Constructing action-reaction lines from two pivots

Two recent pivots make the center line

A peak-to-low action-reaction layout starts by choosing two recent major pivots, one high and one low, and connecting them as the center line.

Those swing highs and swing lows are the pivot points used either to define the center line or, later, to project a parallel action line.

Earlier pivots project the parallel family

Action lines are drawn from earlier pivot points and kept parallel to that center line.

Each reaction line sits on the opposite side of the center line from its matching action line and at the same distance from the center line.

Babson action-reaction theory is the framing that a measured swing on one side of a pivot-defined center line is paired with a reaction of matching distance on the opposite side.

Use the finished set in a strong trend

During a strong trend, the completed peak-to-low line set is used to mark where additional positions may be considered.

Consecutive reaction-line crossings

Crossing two reaction lines in succession with no retracement back to the first line is treated as an entry in the direction of the break. That archive reading is the consecutive-reaction-break.

In the consecutive-break illustrations, price clears the first reaction line, reaches the second without returning to the first, and a break of the second line is read as a short entry.

Return to a reaction line

After price crosses a reaction line, a later retrace toward that line followed by resumption of the prior direction is treated as an entry in the resumed direction.

A several-day stay beyond a reaction line followed by a return to that line is illustrated as a short in one case and as a long in the remaining cases. That stay-then-retrace reading is the return-to-reaction-line.