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Market Geometry Institute

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Trading Experience: Intermediate
Platform: NinjaTrader
Broker/Data: Mirus/Zen-Fire
Favorite Futures: ES
Posts: 155 since Jun 2009
Thanks: 709 given, 175 received

Fat Tails View Post
Let us assume that the pitchfork was a precursor to linear regression channels. Below a document that focusses on Median Lines. On of the approaches promoted by the Market Geometry Institute. Judge yourself.

"The Median Line method appears to be a valid method of determining potential price action. Price returned to the Median Line 80% of the time as the method suggests. The most impressive outcome is the probabilities related to price cycling within the Median Line set. If the Median Line set describes price well, and price bounces off the Median Line and Median Line Parallels, high probability patterns appear. Although limitations exist with the method, the probabilities recorded demonstrate the usefulness of the method in determining potential price action. However, the study did not consider actual trade management including entries and exists. Actually trading the method is another endeavor in itself. The study does however suggest the Median Line method can give a trader an idea of the probability of price following a certain pattern given the proper conditions. It appears intuition and experience play a major role in the success of applying the method. It is unlikely an individual can pick up the basics of the method and immediately have success in trading. It appears, as with anything, practice and study are the keys to successfully applying the Median Line method to trading."

While these methods are tried and true and have a high probability of giving good followthrough, the challenge is still proper execution and trade management in real time.


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