Andrews’ Pitchfork

Andrew’s Pitchfork is a technical analysis tool used to identify potential support and resistance levels in a trending market. It consists of three parallel trendlines that are drawn based on significant price points.

The first step in constructing Andrew’s Pitchfork is to identify a significant pivot point or swing high/low in the price chart. This point is usually the start of a strong trend or a reversal. It is marked as point A.

The second step is to draw a trendline from point A to another significant high or low point in the chart. This trendline represents the median line of the Pitchfork and acts as the anchor for the other two parallel lines. This line is marked as line AB.

The third step is to draw two parallel lines equidistant from line AB. These lines are usually drawn from the two significant swing points that are closest to the median line. The first line is drawn above line AB and acts as a potential resistance level, while the second line is drawn below line AB and acts as a potential support level.

Once the Pitchfork is constructed, it can be used to identify potential price targets, support, and resistance levels. Traders look for price action near these levels to determine potential buying or selling opportunities.

In an uptrend, the price tends to find support at the lower parallel line and resistance at the upper parallel line. Conversely, in a downtrend, the price tends to find support at the upper parallel line and resistance at the lower parallel line. The median line can also act as a support or resistance level.

Traders can use Andrew’s Pitchfork in various ways. Some common strategies include buying near the lower parallel line in an uptrend or selling near the upper parallel line in a downtrend. Traders may also look for price bounces off the median line or breakouts from the Pitchfork as potential trading signals.

It is important to note that Andrew’s Pitchfork, like any technical analysis tool, is not infallible and should be used in conjunction with other indicators and analysis techniques. It is also essential to practice and gain experience in using this tool effectively.