Action Reaction Course 4

FFES CASE STUDY COURSE RULES

Median lines and MLH: the MLs 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. Slopes of alternate MLs of comparable length indicate the trend.

When both recent MLs slope in the same direction the trend is strong and price change rapid. A reverse ML is formed when 1ML2-3 is exactly reached at P4, and is a reliable CL for applying the AR method.

There is a high probability that:

prices will reach the latest ML
prices will either reverse on meeting the ML or gap through it
when prices pass through the ML, they will pull back to it
when prices reverse before reaching the ML, leaving a “space”, they will move more in the opposite direction than when prices were rising toward the ML.
Prices reverse at any ML or extension of a prior ML.

Frequently, after crossing a lower MLH, prices continue to rise along the MLH before the further drop that was signaled by passing through. So here you can use a sliding parallel through the bottom of the range of the most recent day as a sell signal if prices drop through that SH.

MLH are places beyond which each day you place a buy or sell order before the market opens the next day if prices pass through that MLH. MLs between P2 and P3 can start from nearby or more remote P1s, and prices tend to reverse at each of these MLs. The distance of each MLH from its ML is the distance of the next warning line (WL) from that MLH. When a second “space” reversal negates a previous one, there has been a “shake out” that signals a larger move in the opposite direction.

Mini median lines (MMLH): Use the MMLH as the buy/signal when you expect a reversal because of a P5, or because prices are at an RL, WL, major ML extension, etc. Also use MMLH as a stop loss right after entry.

If prices cross an MMLH and then move along it, enter when prices reverse by use of an SH.

In some markets drawing MMLH from end of ranges is best to reduce whip-saws, but use closes to draw these MMLHs between usually.

Converging lines that meet prices have high probability of trend reversal.

MMLH lines can be drawn through the daily range after a gap.

Two to four days is usually a maximum between 2 and 3 for an MML. P1 can be 1 day or more back from 2 and 3.

ACTION/REACTION are equal and opposite:

CL can be 0-3.0-4, Reverse ML, MPL, 2G, MA, MA Channel Line, 2P, Peak to Low, Low to Peak etc.

Normally use a down sloping R line to call a sell point, with A line measured through a bottom. Exception: still using Dt R line to call the sell point, when CL is a 0-3, the top seems to work for the A distance, as well as the bottom.

When prices pass through R lines, it often drop back as with MLs that are passed by prices, but signals probability of further move in direction before the pull-back.

Since each gap is 2 Ps they can be used for A points. When MA is used for CL, use closes for measurement above and below MA. Hagopian’s Rule applies to R lines. The longer the CL the more reliable it seems.

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