ZLBT Chats

Tuesday, March 31, 2009

EO >>> The Andrew's Pitchfork Indicator

What is the pitchfork indicator and how to use it
The technical indicator known as Andrew's Pitchfork is not that well-known, and it's rarely used by novice traders.

However, it is a quick and easy way for traders to identify possible levels of Support and Resistance for an asset's price. It is created by drawing a line from the first point that runs through the mid-point of the other two points. The reason this indicator is called a "pitchfork" becomes apparent from the shape that is created in the chart.

If the security breaks above the resistance line in this example, the target will then change to the top line and the broken resistance line will then become the new support. It is not uncommon for a trader to sell a security near the resistance line and then see it break through and head higher. E&O is now at the testing zone of immediate resistance.


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