Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

RichardCox

Making Trades Using the Andrews Pitchfork - Pt. 2

Recommended Posts

In the next section of this article, we will look at the ways trades are placed inside and outside of the channel lines when using the Andrews Pitchfork.

 

Trading Inside the Andrews Pitchfork Lines

 

In the next sections,we will look at the various ways traders can profit from trading from within the lines that are drawn by the Andrews Pitchfork. The first attached picture shows prices in the EUR/USD moving off of the median area to hit the resistance prong in the Andrews Pitchfork at the second red arrow.

 

Looking closer at the price activity, evening star or doji formations will often become visible, giving traders another indication that the buying momentum is starting to weaken and suggesting a reversal is imminent. When this appears near the resistance that has been established by the upper end of the Andrews Pitchfork, downside moves can be expected. Additional confirmation can be had when using oscillators (such as Stochastics) which can help to verify this momentum is valid.

 

In these cases, trades could be initiated on the following candle with proper money management rules and an appropriate stop loss in place. In the chart example shown, large gains could have been recovered if trades had been placed based on this information.

 

 

Trading Outside the Andrews Pitchfork Lines

 

When looking at the Andrews Pitchfork, trading outside the support and resistance lines occurs much less often than trades that take place when prices are caught inside these areas. The positives of these types of trades is the fact that price moves can see major extensions once these activities is seen but at the same time there are negatives, as there are some aspects of these trades that are more tricky to anticipate.

 

Again, the primary assumption is that price action will move back toward the median line at some stage, just as this would occur when values are trading from inside the pitchfork lines. But at the same time, there is always the possibility that instead the market has shifted in terms of its general direction. In these cases, a break outside the Pitchfork lines would suggest that a new trend is on the way.

 

So, in order to avoid major losses, trading parameters must be constructed so that any retracements back into the channel can be captured (and capitalized on). At the same time, however, traders must look to filter (and remove) any adverse price movements that can result in a trade being closed too early (missing the profitable move).

 

In many cases, traders will be given several opportunities to place trades before prices actually move back into the overall trend slope. These typically are seen when prices are consolidating or caught within a shorter term range. The best opportunities, however, can be seen when the broader moves are seen, as these extensions allow for the most profitable trades.

 

Some traders will use oscillators to spot divergences in price activity, as this additional confirmation will help to reduce false moves. As always, entry levels are key and the combination of these factors can help to pinpoint areas for greater accuracy.

 

Placing Trades

 

So, when placing trades, we must first wait for a prong area to be tested. Prior to this point, trades should not even be considered. Without these tests, there is always the possibility that an oppositional trend is actually present and this can help to avoid being stopped out of a position. If prices break outside the prongs, we can consider trades based on the expectation that prices will continue in the direction of the break, as fresh momentum is entering into these markets.

 

Trades can be placed 25 pips above the initial line break with stop losses 10 points above or below the previous high or low of the session. These trades are based on the assumption is that the new momentum will lead prices away from the previous high or low and that those levels will not be seen again in the near term.

andrews_pitchfork.gif.c4c5c20c813200de582714305921c91e.gif

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 3rd April 2025.   Gold Prices Pull Back After Record High as Traders Eye Trump’s Tariffs.   Key Takeaways:   Gold prices retreated after hitting a record high of $3,167.57 per ounce due to profit-taking. President Trump announced a 10% baseline tariff on all US imports, escalating trade tensions. Gold remains exempt from reciprocal tariffs, reinforcing its safe-haven appeal. Investors await US non-farm payroll data for further market direction. Fed rate cut bets and weaker US Treasury yields underpin gold’s bullish outlook. Gold Prices Retreat from Record Highs Amid Profit-Taking Gold prices saw a pullback on Thursday as traders opted to take profits following a historic surge. Spot gold declined 0.4% to $3,122.10 per ounce as of 0710 GMT, retreating from its fresh all-time high of $3,167.57. Meanwhile, US gold futures slipped 0.7% to $3,145.00 per ounce, reflecting broader market uncertainty over economic and geopolitical developments.   The recent rally was largely fueled by concerns over escalating trade tensions after President Donald Trump unveiled sweeping new import tariffs. The 10% baseline tariff on all goods entering the US further deepened the global trade conflict, intensifying investor demand for safe-haven assets like gold. However, as traders locked in gains from the surge, prices saw a modest retracement.   Trump’s Tariffs and Their Market Implications On Wednesday, Trump introduced a sweeping tariff policy imposing a 10% baseline duty on all imports, with significantly higher tariffs on select nations. While this move was aimed at bolstering domestic manufacturing, it sent shockwaves across global markets, fueling inflation concerns and heightening trade war fears.   Gold’s Role Amid Trade War Escalations Despite the widespread tariff measures, the White House clarified that reciprocal tariffs do not apply to gold, energy, and ‘certain minerals that are not available in the US’. This exemption suggests that central banks and institutional investors may continue favouring gold as a hedge against economic instability. One of the key factors supporting gold is the slowdown that these tariffs could cause in the US economy, which raises the likelihood of future Federal Reserve rate cuts. Gold is currently in a pure momentum trade. Market participants are on the sidelines and until we see a significant shakeout, this momentum could persist.   Impact on the US Dollar and Bond Yields Gold prices typically move inversely to the US dollar, and the latest developments have pushed the dollar to its weakest level since October 2024. Market participants are increasingly pricing in the possibility of a Fed rate cut, as the tariffs could weigh on economic growth.   Additionally, US Treasury yields have plummeted, reflecting growing recession fears. Lower bond yields reduce the opportunity cost of holding non-yielding assets like gold, making it a more attractive investment.         Technical Analysis: Key Levels to Watch Gold’s recent rally has pushed it into overbought territory, with the Relative Strength Index (RSI) above 70. This indicates a potential short-term pullback before the uptrend resumes. The immediate support level lies at $3,115, aligning with the Asian session low. A further decline could bring gold towards the $3,100 psychological level, which has previously acted as a strong support zone. Below this, the $3,076–$3,057 region represents a critical weekly support range where buyers may re-enter the market. In the event of a more significant correction, $3,000 stands as a major psychological floor.   On the upside, gold faces immediate resistance at $3,149. A break above this level could signal renewed bullish momentum, potentially leading to a retest of the record high at $3,167. If bullish momentum persists, the next target is the $3,200 psychological barrier, which could pave the way for further gains. Despite the recent pullback, the broader trend remains bullish, with dips likely to be viewed as buying opportunities.   Looking Ahead: Non-Farm Payrolls and Fed Policy Traders are closely monitoring Friday’s US non-farm payrolls (NFP) report, which could provide critical insights into the Federal Reserve’s next policy moves. A weaker-than-expected jobs report may strengthen expectations for an interest rate cut, further boosting gold prices.   Other key economic data releases, such as jobless claims and the ISM Services PMI, may also impact market sentiment in the short term. However, with rising geopolitical uncertainties, trade tensions, and a weakening US dollar, gold’s safe-haven appeal remains strong.   Conclusion: While short-term profit-taking may trigger minor corrections, gold’s long-term outlook remains bullish. As global trade tensions mount and the Federal Reserve leans toward a more accommodative stance, gold could see further gains in the months ahead.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • AMZN Amazon stock, nice buying at the 187.26 triple+ support area at https://stockconsultant.com/?AMZN
    • DELL Dell Technologies stock, good day moving higher off the 90.99 double support area, from Stocks to Watch at https://stockconsultant.com/?DELL
    • MCK Mckesson stock, nice trend and continuation breakout at https://stockconsultant.com/?MCK
    • lmfx just officially launched their own LMGX token, Im planning to grab a couple of hundred and maybe have the option to stake them. 
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.