Andrews Pitchfork was developed Dr. Alan Andrew. It is an analysis technique which is based on channels. This technique contains three parallel trend lines which are used to indicate the support and resistance areas. The three major peaks are generally used in this technique to develop the three parallel trend lines. Three points are drawn on a chart to create the trend lines automatically. Each trend line represents the key pivot point.

The following schemes may be used:

• In an uptrend, trough-peak-trough.
• In a downtrend, peak-trough-peak.

First two points indicate the trend line while last two points show the channel. The channel is completed by connecting the last two points. A median line is also drawn additionally and the plot is just like a fork. The Andrews’ Pitchfork is used according to same rule as in the channel:

• In an uptrend, the upper channel line might serve as a resistance level.
• In a downtrend, the lower line might serve as a potential support level.

The strength of the trend is represented by the handle (median line):

• In a strong uptrend, price tends to be above the median line.
• In a strong downtrend, price tends to be above the median line.

Andrews’ Pitchfork can be converted into Schiff and Modified Schiff Pitchfork.

• Schiff Pitchfork moves the start point of the handle line halfway to the base of the channel.
• Modified Schiff Pitchfork adjusts the handle start point by the distance equal to half a difference between price values of base points of the channel.

Procedure to Draw Andrews’ Pitchfork

1. First Find a Point which is the recent low. From point A median line or middle tine will start.
2. Secondly, find the highest move created from point A which is point B.
3. And lastly, next point Point C which is found by looking for the lowest retracement move from Point B.

Point A move towards the Point B, then retraces to Point C , then resumes its uptrend. It is to be noticed here that when uptrend goes reverse, the lower trend line that used to act as a support level has now become a resistance level.

The Way to Trade Andrews’ Pitchfork

The Pitchfork indicates the continuouse points of support and resistance. Andrews’ Pitchfork tool, on market trends allows traders to trade channels. The trader may sell when price increases to upper tine which is line B and profit is gained when price comes to middle tine which is point A. A trader may also buy if price decreases to the lower tine, which is line C, and take profit when it rises back to the middle tine, line A.