Advanced technical analysis
Monitoring trends isn’t always an easy feat, thanks to the multiple highs and lows a market may experience within a broader move.
Andrew’s pitchfork provides a useful method to identify and outline any deviations from the main path of a trend – as well as providing a channel that offers support, resistance and a median line.
- What is Andrew’s pitchfork?
- How to draw Andrew's pitchfork
- Using Andrew's pitchfork
- Examples of Andrew's pitchfork
- Extending the pitchfork
- Andrew’s pitchfork factsheet
What is Andrew's pitchfork?Andrew’s pitchfork is a drawing tool that you can access on FOREX.com trading charts. It takes the form of three lines: a median line, plus an upper and a lower line equidistant from it. You can use these to highlight future support and resistance, possible upcoming breakouts and more.
Alan Andrews invented the pitchfork back in the 1960s as a means of predicting how much a market might deviate up or below its primary trend.
How to draw Andrew's pitchfork
To draw Andrew’s pitchfork, you connect three points on a trending market’s chart:
- The first (A) marks the beginning of the trend
- The second (B) is its reaction high – when it hits a peak before a countertrend forms
- The third (C) is its reaction low – when the countertrend ends and reverses
Once you have selected these three points, you will see the three lines on your chart. They look like a pitchfork, which is where the tool gets its name.
TIP - You don't have to draw the pitchfork in the order listed above – if your market hits its reaction low before its reaction high, then selecting point C before B will work just as well.
Using Andrew's pitchfork
If you have drawn your pitchfork correctly, then the median line should follow the broad trend. The upper and lower lines act as support and resistance levels, sending the price back towards the median.
Occasionally, the median line itself can act as support or resistance.
When either of the outer lines is broken, a breakout could be on the cards. This may signal the impending end of the prevailing trend.
Examples of Andrew's pitchfork
1. Breakouts above the upper trend line - Bullish fork
In this example, the initial trend started at A, then hit a reaction low first at B. It then bounced up to a new peak at C, giving the three points required to draw the pitchfork.
The lower support line from B correctly anticipated where the market would bounce up on several occasions. When the market broke the resistance line from C, a breakout and acceleration out of the established trend ensued.
2. Breakdowns below the lower trend line - Bearish fork
You can use Andrew's pitchfork on both uptrends and downtrends. Here, we've drawn one on a downward-trending example.
First, the market hit a significant bottom at B. It then reached a peak at C. As you can see, the median line provided support. Now it is broken, the lower B line may become a new support level.
Extending the pitchfork
If a prevailing trend accelerates beyond either of the 'prongs' on the fork, then you might consider adding an extra line to extend the channel.
To do this, simply draw another parallel line in the direction of the breakout, at another remove from the distance between the upper/lower line and the median.
Andrew's pitchfork factsheet
|Used in:||Uptrends or downtrends|
|Used for:||Identifying future support and resistance within a trend|