This really is not a book about pitchforks, but in the next chapter I have several examples using the pitchforks that have become an important tool in our newsletters over the years. Without you having to get another book just to understand the pitchforks I’m going to give you a crash course and bring you up to speed.
It took me years to get interested in the pitchforks, yet they are included on just about any software package you can think of. Most traders are also aware of the pitchforks, which are also known as median channels, but when asked why it isn’t a regular part of their game plan, the answer I hear most is, “I don’t know.” I think the real reason is it is a mysterious discipline that requires careful study and there are only a handful of great instructors in the world. The other reason is people really don’t understand how to draw a pitchfork properly.
We believe the best use of a pitchfork is as a GPS navigation system to understand the pattern. For example, look at the following YM chart in Figure 11.1.
How difficult is it to navigate the pattern on this five-minute YM chart? It certainly isn’t easy. But look at the next chart and cloudy becomes clear and uncertainty becomes certain. Do you think this method can help you understand the pattern better?
We believe the median channels are an indispensable ...