How we use the Andrews' Pitchfork
We Decode the Markets by stripping away the excess and concentrating on the supports and resistances evidenced in the Path of Price. We delineate that path and give it context via the Andrews Pitchfork
We seek to "frame" or give context to these pared-back charts by the use of Median Line Analysis – this is really another name for an Andrews Pitchfork.
By using the Andrews Pitchfork in our Market Analysis we can graphically show or define the Path of Price and thereby predict and anticipate likely areas of support and resistance with great accuracy. This allows traders and investors to make use of low-risk, high-probability entries and exits.
At the heart of the methodology is Newton’s Third Law of Motion, which states that "For every action there is an equal and opposite reaction". This Law gives balance and equilibrium to the flow of price on a chart and is at the heart of the methodology that we use.
The Andrews Pitchfork emerges and projects from consecutive High-Low-High or Low-High-Low pivots. It is the strength that emanates from these correctly chosen pivots that provides the driving force for the lines of the Andrews Pitchfork to precisely define the all-important Path of Price.
We use the context given to us by the Andrews Pitchfork in our Market Analysis, but we are not slaves to it – we do not follow “rules” such as “If price breaches the Median Line, then it has xx% likelihood of achieving the Upper Parallel”. We use the lines of the Andrews Pitchfork in our Market Analysis as an exposition of the Path of Price and the position of price within the pitchfork as an indicator of its relative strength or weakness. Remember also the adage that “A trend is a trend until it changes” – well this relative strength or weakness can give us advance warning of a likely change of trend way ahead of other techniques. Again, it must be stressed, that all we are looking to do is define or "frame" the Path of Price - we do this by means of the Andrew Pitchfork.
Please take a look at the video on this page which explains the terminology and the practical application of the methodology that you will come across in our use of the Andrews Pitchfork in our Market Analysis.