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; Originally Posted by dentist007 Hi Malaguti mine"s a pint of Stella Artois Done, we can get down to the slug ...

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Old Aug 17, 2012, 9:33pm   #313
 
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Re: learning to read price action with p/f charts

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Hi Malaguti
mine"s a pint of Stella Artois

Done, we can get down to the slug and next time we really don't talk about box sizes!!
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Old Aug 18, 2012, 3:21am   #314
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Re: learning to read price action with p/f charts

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Or of course you could do what I do..use updata, with intraday tick by tick, no downoading uploading all the counts are automatic and trendlies are automatic.
Visual inspection is the key, no "tuning" necessary..learnt that from the Dentist. I switch on my PC and as you say voila. Best P&F charting software there is.
Hey look. I think were on the same page anyway
Sure we are..(on the same page). Those are standard features of BEB4 too.. I highlighted for the sake of understanding.

On trendlines, would urge you to look at non 45 degree trendlines that touch at least three points on the charts. These are extremely effective for helping discover trend reversals.

And I really appreciate Dentists idea of drawing these lines on zoomed out views of the charts, before diving in back to the chart detail of interest. Price is generally seen to be bouncing of larger time frame trend lines and you can take advantage of that in smaller time frames. (time frame being more a place holder for the chart detail that you use - box size/bar width).

There is a problem in using pure tick data - as that tends to introduce noise, irrespective of box size and reversal boxes that you use. I also initially thought that this was not possible to control. While BEB4 can read data directly from my charting platform Amibroker, the tick level data does create the issue that I just mentioned.

So instead of using a direct data link to Amibroker, I started exporting data from Amibroker, first, manually, and then automated the process. By chosing 1min/2min/5 minute data bar intervals and varying the box size/reversals, there is a big change in the views of the PnF charts. Stick to high low parameters for viewing the charts. For intraday Wyckoff with 2 minutes bar sizes works good for me with scrip specific box sizes. (2 for an index of 5000 value, for example).

This process simplifies the "visual inspection" needed to effectively use PnF.

Comments, Dentist?
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Old Aug 18, 2012, 3:55am   #315
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Re: learning to read price action with p/f charts

Couple of examples to highlight the points made above including non 45 degree trend lines:
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Old Aug 18, 2012, 11:02am   #316
 
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Re: learning to read price action with p/f charts

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Sure we are..(on the same page). Those are standard features of BEB4 too.. I highlighted for the sake of understanding.
I know, I've used BEB, but updata does everything for me..its automated. computers eh?

On trendlines, would urge you to look at non 45 degree trendlines that touch at least three points on the charts. These are extremely effective for helping discover trend reversals.
Its covered in pages 176 to 199 in duplessis book..your examples are great, but I understand duplessis also

And I really appreciate Dentists idea of drawing these lines on zoomed out views of the charts, before diving in back to the chart detail of interest. Price is generally seen to be bouncing of larger time frame trend lines and you can take advantage of that in smaller time frames. (time frame being more a place holder for the chart detail that you use - box size/bar width).
I use different charts for different timeframes in all honesty, and I'm not a fan of subjective trend lines by their very nature they are subjective. some of your charts below actually highlight my argument..anything shallower than 45 is in my opinion not a good indicator of the trend..ala Gann and the two main trend lines are the 1x1 (which is 45degrees) and the 2x1. But this is a debateable issue. what works for you, may not work for others. Take another look at your 123 trend line touches..they dont actually touch..just one does at 1 and another which you havent marked at the end. If you were to draw those correctly the price at 3 may actually go through the trend line..does that mean its ended, are you going long..which high..which low are you going to use...they are subjective as not even in your own analysis can you decide, hence I prefer to stick to 45s wherever I can

There is a problem in using pure tick data - as that tends to introduce noise, irrespective of box size and reversal boxes that you use. I also initially thought that this was not possible to control. While BEB4 can read data directly from my charting platform Amibroker, the tick level data does create the issue that I just mentioned.
Look at my charts again Abnash, you will see I condense tick into 5minute, hourly etc and the point is covered on page 104 of duplessis

So instead of using a direct data link to Amibroker, I started exporting data from Amibroker, first, manually, and then automated the process. By chosing 1min/2min/5 minute data bar intervals and varying the box size/reversals, there is a big change in the views of the PnF charts. Stick to high low parameters for viewing the charts (here I disagree, I will use high low but I will ALWAYS refer back to the close chart as that is my gaspel) pages 92-93. For intraday Wyckoff with 2 minutes bar sizes works good for me with scrip specific box sizes. (2 for an index of 5000 value, for example).
I use updata, so does duplessis..i think ive said enough now on this
This process simplifies the "visual inspection" needed to effectively use PnF.
Disagree, so does duplessis..I would urge you to read his book. I'll quote
"Only YOU can decide the data series and box and reversal sizes as it is dependent on what YOU wish to extract from the chart

Again, I learnt this one on one with the great man who started this thread

Comments, Dentist?
Now, I know this appears somewhat rude, but its not meant to be...
What this thread needs is more input and debate from others so I welcome your comments, as im sure Dentist does, but more charts rather than preaching..more real life examples, of how YOU analyse a chart is more welcome to me than somebody who just tells others what they can read for themselves.
Your following charts are great, thanks for those...this will no doubt keep this thread alive and encourage the debates that rage on even amongst P&F analysts.
If you can post a chart of something that is happening now, which may alert others to their potential might be a great idea..this is what Dentist is doing every day and is what I am trying to do in my own way whenever I can
Thanks though Abnash for your comments

Last edited by malaguti; Aug 18, 2012 at 11:16am.
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Old Aug 18, 2012, 5:10pm   #317
 
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Re: learning to read price action with p/f charts

Here's one for debate. Lloyds Bank hourly chart 0.5x1 showing multiple reversal patterns within what looks like a much larger traditional head and shoulders reversal

Is that not just a lovely looking chart?!
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lloyds-bank-reversals.jpg  
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Old Aug 18, 2012, 5:50pm   #318
 
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Re: learning to read price action with p/f charts

dentist007 started this thread hi malaguti & abnash
finally,this thread comes alive...great stuff
comments/thoughts
1.abnash
the charts you posted are too noisy..imho
they are not too clear cut
my own opinion is that you move around box sizes and reversals to analyse the trend
what i usually do is just look at the line chart first.define the trends from that i want to analyse
so for intraday fx i will look at the last 2-3 trends on the line chart.when they started and what levels
i will then go down to 60 min/30 and 15 min to pick up any minor trends..note these down as above
the line chart is close...no candles
we can then look at these trends in p/f format
with p/f...trendlines are constant price change per reversal/whereas on candles...trendlines are constant price change per unit of time..there is a big difference
hence trendlines are placed on the chart first
by moving around box sizes and reversals,we can pinpoint support and res for that particular time input
we can then divide the chart into bullish and bearish sections using the trendlines
on the charts i post i usually only display one or two trends...dont need any more
candlestick traders are too busy calling out levels and divergences..we have the advantage,that we can define trend arithmetically
so trendlines are 45 degree.or drawn on the right hand side of semi catapults/one box..subjective...min 2 touches
2.malaguti
dont be too specific with box sizes..they can change from week to week..
so 1.00 by 1 reversal/close could be 1.2 by 1 reversal hilo next week or next month
subjective trendlines..you must put in...45 degree lines can be clumsy in a fast market
does that all make sense ??

Last edited by dentist007; Aug 18, 2012 at 8:52pm.
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Old Aug 18, 2012, 6:39pm   #319
 
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Re: learning to read price action with p/f charts

dentist007 started this thread abnash
forgot to mention
3 point touch trendline....
better to use a bullish support line in an uptrend and a bearish resistance line in a downtrend,either 45 degree or subjective
then putting on internal trendlines nearer the price action
you can then see s/r more clearly
p/f charting is a method of analysing data...no more
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Old Aug 18, 2012, 7:35pm   #320
 
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Re: learning to read price action with p/f charts

2.malaguti
dont be too specific with box sizes..they can change from week to week..
so 1.00 by 1 reversal/close could be 1.2 by 1 reversal hilo next week or next month
I'm learning buddy
subjective trendlines..you must put in...45 degree lines can be clumsy in a fast market..point taken, but still too subjective imo
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