| bearsbite - 6/25/2018 13:54
Despite my best efforts to understand pitchforks and countless hours spent watching Youtube videos, I still feel like you all are speaking a different language than what I understand. JP posted a soybean chart on the 21st and on that chart price had come down to check the top line of the fork. When I look at that fork it doesn't appear that any of the two lower lines have been checked at any time. If the line is never checked is it still a good fork to use? When I watch people drawing forks on youtube, they consistently talk about the necessity structure being taken out as confirmation of higher or lower prices to come. If the last low is taken out, and the structure is violated to the downside, does that mean gravity or the forces of nature take it down to $1.50 +/-? On the otherhand if the recent low holds and structure is taken out to the upside at $10.75 is it safe to say the big downsloper is no longer relevant in the near term and a new set of lines would be drawn? I understand that you don't just throw it away for longer term reference. Thanks
Hi bearsbite,
It is not necessary for the lower two lines to come into play for the fork to be valid, although your point is valid. If price never interacts with any of the parallels, the probabilities are still intact, but the frequency projected by the fork, maybe completely meaningless. But in the case of beans especially, with repetitive tests on the UML without ever testing the lower parallels, you can tell that the frequency is very active and will likely be a factor in the future, far past when price has left the fork behind. Most likely, the warning lines or sliding parallels carrying the same frequency will come into play in the future.
Structure is key, but the term gets kinda muddied up and overused IMHO. A level becomes a structural level when it is confirms by doing it job - i.e. a higher low's job, in a uptrend, is to make a higher high. Until it makes a higher high, it is not structural and it is NOT support. This is so simple yet almost nobody gets it. A deeper understanding of why a level is structural comes from the understanding that if a trend is to remain intact, the big players, whales or whomever, know that they are likely not going to be able to buy at the level of last time. So, they will have to move their buy orders up. By doing so, you can now lean on them, use the orders of the much bigger players to support you. Thus, your stops are way less likely to get picked off because you are using their orders to your advantage. Simply put, generally your stop got hit because you didn't have it behind a structural level and is instead behind a fib level, some fake structural level like an unconfirmed pivot or some other bogus level that these guys KNOW you use to hide your stops, and that is they trip your stop and it goes the opposite direction. Put it the right place and get taken out, you are likely wrong and you have been told so. Beyond that, there many structural formations in price, and there is the structure that is framed by the fork as well. So like I mentioned before, the term structure can mean many different things.
The broad answer to your other question, is it depends on the energy available. If the energy available can supply a move to 1.50, or 10.75, it is possible. If there isn't enough, the answer is no. Price will never go someplace it doesn't have the energy to go. No different than you, me, a ball, a car, a tractor, a space ship, a meteor, etc. There is another problem though. The median lines work generally are three dimensional lines. So let's say price does have the energy to go to 1.50, but there are other forces at work that can stall that movement. Price has the option of expending the energy on the "X" axis, or a combination of the 'X and Y' axis as well. So, you can have a formation that can go to 1.50 in one month or stay above say 2.75 and take 5 years to exhaust itself essentially going horizontal and the two moves exhausted the same energy. Hence the analogy we have used in the past of choosing between getting hit in the hand by a sledge hammer, or have it squeezed in a vice. One is over quickly, the other lasts much longer, and in the end, the energy expended is the same. So, the answer is really not a simple, cut and dried answer.
Hope that helps.
Take Care
Edited by J P 6/25/2018 17:24
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Chart Question From JP's 6/21 post
