Andrews Pitchfork Indicator in Forex Trading

by Vahid | Forex Market Analysis and Signals, Technical Analysis | Thursday, January 7th, 2010

After reading the below article about Andrews’ Pitchfork, please scroll down and read the today’s forex market analysis. We are waiting for an important news release today at 8:30am EST. I have explained about the effects that it may have on USD value.

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The below article is chosen from the Forex market analysis we had on our members area on Aug 02 and 03, 2009:

(August 02, 2009) As you see I have used a different tool to find support and resistance lines on USD-JPY 4hrs chart. This tool is called Andrews’ Pitchfork which is accessible in MT4 platform. I learned to use it from a good friend of mine who is also a member here too. Thanks to her!

Andrews’ Pitchfork is a good tool when market moves inside a channel and support and resistance lines don’t work properly and mislead us. As you see Andrews’ Pitchfork has three parallel lines. The upper, lower and middle line. Andrews’ Pitchfork theory says you go short when price is below the upper line and you go long when it is above the lower line (green zones). Middle line is an indecision area (yellow zones). When support is broken (like what we have now), it should go down. Also when resistance is broken, it should go up. Install the profiles on your MT4 and see how and where I have plotted the Andrews’ Pitchfork on USD-JPY 4hrs chart.

(August 03, 2009) Yesterday I talked a little about Andrews’ Pitchfork I had plotted on USD-JPY 4hrs chart. Since I have plotted the Andrews’ Pitchfork on USD-JPY 4hrs chart, it has showed us two long trade setups (green arrows).

I have showed you the three points that you should have to plot the Andrews’ Pitchfork. The first point is the axis of the channel and the other two points are a visible high and low. Please scroll down to see one more thing about Andrews’ Pitchfork.

As you see there are two Andrews’ Pitchforks on the below chart. The upper one is the one we already had on the chart. The lower one is the duplicate of the first one. The same points, size and angle.

If USD-JPY breaks below the first Andrews’ Pitchfork lower band, it will go down, at least to touch the second Andrews’ Pitchfork middle band and maybe lower band. This is one of the other Andrews’ Pitchfork trading rules.

How to plot Andrews pitchfork on the price chart?

Please watch a short video about it:

USD:
Unemployment Claims 8:30am
GBP:
Asset Purchase Facility 4:30am
Official Bank Rate 7:00am
CHF:
CPI m/m 3:15am

USD-CHF: (07 January ; 03:00am ; EST)

Today we will have the US unemployment Claims at 8:30am EST. As I stated on Nov 1st last year (EUR-USD), high unemployment rate is something that Eurpean countries and also USA will suffer from for a long time, as the side effect of the economic crisis. It is expected that USA unemployment Claims goes from 432K on the last month, to 449K which is almost a big difference and it may cause USD to go down strongly. If so, USD-CHF should break down the support level at 1.0260.

Further Reading:

2 Comments:
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Comment by King

2010-01-09 09:49:33

Hey Vahid
Where can I find this mt4 file?

Reply to this comment

Comment by King

2010-01-09 09:52:30

Ok, I found it……Thanks

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