Methods to Draw Pitchforks

1. Tim’s pivot method - normal change in behaviour will cause this

2. Unusual pivot method - abnormal moves like spike, breakouts, unavailability of

pivots, suspended pivots, anchor pivots etc will cause this

3. Fischer Pivot to Pivot method - make consecutive forks and find good CZ to trade and
continue to make new forks.

4. Coghlan method - find out best slope and sliding parallels. Strongest to
weakest lines must be drawn colour coded.

5. Andrew P1-P2 bisect method - bisect every new p1-p2 line and draw fork

6. Widest pivot method - choosing far off P0 and bisecting current P1-P2 line

7. Gaps based pivot method - use gaps as pivots.

8. Pivot counting method - draw new forks based on previous pivot counts and
anticipating location of new pivots on CZ points.

Foundations of Pitchfork Drawing

1. Choosing Centre Line (CL) - Select that line as CL which has maximum number of
touch points or Multiple Pivot Line (MPL)
2. Identify the Slope/Floor/Ceiling -
3. Select P1 – P2 Pivots - Once 0-CL is selected now choose 2 new set of AR
Lines or UML/LML
4. Start Pivot Counting - Once new fork is ready start counting pivots either
based on Andrews or Elliot method to anticipate further pivots, to understand any change in
behaviour or to gauge reversals
5. Draw Trend Test Barrier Line (0-4) - Once pivot counting is done and P4 identified draw
0-4 trend line. You can use fibonaaci, moving averages or Elliot labelling to increase the true
potential or validity of 0-4 line. Note that in trending markets this 0-4 line will be respected
6. Draw SP - Most of the time we need to draw SP to adjust the
Fork to noise/spikes in the system
7. Validation of Fork -
8. Gauge Energy Levels/Phase - Energy levels can be gauged by using Runner theory,
it will help in anticipating further Pivot locations. While energy phase will tell if it is in energy
restoring or exhaustion phase.
9. Best Trade Location - Once fork is established identify best trade location
10. If 0-4 Line is Invalidated -
11. If 0-4 Line is Respected -
 Identify if there is any Andrew PF Setups like rolling chop,zoom,etc.
Check for Expaning Pivots; EP/IEP/SEP & Wolfe waves
Identify Energy Point Zones
See if energy coiling happening or not?
Energy Coiling Zone (ECZ)
Energy Point Zone (EPZ)
Play Rolling Chop at ML in style with Fail better pattern
Always use opposite PF and play according to confluence points
Remember the Runner concept to gauge energy levels and phases of
energy
Notice Flush Points at floor/ceiling for reeversals
Fischer forks will work best at Tops/Bottoms if they are logically
identified

Be alert to change in behaviour/context

Current Slope - Bullish / Bearish
Swing High-Low breached or continuing
Just Pullback or Change in behaviour
Andrwes + Schiff median lines
Note Fib retracements + Swing concept + EP + Energy Levels like Runner + Validation
Wait for pullbacks to enter then Trail
12.

Insights or Rules
1. Choose the widest possible Pivots to give sustainable angles to the fork
2. Move to new pitchfork only when new Pivot is created.
3. Once new pivot is created – there is a change in behaviour and can draw new fork
4. If new pivot is steep – then select previous swing point which occurs before the top/bottom
swing point as 0-CL and draw the fork. Once prices spike it will normalise to fall on ML or
LML.
5. Draw Reaction Lines to gauge/forecast reversals Time-Wise to give you an edge
6. Bisection of every new P1-P2 line from widest possible P0 upon validation of new swing
high/low pivot creation and post validity of this new fork will give more accurate pitchfork
projections of future.
7. Hagopian Principle – If breaks current fork then price shall reach P0-P4 Line – But most
recent pivot must be broken to initiate a confirmed counter trend move.
8. The only true method to identify current slope of market is trend of Pivot Points. In range
bound markets it will be boxed type. In trending markets it will be higher highs and higher
lows for most of the time and vice versa for sometime to cause corrections. During some
kind of pattern formation like triangle, wedge, diamond etc gauging slope using only pivots
will be loss making efforts hence using Bollinger bands and current existing insights would be
more useful
9. Failures - Any kind of failure for example failed breakout of any kind, failed dip
below averages, hagopian, failed trendlines etc. Will result in much faster move towards
opposite side.
 10. Patterns – If price zooms through ML and hold the retest of ML it will 90% of the time reach
UML. And if it halts there and reverse then 90% of the time it will reach ML again

Prices failing to reach ML will pull back to 1st warning line mostly.

Rule for anticipating major P's. If after a decline you can count four previous P's, the fifth one
is highly probable to be the one from which a new trend starts.

Rule for easily detecting the major P from which you can make a quick, big profit is to watch
for the EP , IEP and SEP formations.

PITCHFORK TOOLS FOR VALIDATION

1. Swing High – Low

2. Mirror Bars
3. Wide Range Bar
4. Separation Technique
5. Energy Coils & Energy Points
6. Behaviour of LEO (Limit Entry Orders) & SLO (Stop Loss Orders)
7. Exhaustion Zones
8. Price Action

James16’s Price Action

2 Consecutive Matching Lows
-Trend Continuation Breakout
-Must be within 2 pips
-More matching lows = More powerful

Double Bar Low W/ Higher Close DBLHC TBLHC

-more low bars = stronger signal

Bullish Outside Vertical Bars BUOVB BEOVB

-Trend Continuation Breakout
-Second Bar totally encompasses the prior
bar with a higher close
Pin Bar
-Right eye should be within range of left eye

*If a bar closes within 10% from its high/low in higher timeframes such as the daily, it normally is to
continue.

In this forum we look for certain bar setups which include:

Inside bars
Pin bars
Bullish outside vertical bars
Bearish outside vertical bars
Two bar matching lows with second bar making a higher close
Two bar matching highs with second bar making a lower close

Once we see this bar setup we look for areas of confluence which is where two or more of the
following are at/around the bar setup:

Ema's (there are many but the 150 and 365 are very popular)
Fibonacci levels
Support/Resistance pivots
Pivot point calculations
Swing lows/highs
Trend Lines

RULES & WISDOMS FOR TRADING

Trading Lessons Learned by Factor During the Years

 Except for a few tremendously gifted traders (not including me), day trading is generally
a loser’s game
  Trades decided upon at a moment in time during active market hours have contributed
negatively to my net bottom line
 Managing my emotions (fear, greed, false hope) is my primary challenge in trading
 It is better to miss a trade all together than to be obsessed about being in a certain
market
 I do not need to recover losses from the same market. A given market owes me
nothing.
 No tolerance should be given to breakouts that are not decisive or to trades in the red;
Agonizing patience should be given to trades that remain in the black – providing these
trades plenty of leeway to reach their targets.
 My focus needs to remain the search for the 20 or so of the best examples of classical
charting principles each year, with the goal of successfully trading the majority of these
market situations.
 The trading plan will be profitable in about 35% of trading events over an extended
period of time. However, over shorter periods of time the plan may be profitable in as
few as 15% of trading events.
 Expect the bottom line over an extended time frame to be represented by only 10% of
all trades. The other 90% of trades will be washes.
 There will be losing trades, losing weeks, losing months, and very unfortunately, even
losing years.
 Every year will experience a drawdown of 10% of assets. Many years will encounter a
drawdown of 15% of assets.
 Most chart patterns, especially those of shorter duration (less than 8 to 10 weeks),
completely fail or morph into larger chart construction.
 Being profitable over an extended period of time is far more important than being right
on the next trade or series of trading events – consistently following a sound trading
plan is not measured by the results of any given trade or series of trades.
 An emphasis on sound (in fact, ruthless) risk management protocols with the faith that
preserving trading assets is a prerequisite to be positioned for long-term profitability. A
trader’s pile of chips needs to be protected as a first priority.
 Severe drawdowns are very difficult to overcome. A trader should never be more than
one to three fully leveraged good trades away from new capital highs.
 I need to retain an intentional alertness for a few trading events per year (two or three)
that are characterized by multiple technical confirmations (the stars becoming aligned)
and a low risk entry point where extraordinary leverage can be employed with only
marginally greater risk
 A difficult but necessary component for success is an extreme amount of patience,
waiting and waiting for a pattern to become fully mature – and then the discipline to pull
the trigger with an appropriate amount of leverage.
 A sum of profits or certain rate-of-return is not a legitimate goal in trading. Rather, the
goal must be to properly execute clearly understood strategic and tactic maneuvers.
Control the controllable, let go of the uncontrollable!
 Failure to achieve the above will happen. A trader needs to have the ability for
immediate self-forgiveness when getting off the script, realizing that a focus on
past/recent mistakes can lead to a vicious cycle.

STOCKBEE NOTE’S

Besides that you need conceptual clarity on following things:

EPS: What is is and how it is calculated and manipulated. What
drives EPS growth.
Sales: What is sales . What drives sales growth.
Float:What is float. Why is it important.
Growth: What is a growth stock
Turnaround: What is a turnaround stock
Funds ownership: What drives fund buying
Neglect: what is neglect and why it is important
Value: what is a value stock
New Growth: what is a new to market growth
Old growth: What is old (known) growth story
Margin: what is margin and what drives margin
Cyclical growth: what are cyclical industries and what is cyclical growth
Earnings cycle: what is earnings cycle
Earnings momentum: what is earnings momentum

If you can explain these things to 10 year kid then you have conceptual clarity.

How to find stocks likely to go up a lot

Big earnings explosions create big trends. Doubling of earnings is good but the
stocks which really make big monster move have huge earnings and sales.

For example if you have Dailygraphs subscription look at the yearly earnings
growth trend table on weekly tab (it gives you yearly earnings and price high and
low range for the year) for following stocks:

NTRI: between 2004 and 2005 the earnings jumped from 3 cents to 59 cents.
That is monster earnings growth. What happened price of the stock went up from
1 dollar to [Link] at the sequence of earnings before that . For 2002 it was 8
cents, for 2003 it was 3 cents , for 2004 it was 3 cents and then the explosion
happen.
GMXR: Between 2004 and 2005 earnings went up from 19 cents to 79 cents as a
result price went up from 6 to 42.
MT: 2002 earnings was 40 cents. 2003 was 1.83 dollar and 2004 was 7.31. What
happened price went up from 1 dollar to 42 (actually it was below 1 dollar when I
first found EP on this stock but IBD rounds it to 1 dollar)
SINA: in 2002 had 3 cent loss. In 2003 had 75 cents earnings. Stock went up
from 1 to 46. This was the best performing stock in first phase of 2003 bull
market.
SOHU: 3 cents loss in 2002. 81 cents profit in 2003. Price went up from few
pennies to 43 in one year.
MICC: earnings went up from loss of 5.90usd in 2002 to 2.26 profit in 2003,
stock price zoomed from 1 dollar to 20 dollar.
FSLR: from 2006 to 2007 earnings went up from 6 cents to 1.43 dollar. Price
went up ten times from 27 to 283

and I can go on and on. Many of the mortgage stocks which were the biggest
winner in 2003 bull market first phase had earnings growth of 500% plus. All of
them have gone bankrupt now. But they made 1000% plus price moves in few
quarters because of explosive earnings.

Those are the kind of stocks one should look for if you are looking for explosive
gains. All the above stocks were unknown , neglected stocks , before they were
noticed by market because of their explosive earnings growth. In current market
some of those kind of stocks with explosive earnings have started to move now.

You can spend lot of time drawing trend lines, support and fib extensions, or
looking for value stocks and cigarette stubs and turnaround situation or search
for macro theme, or latest charting techniques or exotic Japanese charting
technique, or listening to Crammer, but none of that stuff matters.

If you see the history of stock market for 100 year or more there is one simple
thing you will learn, explosive earnings growth leads to explosive price moves.
Earnings or expectations of future earnings is what drives stock prices in the long
run.