sept CE 5200 - 1 lot - Target 5200-5350 levels .

3.If price breakdown , Sell 2 lots Sept futures below4720 levels , Sell Sept PE 4500 / 4400 1 lot @.