Here's a charting method to determine market trend and identify reversal points to set up trading opportunities.
"When Alan Hall Andrews taught investors how to use what is now referred to as the Andrews pitchfork charting technique, he probably never envisioned that this aspect of his method would be found today in many technical analysis computer programs."
"Of all his work, Andrews is best known for the pitchfork, or median line method. This is a technique whereby a technician will pick an extreme low or high to use as a pivot point and draw a line, called the median line (ML); from there, the technician bisects a line drawn through the next corrective phase that occurs after the pivot point. Lines parallel to the median line are drawn through the high and low points of the corrective phase, hence the look of a pitchfork (Figure 1).
"The parallel lines define the resistance and support levels for the price channel."
Novices to the technique tend to assume that the lines will determine all future turning points and are disappointed when they do not. According to Andrews, the purpose of the median line is to determine the trend; prices typically make it to the median line 80% of the time. Figure 2 demonstrates that prices typically head in the direction of the median line, and in a strong market, touch the far parallel line."
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