股票期货突破技术分析(英文原版)-第4章
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the work。remain proprietary and not accessible in a public。medium； but some of the main principles。and underlying concepts； as well as。their application to the long…term Forex markets； are free to be discussed in forums。such as。this。chapter。
The methodology hase to be known as。Drummond Geometry and consists。of three main elements； or ponents：
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The identification of resistance and support and their projection into the future
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A description of the markets。current state and its next anticipated state
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Multiple time period analysis； coordinating the first two elements in two； three； four； or more time frames。
In Drummond Geometry； these three elements。are bined into a coherent whole with specific。rides。for entries。and exits； a methodology for monitoring and evaluating market moves； and a way to project viable turning points。and targets。within each time frame。
Projecting Resistance and Support
The idea of resistance and support is。a key concept of technical analysis。 Resistance is。when buying peters。out and selling increases； stopping and reversing an upward move； support is。the reverse； when selling abates。and buying begins； forcing price upward。 Conventional technical analysis。looks。backward at where resistance and support have been located in the past and suggests。that the same levels。will be used in the future。
Drummond Geometry takes。a different approach。 Although it constructs。these levels。out of conventional tools。such as。moving averages。and trend lines； it projectsnstantly。evolving resistance and support areas。into the future and watches。how price reacts。to these levels。as。the market moves。forward。
The core building block。of Drummond Geometry is。a short…term moving average called 〃the PLdot〃 （see Figure 1。1）。 The PLdot was。developed in response to the search for a tool that would distinguish between trend and congestion and run in a straight line sloped upward or downward in a trend but that would quickly and responsively indicate changes。in market situation。 The tool was。empirically derived； and investigations。resulted in the moving average known as。the 〃Drummond Dot；〃 or the PLdot。
The PLdot （PL stands for point and line） is。a short…term moving average based on three price bars。of data； which captures。the trend/nontrend activity。of the time frame that is。being charted。 The PLdot from the last three bars。is。plotted as。a dot； or line； on the space where the next bar will appear。
The PLdot has。a simple formula： the average of the average of the high； low； and close of the last three bars。
｛Avg＇H（1）；L（1）；C（1）＇ ＋ Avg＇H（2）；L（2）；C（2）＇ ＋ Avg＇H（3）；L（3）；C（3）＇） PLdot =——————————————————————————————— 3
The PLdot can be applied to any chart of any modity； future； or stock。 The first thing to note is。that the dot is。always。there。 It is。a polestar in a constantly shifting universe； something that bears。a constant relationship with the immediate past； capturing the recent energy of the hour； of the day； or of whatever period the trader is。looking at。
What is。so special about this。particular moving average； the PLdot； that sets。it apart from other moving averages？ The characteristics。of the dot prove to be useful in analysis。 It moves。across。the chart horizontally in congestion； and when a trend develops； it immediately changes。into a straight line slanted in the direction of the trend with very little lag。 It is。extraordinarily。sensitive to trending markets； very quick。to register the change of a market out of congestion into trend and sensitive to a trend that is。ending； as。well。
The PLdot captures。the heart of market activity on the last three bars。 In Drummond Geometry； this。point would be thought of as。the center of energy and represents。the consensus。of the crowd。 But additional tools。are needed to gauge the strength of moves away from thisnsensus。 For this； other moving averages。are added。 To give the methodology greater muscle。 Drummond added a simple envelope system constructed of a constant mathematical relationship based on the ponents。of the dot。 The resulting structure is。illustrated in Figure 1。2。
Unlike many envelope systems； the objective here is not to contain all price activity within the envelope but to offer a constant； or a matrix； against which market moves。can be measured。 This。turns。out to be of great value when trying to tailor trading techniques。to different market conditions。
The envelope system is。also useful as a constant against which to measure the strength of recent and current market energy。 When the market is。in congestion； price tends to oscillate from one side of the envelope to another； thus； the trader has。a pretty good idea of where the buying and1 selling /ones。will be placed in the market。 But when the market is。in a strong trend； the envelope functions。differently。 The PLdot can be seen as。〃pushing〃 price in a trend； and the envelope top or bottom will be broken in the direction of the trend； with price bats。often closing outside the envelope； and the envelope itself functioning as。support or resistance。 Price retracements。in a trend will not move to the opposite side of the envelope but instead lend to stop at the level of the PLdot。 In a strong trend； the bars。will close outside of the envelope until the trend pauses。or has。finished； at which point they will move back inside the envelope。
Both the PLdot and the envelope are useful elements in determining support and resistance levels； but by themselves。they are not sufficient。 To these elements； Drummond analysis。adds。a series。of short…term； two…bar trend lines。that flag areas。where price is。likely。to terminate。 In the full methodology； there are a significant number of these lines； here just a few are shown。
In Figure 1。3； we can see how these short…term trend linesntribute to the definition of nearby support and resistance arras。（shown by a gray box） and the further out support and resistance areas。（shown by a black…outlined box）。 Note also that these lines； along with the PLdot and the envelope； are projected into the near…term future； so that the trader always。knows where the support and resistance areas are that the market is。moving into。 The trader does。not focus。on areas。that existed in the past but is。always。oriented toward the developing future。
If we apply these elements。to a chart； we see the full envelope system together with the support and resistance zones。established by the envelope； the dot； and the short…term trend lines； with these tools。all projected into the future； onto the bar that has。not yet formed。 This。setup constitutes the basic。chart framework for any single time frame in Drummond Geometry。 In Figure 1。4 we can see this。full set of tools。applied to a chart。 Note the resistance and support areas plotted on top of each bar； along with the envelope and the PLdot。 The price bars。are plotted using a heavyweight “fat〃 bar so that the resistance and support tools。can be plotted on top of them without obliterating the price bars。themselves。 The critical point is。that these elements。are projected forward into the future so that the trader always sees。them ing up at him； on the right…hand side of the chart as。time ticks。forward and market activity unfolds。
Now let's。stop and consider these few ponents。of the first major section of Drummond Geometry。 We have the definition of support and resistance； we have a means of monitoring market energy （placement and movement within and outside of the envelope system）； a means。of determining current market direction and future shifts。in that direction （dot direction and slope）； and a means。of determining where price energy will terminate （where price is。likely to stop for a given bar）。 All of these elements。are extremely valuable to the trader。 But as。helpful as。these tools。are； by themselves。they are not enough for success。
Predicting the State of the Market
Now let's。look。at the second leg of this。three…legged stool。 We need to know what the market is。doing now； and we need to know what we expect the market to do next。 We need to understand and predict the “state” of the market。
In essence； we must establish the market's internal decision…making tree for possible future actions。 It'
