Have you Seen Andrew's Pitchfork?Andrew's Pitchfork, developed by none other than Dr Alan Andrew himself, is a technical indicator that relies on a channel technique using three parallel trend-lines acting as support and resistance levels. The key to using strategy lies mainly in the median line where each line is created from previous major peaks and troughs. The great advantage of this indicator is that it gives you a possible projection of where the price may form major highs and lows. Knowing this can help you anticipate to buy or sell the currency once the price reaches those lines. Basically, this will help you trade the channel from either the resistance level or the support level to the nearest line. Here is an example of this indicator in action:
As you can see in the above 1 hour chart, Andrew’s Pitchfork was drawn by the use of point 1,2 and 3. We found the most recent low, which was at point 1. The next step is to pinpoint the highest move made from point 1, which is point 2. The next step is to determine the lowest retracement move made from point 2, which is point 3. Once all those points are connected, you get the extension lines as seen in the picture above giving you insight that there may be an uptrend progressing. The middle line is known as the median line, the top line acts as resistance and the bottom line acts as support. This indicator shows continuous points of support and resistance. The ideal way to use the pitchfork is to sell when the price moves to line 2 and to take profit when it reaches the median line. As you may see from the above picture, price encountered support on line 3 for an extended period of time, when it finally moved to higher highs. Price then broke through the median line to test resistance line 2, before finally heading back to the median line. The pitchfork is a great tool to use when the market is trending. Happy trading. Top of: Andrew's Pitchfork Page Back to: Learn Forex Trading Page Back to: Forex Charts Page Back to: Forex Trading Domain Homepage
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