in the previous video we saw that
the trigger line could act as a strong support or resistance barrier, causing
the price to reverse and change its trend but the function of the trigger line
is not limited to this application only in addition to acting as
support and resistance zones trigger lines can also be used as breakout signals as a general rule, when in a bullish
pitchfork, if the price cannot reach the median line and reverses, a sell signal is generated
when it breaks the lower trigger line or (L-TL) in fact the lower trigger line has two roles
in the market. on the one hand it acts as a support area and on the other hand, when it
breaks, it plays the role of a resistance area this example uses the recent Bitcoin chart using three valid fractals A, B
and C, we draw a classic pitchfork the price moved up from the pivot point
C but could not touch the median line and again after the descent, it has broken
the lower parallel line of the pitchfork this breakout can be considered as an early
warning for the possibility of the lower trigger line breakout. after the price has
struggled with the trigger line for a while it moves away from it by forming a powerful
bearish candle, which gives us the final signal for going short. we can place our stop loss
above the top of the latest fractal in the market and select points C and A as
our first and second targets respectively as you can see the market
has touched both of these levels so we could make a good profit by going short,
while most traders in the market were losing money this strategy also applies to
a falling pitchfork as follows: when in a bearish pitchfork, if the price
cannot reach the median line and reverses a buy signal is generated when it
breaks the upper trigger line or(U-TL) in fact, the upper trigger line has two roles
in the market, on the one hand it acts as a resistance area and on the other hand when
it breaks, it plays the role of a support area in this example using three valid fractals
A, B and C, we draw a classic pitchfork the price moved down from the pivot point
C but could not touch the median line and again after the ascent, it has broken
the upper parallel line of the pitchfork this breakout can be
considered as an early warning for the possibility of the upper trigger line
breakout, in this case the price has pierced the trigger line by forming a powerful bullish candle
which gives us the final signal for going long we can place our stop loss below the
law of the latest fractal in the market however, we are almost near point C, so we
cannot use this level as our exit point so we choose to point A as
our ultimate take profit level one of the essential matters to consider
when trading a trigger line breakout is the slope of this line. as we mentioned
earlier the trigger line is drawn based on connecting pivot points A to B or C. the
closer the distance between these points the smaller the slope of the trigger
line and vice versa. in other words it is the length of the pitchfork handle that
can determine the slope of the trigger line the shorter handle creates a smoother slope
while the longer handle forms a steeper slope by changing the base point position, the
distance between the median and trigger lines also changes if we assume that our stop
loss should be below the median line the shorter the distance between the median line
and the trigger line, the lower our trade risk therefore if we choose points C and
A as our fixed take profit levels the reward to risk ratio will increase
and this trade setup will be more sensible conversely the greater the distance
the lower the reward to risk ratio of course we can not intentionally draw a longer handle for the
trigger line to get more closer to the median line as discussed earlier the base point must be a
valid fractal and the quality of the pitchfork depends directly on the price reaction to it.
so with all of this in mind, choosing point A3 as the base of the pitchfork
provides us with a better option one way to help you know the quality of
your pitchfork before the next market move is to use the extension technique. in this method,
first draw your pitchfork based on chosen fractals you should also draw warning lines
above and below the pitchfork then extend all the pitchfork lines to the left
so you can check the market reaction to them if extended lines in the past cause the market
to react, they can also be effective in the future accordingly, parallel lines of the pitchfork
that have previously served as support and resistance areas, are more reliable than those
that have not had such history in the past this technique can also be
used in an ascending pitchfork in this example which is again
related to the recent Bitcoin chart we draw a standard pitchfork using three valid
fractals and after drawing the warning lines we extend all the pitchfork lines to
the left, so we can analyze the market's reaction as can be seen in this example, the price
reacted to these lines many times in the past promising the credibility of the pitchfork then by continuing the price movement, we
realize that our pitchfork has remained to be very efficient as expected and the price
has appropriately reacted to the median line the lower parallel line and the lower trigger line, so
we can use them to create a good trading strategy if you enjoy this type of content and
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