Auto Pitchfork Indicator

 Auto Pitchfork Indicator is a technical analysis tool used to identify potential levels of support and resistance in a trending market. The Pitchfork, also known as Andrews' Pitchfork, consists of three parallel trendlines that help traders to predict the price's movement within a channel. This tool is named after Dr. Alan Andrews, who developed it.

Components of Andrews' Pitchfork:

  1. Median Line (ML):

    • This is drawn from a significant high or low point (the pivot point) to the midpoint between two subsequent significant highs or lows.

  2. Upper Parallel Line (UPL):

    • This line is drawn parallel to the median line, starting from the first significant high or low.

  3. Lower Parallel Line (LPL):

    • This line is also drawn parallel to the median line, starting from the second significant high or low.

How to Construct Andrews' Pitchfork:

  1. Identify Three Points (P1, P2, P3):

    • P1: The first pivot point.
    • P2: The second pivot point.
    • P3: The third pivot point.

  2. Draw the Median Line (ML):

    • The ML starts at P1 and extends to the midpoint between P2 and P3.

  3. Draw the Upper and Lower Parallel Lines:

    • The UPL is drawn parallel to the ML and starts from P2.
    • The LPL is drawn parallel to the ML and starts from P3.

Interpretation and Usage:

  • Support and Resistance:

    • The UPL and LPL act as dynamic support and resistance levels.

  • Trend Identification:

    • The slope of the median line indicates the trend direction.

  • Trade Entries and Exits:

    • Trades can be entered near the lower parallel line during an uptrend and near the upper parallel line during a downtrend.