How to Use Andrew’s Pitchfork Indicator and Median Lines!

There are many trading strategies available in the world, and Andrews Pitchfork is one of these.

This trading tool is straightforward to plot in the chart, and it provides many profitable trades. In the following section, we will guide you about this trading tool so that you can make a consistent profit from it.

What is Andrews Pitchfork?

Andrews Pitchfork is a trading tool that is used to identify market trends and potential market reversal. It allows traders to identify a possible trading channel to determine whether the price will move up or down.

Furthermore, it indicates the point where the market may start a correction. Alan Andrews developed this trading tool, which is similar to ordinary trend lines that we create with straight lines based on the high and low market. 

As we know, institutional traders who have the monetary power to move the price use significant levels to make price movements. Therefore, identifying a vital level is very important for traders. Andrews Pitchfork allows traders to identify these potential support and resistance levels. 

There are three parallel lines in the Andrews Pitchfork trading indicator that are constructed from three different lows and highs in the chart. In a downtrend, the pitchfork moves from a high, low, and high again. Conversely, in an uptrend, it moves through a low, high, and low again.

pitchfork

The image above represents Andrews Pitchfork trading indicator in a downtrend market. We can see in the picture how parallel lines are set with appropriate highs and lows. This trading tool is free in all trading platforms and easy to draw.

Let’s have a look at how we can draw Andrews Pitchfork trading indicator.

Andrews Pitchfork Drawing Tool

This trading tool is free in most of the trading platforms, such as Mt4, Mt5, and cTrader. Furthermore, it is elementary to attach in your chart, as you have to put the three different high and low points.

Andrew Pitchfork Draw

For the Mt4 trading platform (as you can see in the above image), the Andrews Pitchfork trading tool is available on the insert tab. Furthermore, you can find this trading tool in the “Gann and Fibonacci Tools” section in Tradingview.com

After identifying the tool, you should select three referral points based on Low-high-low for a bullish market and High-low-high for a bearish market. The whole indicator will be shown in the chart as soon as you input three points.

As we know, these three points are essential elements for this trading tool. Therefore, traders should understand the logic of selecting these points. In the following section, we will see how we can draw these points based on technical knowledge.

How to Draw Andrews Pitchfork

To draw this tool accurately in your chart, you need to pick three initial points. Let’s have a look at how you can draw it in your chart:

#1 Three Points of Andrews Pitchfork

The concept of this trading tool is to identify an emerging or existing trend on the chart by spotting high and low points, as discussed earlier.

The three reference points should be based on the following logic:

  • The first reference point is the beginning point of a trend.
  • Second is the high of an emerging trend.
  • The third point is the retracement of the initial swing move.

Three Points of Andrews Pitchfork

In the image above, you can see how three points are spotted in a chart. You have to take these points to draw this tool.

#2 Andrews Median Line

The second thing is to identify the middle point of points 2 and 3. You can make a straight line from point 2 to 3 and find the central point or use the tool available in your platform to draw it automatically.

Later on, the Median line is the straight line from point 1 to the middle of point 2 and 3 with a ray. In the image below, you can see how the median line looks like:

Andrews Median Line

#3 Pitchfork Channel

It is a parallel ray that starts from the Median line and goes through the middle of point 2 and point 3. It would be drawn automatically by using the trading tool that is available in your platform; otherwise, you can draw it manually.

The complete form of Andrew’s pitchfork has a channel and the central line that moves parallel. Therefore, it represents a zone that works as a potential support and resistance level.

This trading indicator will work well when the price moves through it. Therefore, we can analyze the price action at the channel area to identify a potential trading opportunity.

Andrews Pitchfork Trading Strategy

Price may find the Andrews Pitchfork level as potential support and resistance levels. Therefore, the price may rebound from this channel or can breakout. In both cases, we can make a good profit.

Andrews Pitchfork Breakout Strategy

In this strategy, identify the price that is moving within the channel. Later on, wait for a breakout in the price with a strong candle. A strong candle is essential because it represents an extensive bullish or bearish pressure that increases the possibility of a sustained move.

  • Enter the trade when the price comes back to the channel after the breakout and get a rejection. Make sure to take the trade after a candle closing.
  • The stop loss should be above the rejection candle with some buffer.
  • The take profit will be based on the strength of the breakout. Monitor the near term event level or key level in a higher timeframe for a potential take profit level. Furthermore, move your stop loss at break-even as soon as the price makes new high or low.

Andrews Pitchfork Breakout Strategy

In the image above, we can see how the price breaks out from the channel with massive speed and retests the channel again. Later on, it rejected the channel, with a potential double top pattern and pin bar formation.

Andrews Pitchfork Price Action Strategy

As we have seen earlier, this trading indicator works as a potential support and resistance level. Therefore, you can trade based on the price action from the channel.

However, to increase the accuracy of your trade, you should add the market context to eliminate unusual false break.

Andrews Pitchfork Price Action Strategy

In the image above, we can see a bullish Andrews Pitchfork that moves within a bullish trend. As the current trend is bullish, we will consider sell trades only.

  • Wait for the price to come at the channel support level with a corrective speed and enter the trade as soon as the market rejects the level with an appropriate price action candle.
  • Stop-loss should be below the rejection candle with some buffer, and the take profit will be based on near term event levels and key levels.

Summary

The summary of what we have learned about the Andrews Pitchfork trading strategy is mentioned-below:

  • The first reference point is the beginning point of a trend.
  • The second reference point is the high of an emerging trend.
  • The third point is the retracement of the initial swing move.
  • After a breakout, traders should wait for the price to retest the channel again before entering a trade.
  • When the market is within the channel towards the direction of the trend, the upper and lower channel provides an excellent trade continuation opportunity.
  • Enter the trade after the candle closing only.

Andrews Pitchfork trading has proven records of accomplishment, and many professional traders use it. Furthermore, this trading indicator is straightforward to implement in the chart.

However, there are some unavoidable risks in the forex market, so we should minimize the trading risk by using an appropriate lot size and a proper money management strategy.