How to Draw The Three Parallel Trend Lines
The first step in constructing the andrew’s pitchfork is selecting a major peak or trough. This major swing point will later be the origin of the median line for the indicator. The next part of the channel is to select the next swing high and swing low pivots after the major swing point. A line is then drawn from the major peak or trough through the middle of the second and third swing points. Lastly a line is extended from both the second and third pivot points parallel to the median line. These three parallel lines give the appearance of a pitchfork.
How to Trading the Andrew’s Pitchfork
Traders should use the same methods for trading trend lines with the andrew’s pitchfork. We are advantage of the andrew’s pitchfork over traditional trend lines, is that it allows the construction of a trading channel, prior to multiple pivot points at support and resistance lines. When the market is trending strongly, the price will stay primarily near the respective parallel line and gravitate to the median line on small corrections. Traders can use the pullback to the median line as an opportunity to jump on board of the current trend. When prices fall through the median line, the assumption is that the price will move towards the opposite parallel line. If the second parallel line is broken, this is an early sign that the primary trend is in jeopardy. Conversely, if the price breaks out of the parallel line that is at the extreme of the range in the direction of the trend, then the security is said to be unlimit bought or sold. Traders should wait for the price to come back inside of the pitchfork, prior to attempting to take on new positions. Dr. Andrews believed that the price action will move to the median line 80% of the time while the primary trend is intact.
Copyright © 2010 mysmp.com. All Rights Reserved.
The first step in constructing the andrew’s pitchfork is selecting a major peak or trough. This major swing point will later be the origin of the median line for the indicator. The next part of the channel is to select the next swing high and swing low pivots after the major swing point. A line is then drawn from the major peak or trough through the middle of the second and third swing points. Lastly a line is extended from both the second and third pivot points parallel to the median line. These three parallel lines give the appearance of a pitchfork.
How to Trading the Andrew’s Pitchfork
Traders should use the same methods for trading trend lines with the andrew’s pitchfork. We are advantage of the andrew’s pitchfork over traditional trend lines, is that it allows the construction of a trading channel, prior to multiple pivot points at support and resistance lines. When the market is trending strongly, the price will stay primarily near the respective parallel line and gravitate to the median line on small corrections. Traders can use the pullback to the median line as an opportunity to jump on board of the current trend. When prices fall through the median line, the assumption is that the price will move towards the opposite parallel line. If the second parallel line is broken, this is an early sign that the primary trend is in jeopardy. Conversely, if the price breaks out of the parallel line that is at the extreme of the range in the direction of the trend, then the security is said to be unlimit bought or sold. Traders should wait for the price to come back inside of the pitchfork, prior to attempting to take on new positions. Dr. Andrews believed that the price action will move to the median line 80% of the time while the primary trend is intact.
Copyright © 2010 mysmp.com. All Rights Reserved.