£/$ You Know you have got it right when......

Here are two £/$ charts. Both on Metatrader. One daily and one 240min. Two different ML sets. Both showing inner lines and both showing reaction lines (BC parallels at distance of A to the middle of B/C). They all have other median lines running across the screen....usually from a higher timeframe and as you can see all these lines interact with price. However i am interested in these two charts with the Reaction lines (in red) as they provide advance warning of a possible price turn around. To me this is exactly the same as price walking into a brick wall !...looking back at some recent examples i can see reaction lines at many crucial reversals this week and as with my example this week on CHFJPY( see previous posts).Trades are possible but lower time frames (unless you want a stop so far from your entry that you can drive a bus between entry and stop) are more suitable. In the 240min Sterling$ chart you can see that price turns and runs out of energy at the exact intersection of the centre line and the reaction line. In the daily chart price finds support after a monster decline and reverses on the reaction line (although i have other MLs providing support here but these are omitted from this chart for the sake of clarity).





Whats happening with price here in the 240min chart does not mean that price will be held back and continue to fall...It may pop over the reaction line and start using it as support but the reaction line will continue to act on price until price/time pass away towards the next reaction line. Remember that there will be many ML sets in multiple TF's that are not drawn here that all have reaction lines and to draw them all on a single time frame would look like a birds nest..however i have individual charts for 30,60,240min and daily & weekly where i plot multiple ML's & reaction lines to provide an composite market map which can be used to identify possible reversal trade entry and exits areas. The bottom line here is that reaction lines offer you an advance warning of an area of higher probablilty reversal.


If anyone requires the free Metatrader custom indicator for drawing reaction lines( plus Schiff,Mod Schiff, innerlines,triggerlines etc) please ask.