Andrews’ Pitchfork

Andrews’ Pitchfork is a channel-based analysis method created by Dr. Alan Andrews. This technique involves drawing three parallel trend lines to indicate areas of support and resistance. The three lines are derived from three consecutive significant peaks or troughs. These trend lines are automatically generated by marking three points on a chart, each representing a crucial pivot point. It is recommended to use one of the following patterns: in an uptrend, the sequence is trough-peak-trough; in a downtrend, it is peak-trough-peak. The first two points establish the trendline, while the last two points define the channel. Once the last two points are connected, the channel is finalized, and the median line is added, creating a shape that resembles a fork.

The primary rule for utilizing Andrews’ Pitchfork aligns with channel trading: in an uptrend, the upper channel line may act as a resistance level, while in a downtrend, the lower line may serve as a potential support level. The median line indicates the strength of the trend: during a strong uptrend, prices typically remain above the median line, whereas in a strong downtrend, prices tend to stay below it. Andrews’ Pitchfork can also be adapted into Schiff and Modified Schiff Pitchforks. The Schiff Pitchfork shifts the starting point of the median line halfway to the base of the channel, while the Modified Schiff Pitchfork adjusts the starting point of the median line by a distance equal to half the difference between the price values of the channel's base points.

How to Draw Andrews’ Pitchfork

Here is an example of drawing an Andrews’ Pitchfork during an uptrend. First, identify the most recent low, which will be Point A, where the median line begins. Next, locate the highest movement from Point A, which is Point B. The following point, Point C, is determined by finding the lowest retracement from Point B. The sequence is Point A rallying to Point B, then retracing to Point C, before continuing the uptrend. It is important to note that when the uptrend reverses, the lower trend line that previously acted as a support level may now function as a resistance level.

How to Trade Andrews’ Pitchfork

The pitchfork illustrates ongoing points of support and resistance. The Andrews’ Pitchfork tool enables traders to engage with channels during trending markets. Typically, one would sell when the price ascends to the upper tine (line B) and take profit when it reaches the middle tine (line A). Conversely, one would buy if the price drops to the lower tine (line C) and take profit when it rises back to the middle tine (line A).