Category Archives: 20 minutes charts

GBPNZD 20 minute – Smaller Timeframe

I have received an email noting that I concentrate on timeframes longer than 60 minutes and asking if Median Line Analysis can be used on shorter charts such as the 20 minute. The answer is that it is applicable to any timeframe from Weekly down to tick charts, but with the volatility (and consequent potential for large gains) that we see on the Cross Pairs, I tend to look at 60 minutes or above.

Chart 1:

gbpnzd-20-chart1

To show how one could use the methodology on a 20 minute chart let’s have a look at Chart 1 which shows the GBPNZD. No matter the timeframe, what we are looking to do is to quickly establish the path of price and then to delineate the angle of ascent or descent by means of a pitchfork. I am always looking for distinct A, B and Cs in order to use as pivots and in this case the pitchfork variant that works best – or best describes the path of price – is one known as a Modified Schiff. The point of origin of the pitchfork is moved 50% in both time and price from the A pivot towards the B pivot.

Whether or not the pitchfork is valid, ie correctly describing the path of price, comes from activity along its angle of ascent or descent. In this case the angle of ascent clearly matches what we are seeing. For example, the first two red arrows show support along the line of the lower Quartile and the second two red arrows show resistance along the line of the upper Quartile. Clearly the lines of the fork are describing supports and resistances and it now remains to track the strengthening and weakening of trend along the defined angle.

Chart 2:

gbpnzd-20-chart2

As time moves on, note how price falls to the red circled Sliding Parallel just above the Lower Parallel. This can be seen in more detail in Chart 2 where the puce line shows the exact double tap on the lowest level we reach in the fork. Until the second touch we would not know that this was indeed a Sliding Parallel – it was a level we would be watching because we had found support there once before but until a second touch it had not been “proven”. Note also the slightly higher green Sliding Parallel – again a double tap on the line drawn in the angle of the pitchfork.

Chart 3:

gbpnzd-20-chart3

Chart 3 shows the way price moved up and away from the area of the Lower Parallel before running into anticipated resistance and falling back once more. not only did we find resistance along the Median Line but at the exact point at which it met the green line of resistance across prior highs. A trader taking a long form the lowest Sliding Parallel at 1.9486 would probably have closed their position at about 1.9598 where these two potential resistances coincided.

Since then price has retraced somewhat; in terms of this fork we are seeing a lowering of resistance – from the arrowed upper Quartile to the Median Line. We will watch to see if trend strengthens or weakens by watching if support now steps up or down along the angle of the pitchfork and whether resistance also continues to lower or not. I hope that I have shown how the methodology can be used on 20 minute timeframes and how by defining the path of price at an early stage we can look to high probability areas of support and resistance.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

As Requested – CADJPY 20 min

I received an email over the weekend asking me to have a quick look at the CADJPY chart on a 20 minute basis. Although this is not one of the dozen or so pairs that the Cross Pair Analysis service covers on a daily basis we do follow it intermittently and my charts are available to members to download whenever they wish.

cadjpy 20 minutes chart 1

Looking at the vehicle, there were two things that initially stood out to me and I have marked them on Chart 1. Firstly the ascending lows as shown by the thick green line and, secondly, the little push above purple horizontal resistance shown in the green circle. (The purple circle shows the point from which I measured this horizontal resistance.)

Remember that this is only a 20 minute chart and needs to be viewed in the context of larger timeframes. However, putting the two factors mentioned above together it was worth looking at the pair to see if we could find the ascending path of price that it was following.

cadjpy 20 minutes chart 2

Using the distinct A,B and C pivots I drew the Modified Schiff pitchfork shown in Chart 2. To draw this particular type of pitchfork we move the point of origin 50% of the distance between the A pivot and the B pivot both in terms of time and price. This gives us an angle of ascent less steep than that of an Andrews’ pitchfork and in this case to my mind better defines the move that we are seeing.

Of course we need to look to validate the pitchfork – to prove that it is indeed showing us the all-important path of price – and we do this by looking for activity along the angle of the fork. On this occasion I noted the circled areas of support along the Median Line and at the Lower Quartile as well as the touch and rejection at the Outer Quartile on April 16th. I am not bothered that price moves in or out of the strict confines of the fork itself – I am looking to see whether I have successfully defined the movement of price by means of the lines drawn.

The continued action along the lines of the fork as shown by the red arrows leads me to think that this has been done. The down arrows show resistance in the line of the fork at the Upper Parallel and the up arrows show support along the Median Line. We appear to be currently moving in a channel defined by the green lines and I will continue to watch this to see whether trend weakens or strengthens along this defined path.

Please remember that this is only a 20 min chart, but the principles that I have tried to apply here can be used across all timeframes and all vehicles. The Cross Pair Analysis uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

If you would like to find out more about our analysis or services please follow the link:
https://www.coghlancapital.com/signup

I recently hosted a webinar looking at non-dollar forex pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018

As Requested – AUDCAD 20 min

I have received an email asking if I would have a look at the AUDCAD 20 minute chart – one of the pairs that we cover in the Cross Pairs Analysis service – and I am happy to do so. The bigger picture shows that the vehicle has been moving to the upside but is in an area on both the Weekly and Daily charts where we might anticipate some resistance.

By taking it down to the 20 minutes as shown in Chart 1 we can see the effect of this potential resistance in a shorter timeframe. In Median Line Analysis we are looking to establish the path of price and to then track by means of the parallel lines of a pitchfork. Finding this path at an early stage is obviously advantageous so we try to validate the angle that we are following as quickly as possible. We do this by watching to see if price is acting and reacting to the lines we have drawn – here that is clearly the case as can be seen from the series of red circles. They show a line of support establishing itself along the dashed lower Quartile and a line of resistance forming along the line of the upper Quartile.

Chart 1.

audcad-20min

Once we are happy that we have defined the all-important path of price we then look to see if the trend is strengthening or weakening along this channel or, more precisely, this series of channels. In this case the trend weakened from resistance at the last red circle and support did not show itself until the Sliding Parallel marked by the first red arrow. Note how I am not concerned by the fact that this is outside the main lines of the fork – all I am watching is the angle of ascent.

If we follow price forward we see that support has “stepped up” from the Sliding Parallel to the Outer Quartile – the second red arrow. A strong bar from here initially finds resistance at the Median Line before topping out once more in the first green circle at the prior resistance of the upper Quartile.

Twice more price falls to the support marked with red arrows along the outer Quartile – support is constant in the line of the fork. However the resistance that I mentioned at the start of this article is apparent in the lowering of resistance in terms of the fork as shown by the series of green circles. From the upper Quartile it has lowered to the Median Line and from there to the Lower Quartile. As happens on the horizontal, when we see resistance lowering we are aware of the possibility of support lowering too.

To date support has been constant along the outer Quartile but the lowering of resistance makes me somewhat wary. Price seems to be currently finding some difficulty getting above the Lower Parallel of the fork, and if this continues it will be a further lowering of the resistance that we have noted. I will watch to see if this indeed occurs as well as monitoring the noted support. If price should push above the Lower Parallel I will look to see if it can at least reach the prior resistance of the lower Quartile as shown in the last green circle.

I hope that I have shown how we monitor the strengthening and weakening of trend along the pitchfork – how the same principles that are used on the horizontal can be used along the angle of the pitchfork. Median Line Analysis allows us to predict likely areas of support and resistance with great accuracy across different vehicles and varying timeframes. The Cross Pair Analysis covers a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and a detail via 240, 60 and 20 min ones.

If you would like to find out more about our analysis or services please follow the link:
https://www.coghlancapital.com/signup

I recently hosted a webinar looking at non-dollar forex pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018