When Prices Don’t Reach The Median Line…..
Traders familiar with Dr. Andrews’ Median Line Technique (Andrews Pitchfork) have probably read somewhere that he said prices tend to reach the latest median line about 80% of the time. “More often than not,” he wrote in his course material and newsletters to course members.
But what about the remaining 20% of the time? The chart below illustrates that instead of reaching the middle line of the pitchfork, (the median line) prices fell short of it, drifting roughly sideways instead. The steps Andrews followed in order to anticipate, confirm, and then act on what he termed a “Price Failure” are just a part of the unique studies he said he made almost daily. You’ll learn those steps as part of this course, plus many other supplementary techniques that helped him stay on the right side of the markets – techiniques he developed to help him arrive at trade decisions based on how he studied prices as they interacted with his various course lines.
During one of his seminars held in Miami for course members, Dr. Andrews said that each day, after the markets closed, he updated the prices on all of his charts.Then he reviewed and updated the various studies on each chart. While I was a course member of his, Dr. Andrews sent me charts that included his configuration rules for studies such as those above. His notes and drawings were done by hand on paper charts — personal computer charting wasn’t available in his day.
Most traders use computers now days to do their charting legwork and technical indicator studies. No question about it, the computer reigns in today’s trading. Several course graduates have written me though, saying that analyzing a printed out chart gives them a different perspective, and is well worth the task.
To learn the techniques Dr. Andrews used in his own trading:
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In Gordon’s words:
“When I first read about Dr. Andrews’ special methods for drawing lines on a price chart, I was not impressed. That was back in the late l970s. The flyer I read gave no clues about the techniques themselves; only that his methods were based on the Newtonian law of action and reaction. I mistakenly reduced that law to “what goes up must come down,” and decided to pass if that’s all there was to it. (I would later find out how hasty that judgment turned out to be.)
I often think about my intial reaction to that flyer. Those were the days when technical indicators were the tools of the discerning trader. Formula-based indicators such as RSI, Stochastics, Momentum, Rate of Change, etc. sprung to life in the heart of every chartist. Programmable calculators did the leg-work on the formulas, and some even had built-in routines that generated buy and sell signals. After years of burning the midnight oil poring over charts, trying to count waves, drawing trend lines, figuring out Fibonacci retracement levels, updating moving averages, and so on, the advent of computer-assisted analysis seemed the better way to go.
Then a commodity broker I worked with showed me the course material he’d ordered from Dr. Andrews. It had cost him $1500.00, which was no small sum in those days. He gave me several pages to look over, and it didn’t take me long to realize that Dr. Andrews’ price analysis techniques worked. “More often than not,” as he said at one of his seminars for course members..
While studying chart after chart, I noted that prices would time and again head for Dr. Andrews’ unique course lines. That convinced me to become a course member myself. I enrolled, attended several of his seminars, and subsequently used his methods for many years as a commodity broker. I also taught his introductory techniques as part of a community college ag-marketing course.
I’ve been using Dr. Andrews’ trading methods in my personal investment portfolio for over 30 years now. I can’t imagine trading without them.”