a pitchfork discussion

I've been a fan of pitchforks for a while now after being introduced to them by totterdell91 here on Hot Copper. Currently I'm guardian of Integrated Pitchfork Analysis which I'll return to t91 soon so he can pass it on to the next willing student.

As much as I've learnt from t91's charts and the actual book itself, it's made me realise that despite the hundreds of pages of proven examples, ultimately it comes down to your own application and "fitting". A rebel at heart, I'm always looking to test and stretch the rules, or in this case to be improve them, or amend them.

My first realisation has been that the key to pitchforks is the concept of equidistant parallel lines (which I've drawn on many charts). The advantage of the pitchfork has been to use important points on the chart, usually highs or lows, to obtain or pre-empt the "angle" of the parallel lines. From what I've seen so far, the pitchfork is a formidable tool at framing price action.

Another key thought process when charting is to always look for the best fitting lines. There has been mention of anchoring the pitchfork handle to gaps and also by applying the Schiff rule or modified Schiff to anchor the handle, as an alternative to the basic high/low/high formation. This works well when a "normal" fork just doesn't look right.

As I don't trade stocks, I often give my charting opinion to a group of trader friends for the stocks they trade. It was during charting one of those stocks (SSN) that I found an amazing fitting pitchfork using the bottom of a breakaway gap for the fork's second point (P1).



With the above chart as a mental template, I looked at other stocks that I remembered as having breakaway gaps and the results have been nothing short of astounding. I'm sure there are more great examples but as I'm not that familiar with stocks I don't know of them.

Below are more examples of using breakaway gaps as an anchor point for your forks.