Andrews Pitchfork
Alan Andrews believed that in 80% of cases the price returned to
The median line. It follows logically that if we are correct build Andrews' pitchfork and open the deal shortly afterwards.point C, the chances that this transaction will be successful, will be about 80%, i.e. four out of five deals.
That sounds good.Consider rice.1, blue forks. Once formed pivot C, we can build Andrews pitchfork.
It is recommended to wait for confirmation from the oscillators that a reversal at point C does indeed take place. Right after confirmation is received, we open a deal.Close the deal.You can either at the first touch of the price of the Median line (marked red cross), or use a close trailing stop whenapproach prices to the median line.Often, soon after the price touches the Median line,reversal and we thus get another reversal
the point. Accordingly, we can use it to construct new Andrews pitchfork and opening a new deal.In fig.1 green such a construction is shown in color.Please note that as a points A and B are turning points indicated in the previous construction of both B and C.The red cross is marked point of withdrawal of profit.
The construction of the models is continued similarly in Fig.2 and 3.In fig.2 red pitchforks are built at turning points B and C previous forks. The price did not reach the Median line a bit – in In this case, this can be considered an error in quotations or build lines. As soon as a new turning point is formed, we can build Andrews pitchfork again.In fig.3 they are shown in blue color.
However, as we know, not all deals are so simple and are successful. In some cases, prices do not reach the middle line,and punch the top or bottom line of the pitchfork and head to the opposite side. This can mean both wrong choice of point C, and simply a change in the market situation.
When the price, not reaching the Median line, turns around and is sent in the opposite direction, the trader has several options for what to do in this situation:
- wait until the price closes below the upper or lower fork lines,
- close the deal,
- pull foot at least to breakeven, and better with profit,
- close the current deal and open the opposite one.
It is hardly possible to say unambiguously which tactic is better.AT depending on the aggressiveness or conservatism of the trader, as well as the degree of his confidence in the correctness of the construction of forks, indications related indicators, wave markings and many other factors it makes sense to make decisions based on a specific situations.
However, Alan Andrews reports an interesting detail that will be useful to the trader. In the case where the price is not able to reach.The median line, it usually breaks through the reversal level point c. Price moves in a downtrend along the top line
Andrews pitchfork. This is a sign of market power.Finally, prices punch the top line of the pitchfork and rush up. At this point you can open a long position. In this case, the immediate goal will be the level points C.