Trade in Forex Using Andrew’s Pitchfork Method
Summary: What do you understand about Andrew’s Pitchfork method in forex trading? Learn this in this article
Dr Alan H. Andrews is among the famous forex traders who invented Pitchfork Method for traders to make profit and find opportunities in this market. This is a method to observe the overall trading market and find the fundamental technique in making money in forex trading. So, here is the basic information on how to use this method.
First of all, you can trade by applying two techniques called trading outside the lines and trading within the lines. Pitchfork actually applies a middle line, also known as median line, between the highest and lowest pitch line. In his theory, he believes that for long term trading, almost 80% of the time, the market price will move towards the median line and the rest will be the unforeseen fluctuations. A trader can always use the opportunity when price stray due to sudden change in the market to make profit.
So, how do we apply Andrew’s Pitchfork method? First of all, get the trend chart. Identify the first point, either the trough or peak. Then, select another two points; one line which connects the peak and another line which connects the trough. These two lines serve as the resistance and support. From the chart, a trader can actually decide easily whether to trade within the line or outside the line. It is actually easier for you to determine the right time to buy and sell currency.
You need to study the trend well before deciding on which technique to apply. It is quite complicated, so for beginners, it is recommended to break the technique into steps so that you can understand it better. First, you need to identify the median line. Then, test the prongs and place an entry.
This is usually being applied for U.S dollars pairs where the currency price moves in trend. It would be more effective if you can combine it with other techniques such as textbook analysis or money management method.
This entry was posted on Monday, February 22nd, 2010 at 1:02 pm and is filed under metatrader indicator. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
