Modified Bitcoin Chart Based on ItisCalvin's Chart
Was recently looking at the chart, "WHEN WILL WE BREAK 700?" by ItisCalvin and decided to make a few slight modifications based on a technique called the 50% Pitchfork as outlined by Patrick Mikula in his book, "The Best Trendline Methods of Alan Andrews and Five New Trendline Techniques.
I did this modification for a couple of reasons.
1) While using a modified Andrews' Pitchfork, I still feel that the pitchforks (there are two one on top of the other) conform a little more closely with the commonly accepted rules of what pitchforks are;
2) The pitchforks have a little less steep upward slope which I believe conforms more to the reality of the price action;
3) While I think the pitchfork drawn by ItisCalvin does a very good job reflecting the price pivots, I believe - in the longer run - these pitchforks will do an equal to better job while also potentially tipping us off to a price breakdown should the price drop below the lower parallel channel.
As stated earlier, the pitchfork used is a 50% pitchfork. The 50% pitchfork is used when the angle of the pitchfork is overly steep. You can read how that is determined in Mikula's book. Normally a pitchfork is drawn based on either athe high-low-high or the low-high-low price pivots. In this instance, the pitchfork is based on low-high-low - the low being $339.79. The 50% modification means instead of starting the pitchfork at $339.79 you take the mid-way point between the first point $339.79 and the second point of $548. That gives $443.89 as the starting point of our modified pitchfork.
After creating the first pitchfork, it was cloned (copied) and placed on top of the original pitchfork to give what you see in the chart. You'll notice that price pivots have conformed quite nicely with the red median lines of each pitchfork. Price recently bounced of the median-line of the lower pitchfork which signals we may be in for a re-test of the mid-$550 or below as the lower parallel channel is below $550.
I did this modification for a couple of reasons.
1) While using a modified Andrews' Pitchfork, I still feel that the pitchforks (there are two one on top of the other) conform a little more closely with the commonly accepted rules of what pitchforks are;
2) The pitchforks have a little less steep upward slope which I believe conforms more to the reality of the price action;
3) While I think the pitchfork drawn by ItisCalvin does a very good job reflecting the price pivots, I believe - in the longer run - these pitchforks will do an equal to better job while also potentially tipping us off to a price breakdown should the price drop below the lower parallel channel.
As stated earlier, the pitchfork used is a 50% pitchfork. The 50% pitchfork is used when the angle of the pitchfork is overly steep. You can read how that is determined in Mikula's book. Normally a pitchfork is drawn based on either athe high-low-high or the low-high-low price pivots. In this instance, the pitchfork is based on low-high-low - the low being $339.79. The 50% modification means instead of starting the pitchfork at $339.79 you take the mid-way point between the first point $339.79 and the second point of $548. That gives $443.89 as the starting point of our modified pitchfork.
After creating the first pitchfork, it was cloned (copied) and placed on top of the original pitchfork to give what you see in the chart. You'll notice that price pivots have conformed quite nicely with the red median lines of each pitchfork. Price recently bounced of the median-line of the lower pitchfork which signals we may be in for a re-test of the mid-$550 or below as the lower parallel channel is below $550.
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