Trading with Median Lines: Mapping the Markets

A hard to find practical application of Andrew’s Pitchfork for trading the markets. The author is a practicing trader. Trading with Median Lines: Mapping the Markets is  The course walks through actual trades using Median Lines aka Andrew’s Pitchfork.

Introduction:

I have been trading commodities since the mid 1970’s. At that time, computers were cumbersome machines locked away in huge ventilated rooms in Universities and Corporations. Most people didn’t know much about them. The few people that had access to computers entered their questions by punching holes in thick paper cards and then waited while the computer churned and churned and then displayed their answer on a small green florescent screen . Computers were not used for graphing commodity charts or creating indicators for trading.

Commodity charting was done by hand. Or if you lived in Chicago or New York, you could buy a ‘chart book’ that came out weekly after Friday’s close; if you lived elsewhere, your copy arrived in the mail sometime Monday. Either way, you updated your charts using end of day data. The only ‘live’ real-time prices available in Chicago were the regular updates on Chicago’s channel 26, which carried intraday commodity shows sponsored by commodity brokers, or the regular agriculture quotes carried by WGN radio, which catered to all the farmers that were interested in hedging their hog or corn crops. I f you wanted to learn about trading, you went to one of the bookstores by the Chicago Mercantile Exchange or the Chicago Board of Trade. Or you went to Krochs and Brentanos main store under the train tracks in downtown Chicago.

Then you had to choose between books like “New Methods for Profit in the Stock Market,” by Garfield Drew or “Stock Market Profits,” by Richard Schabacker or “George Wollsten: Expert Stock Trader.” I f you dug a little deeper, you might find have found the many works by W. D. Gann or a book or two written by his disciples. You might have a book or two devoted to R. N . Elliott’s theory.

If you knew someone that traded for a living, they might have been willing to sell or loan you a mimeographed copy of The Wetsel Market Bureau’s “A Course in Trading.” And if you were really lucky, you might have known someone that subscribed to the weekly newsletter published by Dr. Alan Andrews or even get a second-hand copy of “The Foundation For Economic Stabilization Course” he published. Some of the pit traders in Chicago and New York flew down to Miami to learn directly from Dr. Andrews, so his work was well known within the close-knit pit trading circles.

Dr. Andrews came from a trading family. His father owned a brokerage house and traded for clients and his own account. The Andrews investment firm handled accounts for the Kennedy family and made them quite a large sum during and after the Great Depression. He sent his son, Alan , to enineering school at M. I .T. , and once Alan graduated, he told him it was “time to make some money. ” He challenged the younger Andrews to make one million dollars in one year, a task that he would not accomplish. It took him just over two years to make his first million dollars trading commodities!

Alan Andrews loved to learn and he attended many trading seminars or “social gatherings” as they were called. These were literally social events, where you were extended an invitation and after a speaker had given his presentation , refreshments were served and contacts were made. Dr. Andrews attended Roger Babson’s first “social gathering” and the two were good friends from that point forward. Later, at a “social gathering” hosted by Dr. Andrews, financial author Garfield Drew introduced George Marechal to Dr. Andrews, and so another good friendship was formed.

Fast forward to 2003: Real-time tick data streams into the homes of most traders. Literally all traders have powerful computers sitting on their desk. All these traders watch real-time updating intraday charts. The simple techniques pioneered and used so effectively in the Golden Era of Technical Analysis have been passed over for the use of complex indicators and systems. How can something so simple, something that can be hand drawn with a few pencil strokes possibly compete with computer-generated indicators?

I can only share with you what I know about these simple and effective tools. I , too, have powerful computers and real-time data feeds. But since I was first exposed to the original Action-Reaction course materials in the early 1980’s, I have found Median Lines to be the single most powerful tool in my trading tool kit.

I have maintained close relationships with other students of Dr. Andrews, as well as those that have taken these simple tools and remade them to fit their own style of trading. Make no mistake: In Trading with Median Lines, I am showing you how I use Median Lines.I have been an active professional trader for nearly thirty years and these are the tools I use every day in my own trading. And I have done my best here to show you how I use them. Trading with Median Lines is filled with charts, because Median Lines are best learned by seeing chart after chart, and then by drawing chart after chart.

Contents:

• 1. Introduction
• 2. Median Lines
• 3. Schiff Median Lines
• 4. Inside Median Lines
• 5. Gap Median Lines
• 6. Trade Examples: Using Median Lines
• 7. Warning Lines
• 8. Sliding Parallel Lines
• 9. Lines of Force: Proving the 80 Percent Rule
• 10. The Trend Test Barrier
• 11. Using the 0-4 Pivot Count to Anticipate Market Moves
• 12. Trade Examples: Combining the Count and Median Lines

Trading with Median Lines: Mapping the Markets By Timothy Morge PDF