Best Thread learning to read price action with p/f charts

SM_1

Junior member
48 6
Good stuff, how long you been using P&F? I have been studying this method for a while, not very good at it yet though, but I really love this method. I often see this pattern, not sure if anyone else has, or if its been written about before, it happens on both upside and downside, will jump up/down, consolidate in a clear range then quickly go back down/up then continue to bounce in the original direction, nearly everytime I have seen it, it does it.

Do you ever see such a thing?
 

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charliechan

Experienced member
1,008 119
always been meaning to look at p&f, but never really got round to it.

out of interest, is p&f the same as the charts richard wyckoff developed?
 

Traduk

Active member
102 19
Good stuff, how long you been using P&F? I have been studying this method for a while, not very good at it yet though, but I really love this method. I often see this pattern, not sure if anyone else has, or if its been written about before, it happens on both upside and downside, will jump up/down, consolidate in a clear range then quickly go back down/up then continue to bounce in the original direction, nearly everytime I have seen it, it does it.

Do you ever see such a thing?
I attended two all day courses in London in 1992 on P&F and advanced P&F and have been using it ever since. In the format you are using (1point box X 3 reversal) it gives a good over-view of the e mini S&P.

I see that you use MarketDelta. What data do you feed it with?. The reason I ask is that at the point of the break out and retrace I have a different display at 1060. I use CQG and in the 1 point X 3 it will only create a zero on a full point and not until a full point has been printed. The market went to 1060, bounced to 1065 and then back to 1060. That gave me an unambiguous double zero print at 1060 with a print in between of X's reaching 1065. I have verified that the sequence was accurate on candles and ticks.

The e-mini does that type of pattern when it has been stuck in a range and gets an excuse for a break-out. I think that the cause was the rumour that the EU was preparing a relief package for Greece and the subsequent decline was when the rumour was denied by a German official.

What is important to an analyst is not the reason but what intent was displayed. The market achieved an upward break-out but with no follow through. The subsequent decline did not challenge or take out a major low to the left of the action. With three major congestion area lows untouched to the left, the way was clear to launch an upward push to the upside and 50+ points has been the progress so far.

P&F is an excellent way of filtering data to show what needs to be seen and if correctly configured can keep a trader on the right side of trends. One factor IMO reigns supreme in all forms of TA and that is that anything must be with reference to what it has done with reference to support and resistance to the left of the action. That 1060 is an example as it was a fall from a break-out but failed to challenge three lower lows.
 

Dentalfloss

Legendary member
57,718 3,527
always been meaning to look at p&f, but never really got round to it.

out of interest, is p&f the same as the charts richard wyckoff developed?
wyckoff.is one box reversal.the one step back method of construction.very useful for seeing s/r.also,best to use his method of charting when you calculate horizontal counts for continuation patterns
 

Dentalfloss

Legendary member
57,718 3,527
to any readers..lets look at the basic signals
bullish and bearish signals.pattern
The Chart Formations
The Bullish and Bearish Signals

Technical analysts attach particular weight to the fact that a market makes a higher low than a low made on a previous occasion. The inescapable conclusion is that the enthusiasm of the buyers has increased and/or the enthusiasm of the sellers has waned since that previous occasion. It is positive price action.
In its initial formation the bullish signal is nothing more than a double top formation with a higher low.



courtesy of marcrivalland.com
 
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Dentalfloss

Legendary member
57,718 3,527
a chart that shows bullish and bearish signals
dow 15 minute data.20 point box size b 3 reversal

 
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timsk

Legendary member
7,306 2,093
Hi dentist007,
One of the 'classic' P&F formations I've never been comfortable with is the High Pole. Will you be tempted to go short around 10,220? I'd sooner wack in a short now, while price is near the top (probably!) on the grounds that it's likely to at least retrace some of its gains before advancing much further. What's your expert view on these things?

The thread's shaping up nicely; are you going to get into developing a simple trading strategy based around P&F charts in due course? I hope so!
;)
Tim.
 

Dentalfloss

Legendary member
57,718 3,527
timsk...we dont want to jump the gun ..
just wait awhile and it will all fall into place nicely
i shall say something now,that you wont find in any book..the key to it all is how you present the data on the chart.usually,the audience will just be youreself.but what you should do is imagine you are presenting the chart to an audience.you want to get the meaning across.the simpler the better,so what you have to do is change box sizes to get the best presentation.in fact even change time plot.ie for intraday,start with 1 min ,then go to 5 min.as you get to a higher timeframe then increase the box size.then you will be able to see the price action emerging in a readable form
here are 2 charts of the nas 100.



IMG]http://i49.tinypic.com/2805w1y.png[/IMG]
 

Dentalfloss

Legendary member
57,718 3,527
both charts are 1 minute data plot.they have different box sizes.the first one is only a small bit of help.the second is more informative
 
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Dentalfloss

Legendary member
57,718 3,527
so..we are looking at the presentation of the chart.
you need to look for the chart that gives you some useful information.it might not be there,so if you dont see it...then its not there
then,look at the bias of the chart.we know what a bulish and bearish signal looks like...now for a sweet little trick,which i subconsciously had in my mind but was alerted to it,and made it a must when taking a first look at a chart..thank you for this to mike at cla alloys in houston
the signals MUST be consecutive.otherwise,there is too much chop
so look for CONSECUTIVE rising lows and double-tops..bullish
vice versa for bearish
do this for the last two signals on the chart.if they are consecutive ,you have a chance of some trend and putting on a trade.applies to all box sizes..and time plot
 
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