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What are Median Lines (Andrews Pitchfork?)

01 Median Line

Median lines, also commonly known as Andrews Pitchfork is a drawing tool used in technical analysis of the financial markets. The median lines are used to draw a channel to the price action. It comprises of three lines, the two outer lines and the median line itself.

By plotting the median line, day traders can identify dynamic support and resistance levels. In other words, the outer median lines tend to act as support and resistance levels. The median lines can show a possible reversal of the trend.

You can apply the concepts of median lines across any financial instrument and any timeframe of your choice.

How to draw the median line?

The Andrews Pitchfork or median line is a commonly available tool among all technical charting platforms. The name comes from the pitchfork design of the median line. To draw the median line, you need to have three reference points.

Point 1 is the starting reference point. This can be a pivot high or a pivot low. (note that if you select a pivot low, it will suggest that the pitchfork will be inclining upwards). Similarly if you select a pivot high, it will indicate that the median line will be sloping downwards.

Thus, from choosing the point 1, you will be basically setting up your bias. In other words, by choosing a pivot high or a low, you anticipate that the prevailing downtrend or uptrend will either continue or reverse direction.

Once you select the point 1, the next step is to select the alternating high or low. So for example, if your point 1 was a high, your point 2 should be a low. Finally, the point 3 alternates back to the pivot high.

It is important to note that point 1 should always below lower (or higher) than point 3.

Using the median line, once you have the three reference points connected, the median line channel is automatically plotted.

The outer lines act as support and resistance. You can use this information to validate that you have plotted the median line correctly.

The chart below gives an example of a median line.

02 Median Line

Drawing a Median Line

Rules of price action in Median lines

There are some simple rules that are formed after you have plotted the median line.

Rule 1: When price touches the outer median line, if it reverses, then price will typically touch the median line

Rule 2: When price breaks past an outer median line, it suggests a possible shift to the trend’s direction. This can be merely a correction or a change of trend indeed.

Rule 3: When price fails to reach the median line, it quickly reverses to retrace back to the outer median line.

The median line’s reference points also act as support/resistance levels. Thus, you can plot a horizontal line across these points to visually set up the key price levels.

Take a look at the chart below which illustrates some of these points.

03 Median Line Trading

Trading with the Median line

In the above chart, you can see that after price rallies strongly to test the outer median line, it reverses. This indicates that price will now likely move to the lower median line, which it did.

After this, price attempts another rally but fails at the median line. This results in a quick reversal of the median line failure as price reaches the lower median line again.

Finally, a second attempt is made after price rebounds from the lower median line. This too fails and in the process, price action forms a double top pattern.

This suggests that prices will now move into a correction to the uptrend.

As you can see, prices indeed move lower, validating the double top pattern.

Difficulties in using the Pitchfork tool

One of the biggest drawbacks of using the Pitchfork tool is that it takes a lot of practice. There is no simple way of drawing the perfect median line channel. However, the easiest way to overcome this is to plot and adjust the median line until you see prices respecting these three lines.

Due to the subjectivity involved, traders tend to avoid using the median line or even using it incorrectly.

Once you have mastered how to draw the Pitchfork tool correctly, with due practice you can start to apply the three rules mentioned.

Benefits of using the Pitchfork tool?

The Andres Pitchfork or the median line tool is simple in the concept. If you like price action then this tool will no doubt become your favorite. The Pitchfork tool can be used alongside other price action patterns such as double or triple tops/bottoms and so on.

Due to the fact that the pitchfork tool can be used in any markets and any timeframes, you will find this tool to be very handy when it comes to price action based techniques.

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