Finding High Probability Lines
by Greg Fisher
A Book Written to Guide Market Technicians
in Finding High Probability Areas to Trade
Dr. Alan Andrews developed a technical market analysis tool called the Median Line and taught the method in the 1960's and 1970's. He determined there was a high probability price returned to the Median Line - a line drawn on a stock or futures price chart - after making three alternative price pivots. Dr. Andrews stated in his Action-Reaction course:
“…drawing a single line will enable you to know
where the price of any stock or any future is now headed
and the probable time it will reach there.”
AND, the method would,
“…enable the user to be one of the few who can
tell where the prices are headed, and the place
they will reach about 80% of the time,
and when approximately that place will be reached.”
Which brings a number of questions to mind:
Does such a simple method apply to today's markets?
If so, which markets?
Does price return to the Median Line more often than not?
What happens when prices NEAR the Median Line?
What is the probability prices will reverse
and change trend NEAR the Median Line?
When I first found some of Dr. Andrews’ work, I gave it little thought. It seemed simple – TOO simple. Behind the first appearance of simplicity, I quickly found out that there was much more behind Andrews’ words. Most likely SEVERAL years of market study.
The method intrigued me, so I set up a study of the Median Line method to put it to the test. I wanted to know if this old fashioned method worked. I extracted some of the major observations Dr. Andrews’ made and used them as a basis for the study. Dr. Andrews’ was an engineer by training and often referred to the probability of prices acting according to his observations. So I thought, why not start there?
I determined the probability of price acting according to Dr. Andrews’ observations for a few of the markets I liked watching. What did I find? To be honest with you, it really doesn’t matter what I found.
Why?
Because I drew the lines on certain charts of certain markets and certain time frames under certain conditions. Would the results I found apply across all markets, all time frames, and all conditions? Perhaps. Could the way I drew the lines differ from the way others would draw the lines – probably.
The question I wanted to answer was,
"If the lines were consistently applied to past price charts and that resulted in a given probability, could that probability be used to estimate future price action?"
Obviously, that information would be valuable.
I found many original students of Dr. Andrews who helped me extensively during my research. I submitted my original research/empirical study to Timothy Morge, an original student of Dr. Andrews and master Median Line trader.
Here is what Tim had to say,
“I eagerly hold you up as someone that “rolled
up their sleeves” and did their own work to look
under the hood and see if the stuff works or not.
Like me, you did your own statistics and proved
or disproved to yourself what worked or didn’t work.”
“I commend you on your work, as I have in the past.
And I would tell anyone that looks at any trading
method to do what you did: Study it, take it apart,
check it out systematically and figure out if it
has merit or is junk.”
~ Timothy Morge, Master Median Line Trader and Teacher
Traders are always looking for high probability, low risk entry techniques. The Median Line method offers an abundance of these opportunities. But how do you determine price is at a level that will have a high probability of offering such an opportunity? How do you find high probability areas to enter and a quality target to exit?
Does this Median Line method work? Are the claims Andrews made true?
I am a firm believer that the only way to truly understand and accept the claims of others is to prove it to yourself. I can tell you I have found that Andrews’ claim of price reaching the Median Line 80% of the time is true, but why should you believe me. Prove it to yourself!
“Finding High Probability Lines” is designed to do just that. The 74-page book lays out the framework to test the Median Line method in a simple and systematic way using just the Median Line itself.
In addition, the parallel lines that Andrews’ used are described in detail. The parallel lines often offer critical support/resistance levels when price passes through or returns from the traditional Median Line.
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Finding High Probability Lines
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TABLE OF CONTENTS
| Acknowledgements |
4 |
| Part I. Introduction |
5 |
|
History of the Median Line |
5 |
|
Why Study the Median Line? |
6 |
|
Determining the Basic Probabilities |
7 |
|
Requirements |
8 |
| Part II. TheMedian Line |
9 |
|
The Median Line - a Definition |
9 |
|
Defining Pivots and Trend Lines |
12 |
|
Median Lines as a Price Magnet |
16 |
|
Andrews' Median Line Observations |
17 |
| Part III. Price Action
NEAR the Median Line |
18 |
|
Price Reversal NEAR the Median Line |
20 |
|
Price Gap and Revisit NEAR the Median Line |
21 |
|
Price Plunge and Revisit NEAR the Median Line |
22 |
|
Price Consolidation NEAR the Median Line |
23 |
| Part IV. Price Failures |
24 |
| Part V. The Study |
26 |
|
Sample Size |
28 |
|
Conducting the Study |
29 |
|
Practice Chart |
45 |
| Part VI. Study Results,
Observations, and Conclusions |
47 |
|
Study Results |
47 |
|
The Trend Line Median Line |
50 |
|
Conclusions and Observations |
52 |
| Part VII. Adding the
Parallel Lines |
53 |
|
Median Line Parallels |
53 |
|
Sliding Parallels |
55 |
|
Warning Lines |
61 |
| Part VIII. The "Other"
Median Line |
63 |
| The Modified Schiff Median
Line |
63 |
| Part IX.
Expanding the Term "Pivot" |
65 |
| Part X.
Finding High Probability Lines |
67 |
| Which Pivots Do I Draw
From? |
67 |
| Turn Support/Resistance
Lines "At an Angle" |
71 |
| Putting it All Together |
72 |
| Part XI.
Summary |
74 |
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FREE Median Line Research e-book
As an added bonus, everyone that purchases the study guide will have the opportunity to download the research that started my study of the Median Line: "Using Median Lines As A Trading Tool - An Empirical Study: Grain Markets 1990 - 2005"
.
CLICK HERE TO ORDER AND
IMMEDIATELY DOWNLOAD FOR $69.95
“Finding High Probability Lines” and,
“Using Median Lines As A Trading Tool: An Empirical Study – Grain Markets 1990 – 2005"
Clickbank sells our products - they are a trusted online retailer specializing in digitally delivered products. Your credit card statement will list CLKBANK*COM as the retailer. Please follow the instructions closely as you will be led to a download page to retrieve the PDF file. Download time depends on your internet connection speed, but should be less than 20 seconds.
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