Getting to Know Andrews Pitchfork Technical Indicators
Andrew’s Pitchfork technical indicator, also known as the median line, is an indicator of support and resistance developed by a Professor of Thermodynamics at MIT, named Dr. Alan Andrews, in the 1970s. This technical indicator uses three parallel trend lines based on three alternating pivots to identify the support and resistance levels.
Then, how to calculate and draw it? The trend line is created by placing three points (price level) on three peaks or successive troughs. Or pivot peak and low position, at the beginning of the trend. A straight line is then pulled from the first level, cutting the middle or median level from the other two levels. For this reason, Andrews’ Pitchfork is also called “midline study”. Parallel and parallel lines are then drawn from the second and third levels. The result is a trend channel with the median median being in the center of the channel.
The most modern charting software incorporates Andrew’s Pitchfork technical indicators as an image tool applied to price charts, although it may be called Median Lines on some charting software.
So how do I use it and interpret this indicator? Like any trend channel, the outer trend line marks a potential support and resistance level. The prevailing trend is said to remain intact as long as it moves within the trend channel of the Pitchfork trend and a trend reversal is said to occur as the price breaks through the opposite Pitchfork trend channel towards the direction of the current trend.
Thus, in an uptrend, the down trend line acts as a support and the upper trend line acts as resistance. While the median line (midline) determines the continued strength of the trend. The price movement of the underlying pair or stock should move from the trend’s lower line and reach the median line regularly during the uptrend. If the price fails to reach the midline, it means there is a weakness in the trend that could overshadow a reversal. A reversal of this direction will occur when the movement of the price breaks the support, ie when it breaks below the trend line below. Once the support line is broken, it can be the resistance line. Reversal of this direction is true to the downtrend.