Joseph,
You start having me explain the use of trading tools and you will make the Bear sound much smarter than He is. The Best place I know to go for info on Pitchforks is Mr. Tim Morge, check out Medianline.com. He is imho one of the best in dealing with them forks.
Must say. He is in the middle of transferring his website to a different server, so some of the extras on his website may not be assessable, but all this should be completed soon, and there you can join a forum that discusses Pitchforks in detail. There are in addition, archives of Tim’s own posts on trade setups. It’s very good and well worth the time to study.
To me, the use of pitchforks, asserts the assumption that future price direction is in relation to the past, this idea in itself has caused much heated debates and a few small armed conflicts…..
Pitchforks basically mark the angle of future price from 3 different consecutive reversal points and define it by the use of a central (median) line and a set of equidistant upper and lower parallel lines. Statistics show that price (from the 3rd or last reversal point) will make the median 80% of the time.
As for me personally the only real help I can give is to use reversal points of the same degree. Others like to see a pitchfork define price activity before validating a setup. I like to use the forks in combination with EW to find reversal points for the next wave.
How to use them is a matter of personal preference, like most good tools there are several different techniques or styles that can be employed dependent upon the traders personality (aggressive or reactive) I will leave you to your own study, but some basics are as follows.
More to come……
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