Blog Archive

Saturday, January 9, 2010

Andrews Pitchforks

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.

2 comments:

  1. Thanks for the additional clarification...I was not aware that you could project additional parallel lines from the pitchfork it TOS. That's a nice feature. It's amazing to me how well the tool matches up with the historical DJIA and other charts. I started digging into the pitchfork over the weekend, since my previous searches had only produced a brief description of the application. I came across a reproduction of Andrew's original correspondence course describing the technique in more detail: http://www.medianline.com/medianlineinfo/actionreactioncourse.html if you are interested. I tend to geek out over this stuff, and find it interesting to go back in history to see how it was applied by the originator. It seems to be a powerful forecasting tool, which is what I am currently lacking in my trading.

    Cheers

    ReplyDelete
  2. Thanks! I've only glossed over the documents, but I'm very happy that you showed me this. I get that I may have perceived only part of what Alan Andrews described in this document, and I'm looking forward to spending the time to study his work more fully.

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