Dr.

Andrews' Rules 1 through 8

This lesson covers course rules and significant observations as taught by Dr. An
drews in his original trading course. The rules are those that he used in his ow
n trading, and are provided to serve as a checklist for use with the course trad
ing methods you've learned.
Rule #1. Where prices are always headed Rule. You course members are among the f
ortunate few to be able to draw a straight line and know that prices are headed
toward that ML. Very few investors have ever applied this ML principle of statis
tics to price fluctuations, and we've never seen this in any books on investment
. You are among the very few who know that prices are always headed toward the n
ewest ML.
Rule #2. When a stock or commodity trades in a sideways channel after forming a
P3, the probabilities are high that the breakout will be in the same direction p
rices were moving prior to the formation of the channel.
Rule #3. "Turn your mind about," or "Rethink, for all good is at hand." We shoul
d mentally prepare ourselves for the coming reversal in prices, and other affair
s. Here's one way for example, that you course members who know the ML rules can
use: When prices are skyrocketing upward, we do this preparation by thinking "I
f prices pivoted here today at this price, I'd draw a new ML bisecting the dista
nce between todays price and the price from which the rise started." And we know
now that if this is a Major Pivot, prices will fall rapidly to this new ML. Pro
fits from such drops are big and quick.
Rule #4. Rule for anticipating major P's. If, during a rally or decline, you can
count four previous significant P's, the fifth one is highly probable to be the
one from which a new trend starts.
Rule #5. Rule for easily detecting the major reversal P from which you can make
a quick, big profit is to watch for the EP formations at probable P5 areas.
Rule #6. Another reversal rule to keep in mind is that prices tend to reverse no
t only at or near any ML, but also at ML extensions. And also at any MLH or exte
nsions of a MLH.
Rule #7. The Penetration Rule is that whenever prices gap past, or plunge throug
h any ML, there is a high probability that they will quickly return to it tempor
arily, and then resume the trend they had before they gapped or plunged through.
Rule #8. Price Failure Rule; When prices fail to reach the ML as shown by a spac
e between the P of reversal and the ML, the probability is that this price rever
sal will go further than it did on it's approach toward the ML.