The First Five Rules
Alan Andrews had many rules and guidelines, but in his course, given under the auspices of his company named FFES (Foundation for Economic Stabilisation), the following five were stated right at the beginning.
Median lines (ML) can tell where the prices are headed, and the place they will reach, about 80% of the time, and when approximately that place will be reached. Slopes of alternate MLs of comparable length indicate the trend. 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.