Pitchforks are a popular analysis and trading technique. In essence, there are 3 key elements to it: 2 outside parallel lines that provide support and resistance and a median line in between them. To use a pitchfork correctly, identify 3 points that are consecutive highs and lows, where the first point represents the start of a trend. The median line connects the first point to the midpoint of the other 2. Additional lines can be added at a set number of standard deviations from the median, forming parallel trend channels.
They can be used to identify buying and selling opportunities at those lines (for trading bounces or breaks), depending on the specific rules of entry and exit a trader may have. Conservative traders look for additional confirmation. Apart from Andrew's Pitchfork
there are variations like the Schiff Pitchfork
, the Modified Schiff pitchfork and the Inside Pitchfork
and TradingView has smart drawing tools for all of these techniques. There is also a popular chat
where users share ideas using this technique.