Developed by Alan Andrews, Andrews' Pitchfork is a trend channel tool consisting of three lines.
A technical indicator that uses three parallel trend lines to identify possible levels of support and resistance. The trend lines are created by placing three points at the end of identified trends. This is usually achieved by placing the points in three consecutive peaks or troughs. Once the points have been placed, a straight line is drawn from the first point that intersects the midpoint of the other two.
Andrews' Pitchfork |
Picking Three Points
The first step to using Andrews Pitchfork is selecting three points for drawing. These points are usually based on reaction highs or reaction lows, also referred to as pivot points.The first point selected marks the start of the median line. Points 2 and 3 define the width of the Pitchfork channel. The median line is based on two points: point 1 and the midpoint between points 2 and 3. As such, the median line starts a point 1 and bisects points 2 and 3. This controls the slope (steepness) of the median line. The outside trendlines are then extended parallel to the median line. The red Andrews' Pitchfork shows an alternative median line based on the July low for point 1. Notice that the red median line still bisects the line between points 2 and 3, but it is steeper than the blue median line. Pitchfork slope depends on the placement of point 1.