A few days ago I was asked how I draw the Andrews Pitchforks, and whether it was accepted practice to use them in forecasting future Support/Resistance by picking points where Price has not yet gone. I'd like to demonstrate this technique to you. It's not something I've ever seen in the literature, but I believe it works well.
Back in November this is how we would have drawn the Andrews Pitchfork. Notice how nicely the center line meets the bottom edge. The break out called a significant drop.
But then it became apparent that we needed to draw the fork wider. Notice Price volleys around the center line Not quite as clean as the first chart. But the breakout does once again provide a good place to short.
Eight days later we must widen the fork yet again. This time the center line has an even looser grasp of the peaks and bottoms. At this point we should be looking for an alternative.
Now this next position of the 0% line is looking better. Still it could be tighter.
Ahhh! That's what I'm talking about. Price meets the Tops and bottoms with precision.
Now that you know what I'm looking for, here is a forecast fork. Looks tight, looks right.
And finally let's see how this fits into the larger picture. The white fork at the top is the same white fork in the chart above. Notice the perfect overlay and alignment. This is confirmation of the forecast fork.
This fork will be important in the coming weeks when Price breaks the center line of the forecast fork. We now know where the supports will be.
And finally I'd like to mention that TOS has a the ability to draw more than just three lines.
Analysis presented on this Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling currency contracts.