Andrews Pitchfork Indicator Explained -- with David Moadel
hey folks and welcome to looking at the markets with David Modell today I'm
going to teach you the basics of Andrews pitchfork it's a very interesting name
for a market indicator and I've seen it mostly used on daily candlestick charts
for swing traders long term traders medium term traders that kind of thing
but I suppose it could also be used for intraday trading as well although I'm
not sure if it's quite as powerful or as commonly used for that purpose all right
and before I get started if you would like some coaching for your trading or
investing I do offer that you can email me for the coaching at David Modell at
gmail.com and if you like these technical indicator videos why don't you
give me a thumbs up right now in this video and that'll encourage me and let
me know that you'd like to see these kinds of videos alright let's go to
stockcharts.com I want to give them credit and perhaps there are other
platforms and websites that have Andrews pitchfork but you'll have to check on
your own platform or software website to check on that to see if they even offer
Andrews pitchfork but here it is on stockcharts.com they do offer it but I'm
gonna have to show you exactly how to find it ok because it's not in the list
of overlays and indicators and all that stuff alright so first you put up the
stock chart this one's Home Depot daily candlestick chart and then you go below
the chart and you go to a notate you see where it says there all right so it's
considered an annotation on stock charts calm and so you click on annotate and
you're gonna get all this stuff here ok and then you see that rainbow there I
call it a rainbow a bunch of curvy lines three of them I'm gonna click on that
rainbow looking button there and you get Fibonacci retracement and all kinds of
cool stuff now I'm gonna have to hit on my keyboard control - control - control
- until I finally get Andrews pitchfork there it is okay
I actually I actually had to make this make everything smaller on the screen in
order to see Andrews pitchfork but here it is okay
so the rainbow button and then Andrews pitchfork click on that one alright and
now I'm gonna go ctrl+ on my keyboard ctrl plus a bunch of times until my
chart is back to normal size okay I'll make it even bigger there you go nice
and big for you okay and unfortunately you have all this stuff here and I I
can't get rid of that it is what it is alright so what is the Andrews pitchfork
well what it is is it looks kind of like a pitchfork as you'll see in a moment
and it connects the overall trend it kind of draws a line through the overall
trend through the candlesticks okay and so what you're gonna have to do is and
this is this involves a lot of interpretation okay this is something
you're gonna have to learn to draw your self unless you have software that'll
draw it for you but even then you're gonna have to
probably identify a line that goes through the overall trend of where that
stock is going where the candles are and you can kind of see it if you just look
at the lower left and connect that with the upper right that's the overall trend
line assuming and that's going up okay maybe it's going sideways maybe it's
going down but just from where it starts on the chart and where it ends that's
the and you draw the trend line right through the middle and it's also going
to give you not only the the mid line through the middle but also you're going
to have to identify the highest swing high and the lowest swing low on the
chart and so you're probably going to want to have a chart if it's daily
candlesticks like this is around six months worth five or six months worth of
daily candles okay if you don't have that much it might not be enough to
really identify a long or medium-term trend for daily candlesticks alright so
you want to make sure you have enough candlesticks on there not too many but
enough a decent amount that you can actually identify these trends alright
so what is the swing high well you see how the the candlesticks you know they
swing upwards okay so you want the peak of that that's the swing high and then
it swings downwards and that's you know the bottom of that is the swing
low and then it swings high the peak is here then it's swung low again and the
bottom of that is here and then swung high again so what is the biggest swing
high well really it's this one but I would consider the really the biggest
one to be that one that's a huge swing high okay so not necessarily the highest
price because that's just going to be the latest swing high probably okay it's
not always the the most recent one you want the most prominent one the one that
really sticks out okay the just the the huge move this is a pretty big move too
but this is a big big move okay and what's the lowest swing low well I mean
the lowest one is going to be probably the earliest one okay like this one or
maybe this one but those aren't big swing lows so you want the the really
big one I mean it took a big Home Depot stock took a big dive here I consider
this to be the lowest swing low not the lowest in price necessarily but the the
biggest move okay so look for the biggest swing high in terms of the size
of the move and the biggest swing low in terms of the size of the move okay so
we're going to call this the swing high we're gonna call this the swing low and
the midline goes right through the middle of the overall price action from
the the beginning to the end okay in terms of time that's that's the best I
can explain it and so on stockcharts.com you would click on where the trendline
generally starts it's not necessarily gonna be at the bottom it kind of goes
through here as I see it so it kind of starts around here okay then it puts a
little dot there a little yellow dot if you can see that and then you can either
click on the swing low and then the swing high or the swing high and then
the swing low it doesn't matter the order now doesn't matter for the the two
swings okay I'm just going to click after you click the the beginning of the
overall trend mid line now you you want to click on the the swing let's say the
swing high first that's okay you could also do this wing low first I'm gonna
click on the swing high including the wick alright not just the body of the
candle the wick okay BAM there it is yellow dot and then I'm gonna quick
click on the bottom of the swing low including the wicks which is around
let's say here and there it is look at that it
automatically after you you identify three points through three clicks then
it draws it's pretty cool for a free website it's free right now and it's
pretty cool that it drew the pitchfork for me just automatically alright and
you can adjust these things you can click you know grab it and drag it you
know the the swing high right and the swing low in case you miss case you do a
bad job of you know I click the wrong place okay and then you can you know
let's say the trendline may it maybe you know you can kind of adjust it I'm kind
of seeing it as around let's say I kind of want it to go through up to here it's
about there let's say I'm gonna adjust it as best as I can
I'd say that's that's pretty close to the overall trend okay so that's the
midline going going through the the general trend of where the stock it went
and then the highest swing high the lowest swing low in terms of price moves
and there we go you get a nice-looking pitchfork there and that will give you
not only the mid line where you can expect it maybe to kind of center around
in the near future that's the mid line okay so because it
doesn't stick to the mid line that closely but it always seems to come back
to it otherwise it wouldn't be a mid line would it alright and so perhaps I
might expect it to to want to come back to that mid line in the future I can
extrapolate that perhaps and this does not work perfectly it does not work 100%
of the time okay no indicator dies as far as I know but it can kind of help
you to predict maybe a little bit all right
and then the swing high provided the up the it's kind of like a channel here the
the upper line and the lower line so this line could be interpreted as
resistance in the future okay and this line could be interpreted as support
alright and so you have a channel between this line and that line and it
looks kind of like a pitchfork doesn't it alright it's pretty cool and so we
might think okay in the future if we can extrapolate if
if the candles reach the upper line that could be a good possible time to sell
take profits right and then if it hits that bottom line it could be considered
support a place to buy or you could look at it differently you could say uh-oh if
you get a big red candle below this support line here of the channel that
could be considered bearish so it depends how you like to play the channel
that's up to you how you interpret channels but it establishes a mid line
that the candlesticks might keep coming back to because it's done it in the past
and a channel where you get a possible support support and resistance all right
and take some practice to be able to draw these lines and so I recommend
practicing before you try to apply any real capital to this I'll give you one
more example with Johnson & Johnson daily candlestick chart once again let's
see where would you draw the the mid line
all right well probably probably from here through let's say here again it
doesn't have to hit that last candle okay because I I see it kind of going
from here right I'm sorry actually you have to I have to start over so I'm
going to click that annotate button again okay and then let me hit control -
so I can see what I'm doing pull out a little bit and there's that rainbow okay
and control - on my keyboard so I can see what I'm doing because it doesn't
show everything on my screen there it is Andrews pitchfork okay and then let me
hit control + on the keyboard a few times so I get a nice big chart here
that we can both see there it is okay all right so so let's see so I've
decided I'm gonna put the first yellow dot here for the beginning of the mid
line let's say around here and you and you can adjust it later and then I'm
thinking it goes up probably probably through here right if I were to draw a
straight line which I'm going to do what's the biggest swing high mmm I'd
say the defining one is around here I mean it had a big swing here
I'll try both okay I'm gonna put it here for the swing high I'm definitely
putting the swing low here including the wick by the way all right let's see how
that looks first I'm going to I'm going to adjust
the the trend line a little bit there we go
okay just to get that overall trend seems to go through here let's pull this
back a little bit see if if we put the yeah I don't know if I like that too
much mmm I mean it's okay and then we put it here I'd say this is probably a
more reasonable pitchfork looking pitchfork so you want to play with it a
little bit if I put them you know the yeah the swing high of the pitchfork
here that's a very strange-looking pitchfork it's very angular I mean I
could use this it's possible but as you can see that the candles don't even come
close to the to the resistance line here it's so far away whereas if I put it
here yeah the candles are coming much closer
to that that that resistance line here okay so yeah I mean the prongs of the
pitchfork aren't as big okay but still I like this better and so I'm gonna use
that and I definitely see the the swing low here for sure alright so and we can
extrapolate and we can maybe kind of do a little bit of adjusting here with the
overall mid line I kind of like it like that
and you adjust it until you like it and yeah I could see that being the mid line
okay and the price action always seems to sooner or later come back to it or at
least it did in the past right kind of centers around it's it's clean clinging
closely to it here because I adjusted it that way
and yeah so this could be your resistance line this could be your
support line you've got the channel here the midline of the channel could be
helpful and yeah you can interpret the channel how you will alright so that's
how I interpret the Andrews pitchfork maybe you have your interpretation so
feel free to leave comments below this video
give me a thumbs up right now if you liked it and you want more videos like
this and if you haven't subscribed yet why not do that right now okay and hit
that notification bell so YouTube can notify you whenever I put out videos
like this if you want the coaching go ahead and hit me up by email at David
Modell at gmail.com I've helped a lot of traders and I think
I can help you too all right thanks a lot for watching and listening I'll talk
to you again soon