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Andrews' Pitchfork: Technical Indicator
Andrews' Pitchfork: Technical Indicator
The reason this indicator is called a "pitchfork" becomes apparent from the shape that is
created in the chart.
KEY TAKEAWAYS
Andrews' pitchfork is a method that uses a series of three trendlines to identify trends
and reversals.
Higher and lower trend lines denote support and resistance.
Andrews' Pitchfork can provide momentum traders with signals in the long- or
intermediate-term, where it is most useful in predicting more protracted market swings.
It is recommended to always confirm pitchfork breakouts and breakdowns with other
technical indicators.
Understanding Andrews' Pitchfork
This technical indicator (sometimes referred to as "median line studies"), was developed by
Alan Andrews. It uses trend lines that are created by selecting three points at the start of
confirmed trends, higher or lower. This is achieved by placing the points at three consecutive
peaks and troughs. Once the points are in place, a straight line that denotes the “median line” is
drawn from the first point through the midpoint between the upper and lower points. Upper
and lower trend lines are then drawn parallel to the median line.
Andrews' Pitchfork also uses trigger lines, which are trend lines that originate from point one
(median line inception price) and intersect with the other points. A lower trigger line connects
points one and three, sloping upward on a rising pitchfork. An upper trigger line joins points
one and two, sloping downward on a falling pitchfork. Trading signals generated by the trigger
lines typically occur well after price breaks the pitchfork’s upper or lower trend line. Breakouts
above the upper trigger line suggest further upside, while breakdowns below the lower trigger
line predict further downside.