In the previous Andrews Median Line post I described the various types of Median Line sets and the principles behind them. In this post, I will go over the 5 basic rules Andrews gave as to how price can interact with a Medina Line set. The rules apply to any Median Line set, in any instrument, and in any timeframe. It’s easy to get glazed over and get confused when looking at the original Andrews material but Iets look with some simple common sense and in the light of what buyers/sellers are doing.
There is a high probability that:
- Prices will reach the latest ML
- Prices will either reverse on meeting the ML or gap through it
- When prices pass through the ML, they will pull back to it
- When prices reverse before reaching the ML, leaving a “space”, they will move more in the opposite direction than when prices were rising toward the ML.
- Prices reverse at any ML or extension of a prior ML.