Half 3, Additional Development Fundamentals will current additional instruments that have been developed by Dr. Alan Andrews and his college students.
Warning Traces are parallel traces drawn exterior the unique pitchfork traces. They’re drawn equidistant from the Median Line and “tines” or Parallel Traces of the Pitchfork.
I barely altered the labeling of the chart above and those who observe to PO (level of origin) by way of P3. I’ve utilized to the chart above, two higher and two decrease warning traces (inexperienced dashed traces) to the chart that was posted in our final tutorial weblog. There may be little query now as to the validity of development or frequency as might be seen by the inexperienced circles. You will need to level out that in Pitchfork evaluation minor violations on an intra-day or closing foundation will not be essential to the spirt of the validity.
Together with Warning Iines, Inner Traces may also be drawn.
As displayed within the Schiff Pitchfork instance above drawn on the Each day S&P 500 Index chart the Inner Traces are drawn on the identical angle midway between the Parallel Traces and the Median Line of the Schiff Pitchfork. I’ve drawn the Inner Traces in purple for readability functions. Costs revered help at each the Decrease Inner Line and the Higher Inner Line quite a few instances. I must also add that so long as the Inner Traces are drawn on the identical vector or angle of the Pitchfork they are often drawn by way of trial and error at any spacing between the Median Line aand the Higher and Decrease Parallel. Some analysts use Fibonacci ratios.
Sliding Parallels (SP on the instance above) are traces drawn parallel to the median line. They are often drawn between the higher and decrease parallels or exterior the confines of the pitchfork (an instance of an Outdoors Sliding Parallel is posted beneath. They all the time share the identical angle and symbolize inside and exterior help and resistance. On shut inspection of the chart above readers will discover that the sliding parallel (blue line) could be very near a 50% inside line.
Our subsequent instance focuses on a further affirmation device utilized in median line evaluation. This method was offered to Dr. Andrews by considered one of his course members, a Mr. Hagopian. On the chart beneath, the primary Hagopian Line (H1) is drawn from the Level of Origin (PO), or the primary value pivot chosen, to P2 or third cheaper price pivot. The second can also be drawn from the PO however this one is drawn to P1, the second chosen value pivot. Each are drawn in blue).
To paraphrase Dr. Andrews, when costs fail to return to the median line (which research have claimed to happen 80% of the time), a reversal could also be on the horizon. Within the chart above, value slowed on the 50% inside line, reversed, and broke above the higher parallel line. The reversal is confirmed by value buying and selling although the higher Hagopian Line, labeled H1.
Swing Parallel Traces
Swing Parallel Traces are traces drawn throughout the pitchfork parallel to the bottom or swing line (within the above instance P1 to P2 of the Schiff Modified Pitchfork in inexperienced). On this case we now have not prolonged the Pitchfork again to raised establish the Pitchfork Deal with. The gap would be the identical because the size of the pitchfork deal with (highlighted in orange). These swing parallels, SP1 and SP2, additional establish factors of help and resistance on the value grid.
Within the subsequent Median Line Evaluation, A.Ok.A. Andrews Pitchfork, Half #4, Additional Strategies, I’ll share additional strategies and strategies utilizing Pitchforks. These embrace what we now have coined as “Mixture Pitchforks” and “Dueling Pitchforks” which when mixed create a help and resistance frequency grid in value and time (considered one of which we present above). We can even show pitchforks utilized in live performance with Momentum Oscillators and Elliott Wave.
Charts are courtesy of Optuma whose charting software program allows customers to use, regulate and modify Pitchfork variations and related instruments within the above charts at a click on of the mouse. To obtain a 30-day trial of Optuma charting software program go to