Andrew’s Pitchfork creates three lines from three ‘pivots’. The bottom line is known as the lower median line (LMLH), the middle line the median line (MLH) and the top line, the upper median line (ULMH).
To paraphrase Dr Mircea Dologa, probably the greatest living expert on the Andrew’s Pitchfork, the cardinal rule of the pitchfork, is that the best pitchfork encapsulates the market flow the most accurately.
The choice of pivot points to use, therefore will depend on to what extent and accuracy does the resultant pitchfork before capture the fullest possible extent of the flow of the market, and identify accurately resistance and support from the historical price action.
The general rule of thumb is the more tests of the line (minimum four tests) the stronger the resistance / support offered by the line.
In drawing a pitchfork the following aspects need to be considered:
- Choice of pivots: major, minor, minute; ‘hanging’; Schiff; ‘T’-pitchfork; fibonacci.
- Fibonacci and Gann lines (e.g. 25%, 33%, 61.8% etc) and extensions (123.6, 127.2 138.6, 150, 161.8, 2 etc).
- Parralel lines (undefined extensions above below a fib or LH line.
- Testing of the LH lines (‘Never trust an untested median line – Mircea Dologa’).
- Upper and lower trigger lines signifying pitchfork failure
Further aspects related to Pitchforks that ought to be considered:
- Action-Reaction line setup
- Inner pitchfork (minor pitchfork)
- Higher timeframe pitchfork
- Pitchfork confluences (e.g. with fibonacci price expansions, extensions and retracements; moving average crossover inflexion confluences)
- Price action and related patterns (e.g. candlestick patterns; mirror bar reversals; upsloping and downsloping failure [to reach next line].
The classic trade of the pitchfork involves buying off a well-tested LMLH, or selling off a well-tested UMLH.
The price action at an LH line can do one of three things. Halt (fail to break, possibly turn); Pierce (in an upsloping pattern, pierce through, then close below); Zoom (zoom through and offer a strong close).
The most tradable of a MLMH trade is the zoom of the median line, whereby a order can be placed at the retracement to median line, after a strong close above it.
There are possible trades off the trigger line, but the typical trigger line trade is a zoom followed by a clear retest in the direction of the reversal.
Figure 1a. Choice of pivots: major, minor, minute
Figure 1b. Choice of pivots ‘hanging’
Figure 1c. Choice of pivots ‘Schiff’
Figure 1d. Choice of pivotrs ‘Fibonacci’
Figure 1e. Choice of pivots ‘T pitchfork’.
Figure 2. Fibonacci lines within pitchfork
Figure 3. Parallel lines inside/outside of pitchfork
Figure 4. Well tested line
Figure 5.
Figure 1f. Upsloping failure with candlestick pattern
Figure 2b
Figure 3b
Figure 4b
Figure 5b