The Trading Techniques of Dr. Alan Andrews Market Geometer and Inventor of the Andrews Pitchfork

It is to Dr. Alan Andrews that we must look to gain a better understanding of the practical forecasting applications of Roger Babson’s Newtonian theories.

Andrews was a famous technical analyst who developed a series of techniques based upon this technology that is to this day, considered to be some of the very best geometrical tools every developed for analyzing and trading the markets. We publish a collection of Dr. Andrew’s original writings, keeping them available for the appreciation of analysis of our modern era.

Andrews on Forecasting the Future

Andrews said of prospect of forecasting future events:

“The old Romans were wise enough to know that things change and fluctuate. They therefore recognized that the best way to know what would probably happen in the future was to study how changes took place in the past. To symbolize this, their two headed Janus was their chief deity with one head confidently looking to the future as the other head had studied the past.

“Of the two kinds of change in the Universe, flowing change and random change, we are indebted to Newton’s invention of the Calculus that enables us to find out in advance the conditions that flowing change will produce in the future. His discovery of the natural law that Action and Reaction are equal and opposite in the field of physics also has been applied in the Course to the random changes of price movements in free markets. This application of the Action-Reaction law enables you to learn in advance where the probable reversals of price trends will come in the future. We owe this application to the late Roger Babson, who credited this law as the basis for his fortune of over $50,000,000.”

“When we speak of any scientific law, we mean a statement that a relationship has been observed among certain given conditions. We mean ‘if these conditions now, then those conditions will follow, and can be expressed mathematically’. We have ‘order’ through which we can know the outcome from these conditions. We can therefore take advantage of this knowledge, and thereby progress and profit.

“So Newton was one of the great discoverers of this ‘orderliness’ that underlies all of the Creator’s work, even if we are often slow in discovering it. Newton’s Laws therefore as stated above, have benefited the users in both flowing and random changes. The definition of randomness implies that future conditions are unascertainable, because there seems to be a lack of order underlying such change. Such has been the almost universal belief, still prevalent with most people as far as price prediction is concerned.

“The great Helmholtz wrote, ‘Of all branches of human knowledge there is none like geometry. It escapes the tedious and troublesome task of collecting experimental facts. The sole form of its scientific method is deduction’. You have noticed that the morphological approach used in this Course employs simple geometry.”

Alan Andrew’s Interpretation of the Babson Normal Line

In Andrew’s interpretation of Babson, he demonstrated how using Babson’s Normal Line, which he renamed the “Median Line”, one could then geometrically construct projections of future swings and turns using the relationships from the past, as is shown on the following market chart:

A diagram of Alan Andrews’ “Median Line”

It can be seen that there is a central axis, or “median line” drawn through the market action according to precise specifications (upward pointing) and from there, each prior significant swing point is marked 1A, 2A, 3A, 4A, 5A (Action) on the declining market from the top.

Using the center as an axis a similar line is not projected on the mirror side of the axis with the same proportional distance from the center axis, 1R, 2R, 3R, 4R, 5R, (Reaction) and when these lines are extended out into the future, it will be seen that they define future pivot points or support points for the market.

A second downward pointing a series of lines shooting downwards from the top demonstrate the same phenomenon but on a different axis and counting out to 10 further iterations in the future, reflecting back to market data before the range of this chart.

These examples serve to clearly show the geometrical structure inherent within the financial markets and the relationship between past and future price action. These principles are based upon mathematical laws of physics and geometry, and are undeniable to any logical mind, who takes the time to study the principles in order to “SEE” this order behind the markets.

As Dr. Andrews stated:

“Lack of faith, inability or unwillingness to believe, a search for reasons why to avoid taking action seems to be the reasons that more people failed to avail themselves of the hundreds of percent profits they should have been making… For once you understand how you can apply this Rule to make money for yourself, you are on the road to an independent fortune of your own. Colleges have endeavored to impart the essential knowledge for you to qualify for a profession or job through which you may make a living. But do you know of any college that has given any courses on how to actually make money?”

Next Page

Related Pages