The Auto Pitchfork indicator is a powerful tool for identifying trend lines and key levels of support and resistance in the Forex and other markets. It is compatible with all timeframes.
What is the Auto Pitchfork Indicator?
The Auto Pitchfork Indicator is based on a technical analysis tool developed by Dr. Alan H. Andrews, who was a well-known trader, technical analyst, and teacher. He believed that the principles of physics could be applied to the movement of prices and created a course called “Median Line Method” which was sold for a high price in the 1960s and 1970s.
What are the key Features of the Auto Pitchfork Indicator
- It can be used to identify key levels of support and resistance.
- It helps traders to identify trend lines.
- It is compatible with all timeframes.
To construct a median line according to Andrews’ method, you must first identify three key points of extremes, designated as P1, P2, and P3. Then, a line should be drawn from point P1, passing through the midpoint of the line connecting P2 and P3.
To complete the median line construction, it is essential to draw the Upper Line and Lower Line parallel to the Median Line from points P2 and P3. This forms a pitchfork shape with a “handle” at point P1. This pitchfork tool in technical analysis is known as Andrews Pitchfork, however, the concept of median line was discussed by George Marechal and Roger Ward Babson (a wealthy businessman) in the 1920s and 1930s.
The Auto Andrews’ Pitchfork Indicator is a powerful tool that enhances the use of median line by:
- Identifying key points of extremes through the built-in classic MACD indicator.
- Creating the two most relevant pitchforks.
- Eliminating unnecessary pitchforks in order to maintain clarity in the price chart.
Auto Pitchfork Strategy
Buy Signal
- The Auto Pitchfork indicator sends a buy signal when the price is moving towards a level of support, indicating that the trend is likely to continue. Additionally, when the price breaks above the median line, it may signal a strong buying opportunity.
Sell Signal
- When the price approaches a level of resistance, the Auto Pitchfork indicator may indicate a potential trend reversal and emit a sell signal. Additionally, if the price falls below the median line, it could be interpreted as a strong indication to sell.
Typically, traders will buy an asset when its price approaches a level of support, represented by either the central trendline or the lowest trendline. On the other hand, they will sell the asset when it reaches a level of resistance, represented by either the central trendline or the highest trendline. While the central trendline can indicate areas where a forex pair may experience support or resistance, it is generally not as reliable as the outer trendlines. These levels, identified by the indicator, are often used as effective positions for placing stop-loss orders.
Auto Pitchfork indicator Pros & Cons
Pros
- Can be used to identify key levels of support and resistance.
- Helps traders to identify trend lines.
- Compatible with all timeframes.
Cons
- It may not be effective in markets with low volatility.
- It’s not always easy to interpret the indicator’s signals.
- It’s not useful in identifying entry and exit points, but only gives indication of possible trend change.
Conclusion
This indicator is useful for trading with the trend as the median line generally points in the direction of the market. Despite being a classical indicator from the last century, it can still be effectively applied in today’s markets, both for intraday trading and for longer-term investments on daily and weekly charts. It is recommended to combine it with other tools and techniques to increase the accuracy of signals.
It is important to note that the Auto Andrews’ Pitchfork Indicator for MetaTrader does not guarantee the best buy and sell signals. Therefore, traders should exercise caution and test it on a demo account before risking their deposit.
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