Wednesday, April 17, 2024

Schiff Pitchfork

Schiff Pitchfork is a drawing tool for technical analysis derived from the standard pitchfork called Andrew Pitchfork.

A standard pitchfork consists of three basic components.

There is a center midline (trend line) and two other sets of lines above and below the midline .

Additional lines are set to a specified number of standard deviations from the median.

The Schiff Pitchfork is different in that its origin position is modified from the standard Pitchfork.

Alan Andrews, creator of the Standard Pitchfork, works with many traders teaching his Pitchfork method.

A New York trader named Jerome Schiff came to Andrews with a hypothesis: In many cases, when prices are in a small upward or downward trend, pitchforks are It will get steeper.

So Schiff devised a way to make the fork predict a shallower path.

This variation of the

Pitchfork is called the Schiff Pitchfork.

The origin of Schiff’s pitchfork is located at 1/2 the vertical distance and 1/2 the horizontal distance between the high and low points (the first two point sets).

Schiff’s Pitchfork (like Andrew’s Pitchfork) is created by first drawing a trendline between two extreme points.

The third point is then set above or below the second point depending on the analyst’s desired Schiff pitchfork position.

Remember that the default Schiff Pitchfork settings require drawing another two sets of lines.

The basic idea behind using Schiff’s Pitchforks and Standard Pitchforks is that it essentially creates a Trend Channel.

As long as price remains within the Schiff Pitchfork Channel , the trend is considered active.

A

reversal occurs when price breaks out of the Schiff Pitchfork Channel.

If you want to learn more foreign exchange trading knowledge, please click: Trading Education.

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