learning to read price action with p/f charts

This is a discussion on learning to read price action with p/f charts within the Technical Analysis forums, part of the Methods category; Thanks Dentist, I'll do the trendlines, but in honesty it was originally intended as an example of how to overcome ...

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Old Mar 31, 2012, 6:59pm   #193
 
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Re: learning to read price action with p/f charts

Thanks Dentist, I'll do the trendlines, but in honesty it was originally intended as an example of how to overcome the obvious conflicting bullish and beraish support. That you answered pretty convincingly with perspective. The last thing that requires more work from my side is choosing the box sizes and whether to go with a fixed point size or log scale which im sure comes with eyeballing.
I do notice you often print just the most recent price action and coincides with the answer again.
So you don't bother with high low methods then..i'll note that. And yes, there is no other way that you could draw a chart that so convincingly says up trend or down trend.. here's the S&P since the 80s... a long term view but amazing nonetheless
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Old Mar 31, 2012, 7:29pm   #194
 
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Re: learning to read price action with p/f charts

Quote:
Originally Posted by malaguti View Post
Dentist, how would you read a chart like this?
The most recent has a bullish support line, whereas a longer term bearish line seems to be the most prevalent. Do you wait for the last support line to be taken out or would you trade the forthcoming double bottom?
Hi malaguti and dentist007, I've noticed with your charts that you are not using the variable price scales that used on sites such as Dorsey Wright and Stockcharts P&F charts. Is there a particular reason for this I wondered?

For example to explain what I mean see the attached Barclays chart from Dorsey's site. The scale for price action from 100-199 is 2 boxes, but 200 to 499 is 5 boxes, which gives a double bottom sell signal but within an uptrend. See attached chart.
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barc_l-30-3-12.png  
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Old Mar 31, 2012, 8:01pm   #195
 
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Re: learning to read price action with p/f charts

Well my last chart was 1.5%, so it does take into consideration relative price and you get exactly the same using a 0.5% on barclays btw, its just a question of what works for you
cant think why I'd want to be limited to two ranges and distorting the chart, why not just have an infinitessimal system, 1 for 1 to 100, 2 for 100 to 200 3 for 300 ad infinitum..makes no sense to me but its what floats your boat i guess
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Old Apr 1, 2012, 7:44am   #196
 
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Re: learning to read price action with p/f charts

dentist007 started this thread hi malaguti
just a note..imho
if you do not breakdown the chart into bullish and bearish sections using trendlines then you have lost the advantage of using p/f
trendlines need to be placed first
then you look at patterns and signals
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Old Apr 1, 2012, 8:07am   #197
 
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Re: learning to read price action with p/f charts

dentist007 started this thread isatrader
dorsey wright is a very good sight
barclays chart...the hilo plot is not good for this instrument.there is an intraday spike,which is eliminated on the close plot
so imho confuses the price action
dorsey wright...3 box reversal is too clumsy for short term trading imho
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Old Apr 1, 2012, 9:16am   #198
 
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Re: learning to read price action with p/f charts

dentist007 started this thread eurusd hourly data
looks bullsih
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Old Apr 1, 2012, 10:32am   #199
 
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Re: learning to read price action with p/f charts

Dentist, my interpretation of the bearish and bullish zones..
Since the triple top buy signal crossing the hideous green line, it has been bullish. The last red prior to this marks the end of any bearish zone, except of course the most recent price action, suggesting a double bottom sell, if it wasn't for quite a lot of internal support lines, all at the customary 45 angle. My hand drawn are all in black
It seems to me as though any attempt to short Barclays would come come against quite heavy support.
In summary therefore I possibly shouldnt even be thinking of trading this from the short side, and wait for another buying opportunity, and getting out of any longs especially with the forthcoming sell signal?
Do you think I've read this correctly?

And do you give tuition in P&F by any chance, possibly something we could work out no doubt
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Last edited by malaguti; Apr 1, 2012 at 11:01am.
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Old Apr 1, 2012, 2:07pm   #200
 
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Re: learning to read price action with p/f charts

dentist007 started this thread Hi malaguti
good stuff..the trendlines tell you the story
it is the placement of the trendlines that will make you decide whether to trade..then just look for the signal/pattern
you will need to see the reaction of barc in the 230 zone before looking at shorts.also there is a big supp zone at 215 area
as you say there is no real confirmation of break of trend.so no shorts uneless scalps imho
tuition in p/f....well.there is very little to learn.the main thing which you have got now is placement of trendlines and interpretation...but am happy to help
meet either a saturday or sunday/late afternoon in kingston upon thames.there is a pret a manger near marks and spencer.you can buy the coffee"s
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