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 outdoors 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’s little query now as to the validity of development or frequency as might be seen by the inexperienced circles. It is very important level out that in Pitchfork evaluation minor violations on an intra-day or closing foundation aren’t 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 Day by day S&P 500 Index chart the Inner Traces are drawn on the similar 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 assist at each the Decrease Inner Line and the Higher Inner Line quite a few occasions. I also needs to add that so long as the Inner Traces are drawn on the similar 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 outdoors the confines of the pitchfork (an instance of an Exterior Sliding Parallel is posted under. They at all times share the identical angle and signify inside and exterior assist and resistance. On shut inspection of the chart above readers will discover that the sliding parallel (blue line) may be very near a 50% inside line.
Our subsequent instance focuses on a further affirmation instrument utilized in median line evaluation. This system was offered to Dr. Andrews by one among his course members, a Mr. Hagopian. On the chart under, the primary Hagopian Line (H1) is drawn from the Level of Origin (PO), or the primary worth pivot chosen, to P2 or third lower cost pivot. The second can be drawn from the PO however this one is drawn to P1, the second chosen worth 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, worth slowed on the 50% inside line, reversed, and broke above the higher parallel line. The reversal is confirmed by worth 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 determine the Pitchfork Deal with. The gap would be the similar because the size of the pitchfork deal with (highlighted in orange). These swing parallels, SP1 and SP2, additional determine factors of assist and resistance on the worth grid.
Within the subsequent Median Line Evaluation, A.Ok.A. Andrews Pitchfork, Half #4, Additional Methods, I’ll share additional methods and strategies utilizing Pitchforks. These embody what we now have coined as “Mixture Pitchforks” and “Dueling Pitchforks” which when mixed create a assist and resistance frequency grid in worth and time (one among which we present above). We may even display 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