Thursday, May 2, 2013

How price react with median line

look at the chart below. Its 4hrs chart of eur/usd.
 

same thing , see price forms bouble tops and breaks the lower parallel line of pitchfork and also signal line, Its also sign of sell, also look , price moves from A to b swing then go swing C, It then  finally moved to swing D and fails to arrive median line, Which makes double tops ,these are signal of reversal. Also failure to reach median line is also sign to sell.



Median line trading rule:

Median line: It is multi pivot line, 

how to draw median line:

two high or low swing point, point between high and low, and a third point from where the price started to swing. see the picture.


Median line theory:

  • 80% of the trading time price moves towards the median line. 
  • Price makes several swing before leaving median line,
  • if price fails to reach the median line it moves opposite dirrection more than previous swing.
  •  All the rule are explained in figure





     






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