P&f Charts

stock trader

Junior member
24 1
I like to know if any of you use the Point & Figure method of charting, if so, how successufully do you apply it to your analysis and what other indicators do you use with if any, I some how find it a bit akward to get to grips with, I understand how it works but can not seem to apply it effectively to my trading method which is mostly swing trading UK Stocks - I would like to have the views from those of you that use P&F with reasonable success

many thanks

ST
 

dsmodi

Established member
509 2
Stock Trader,

This has been discussed elsewhere on this site - you'll have to search for the board, but there should be much there to interest you. Then, if you have questions, you can post on that board.

It just avoids the repetition we seem to be getting on some subjects recently.... But of course, by all means, keep on posting....
 

FTSE Beater

Experienced member
1,518 5
Hi Stock Trader

At the risk of duplicating threads. P&F trading is done in the same was as bar / candlestick trading. The main difference is that P&F tends to work better over longer time-frames. Maybe because I've only used it on EOD data.

You can still trade break-out's, reversal's, Tops and bottoms and Triangles - although I've never seen a triangle on P&F chart

If you need more info, then try http://www.pfscan.com/ It's got loads of links to more articles.

HTH :)
 

JonnyT

Senior member
2,560 22
What no triangles!

Triangle formations on P&F are often the best trigger to buy or sell IMHO. The other best signal is a reversal from a large trend IMHO.

If you have not seen one then maybe you have been using the wrong box and reversal sizes for the underlying object?

JonnyT
 

dsmodi

Established member
509 2
oh well - might as well enter the fray FWIW - u can even get realtime p&f through updata's TA software....
 

stock trader

Junior member
24 1
Oh Well!!
I might as well rephrase the question...How does one use P&F intelligently or skillyfully to benefit trading analysis, I am aware as to where I can acquire the data/software and the theory as to how it works, but of all the indicators, P&F is one I find difficult to apply to my trading practically, I use PFScan but the trigger or buy & sell signal seems to appear only well after the stock has performed and yet it is claimed to be one of the more accurate indicators.

Ps dsmodi thanks for your suggestion, I could not find the thread to P&F

regards
ST
 

Splurge

Member
88 3
Stock Trader - P&F is excellent for removing the time out of stock movements and as long as you follow the rules for setting box and reversal sizes (based on the range) it will provide excellent signals for medium to long term trades. It is carp for anything shorter imo (less than a week). No doubt I will be told otherwise now Ive said it.
 

Helenqu

Established member
841 3
Hi Stock Trader,


Here's a free course (which I did a while back) which will answer all your questions and more :)

http://208.149.108.63/cgi-bin/foxweb.exe/fwuniv

The classic P&F text is Dorsey on which P&F Uni course is based.

The book which Dave recommends (and I also think is more useable than Dorsey) is Michael Burkes 3 Point Reversal Method of Point and Figure.


Good luck. I like P&F and use Pfscan for UK FTSE100 stocks :)
 

Skimbleshanks

1
2,325 16
stock trader - there hasn't been a good Point & Figure thread for ages, so it is about time we had one and thank you for starting it.

I have the book Point & Figure Commodity & Stock Trading Techniques by Kermit (yes, really) Zieg - it's quite heavyweight which perhaps explains why I've never managed to plough my way through it.

Most of the main technical analysis books seem to have a section on PnF including John Murphy (but not Edwards & Magee).

If anyone is trading S&P or Dow using PnF, it would be interesting to know how you're finding it.
 

stock trader

Junior member
24 1
Thanks for the info Helen, some how I am inclined to agree with what FTSE Beater and Splurge had to say that P&F is not really suitable for swing trading, I think its fine for LTBH. I have a number of books written by reputable authors with very good content but here again they do not tend to dwell on the practicals of trading (also on that not I recently purchased a book on swing trading by a Marc Rivalland in my opinion I would not give it any stars a waste of money I'd say, I'd do much better trading just using Candles!) Skimbleshanks, I have Kermit Ziegs book, but here again his trading style seems to point to LTBH, but I agree with you that it would be interesting to know if anyone out there is trading using P&F how effective is it really??

regards
ST
 

DaveJB

Experienced member
1,159 42
Hi,
using the (plug) tool I added to the latest version of Pfscan I've looked at some 30,000 P&F trades from the FT350 and S&P500 going back to the start of the tech crash. Before going further I'll make the point that I think P&F traditional methods suit LTBH more, and a 'good' trade can also start off with a bad dip at some point that any trailing stop method will exit on.... if you are prepared to set a BIG initial stop, unlike me, you might find overall hit rates improve - old studies give 70% good calls as typical for P&F. which I can only find by filtering for specific short trades.
Overall, and this is fairly preliminary analysis, it looks to me like you can expect a system built on P&F signals to return around 50-55% winners, some percentages drop to mid 40's, others up to around 60. This is based on a system that buys at the close on the signal day, sells at close on sell date, and runs a trailing stop to signal exits. By adding further factors such as exits on the daily bars moving for x days against the trade, the P&F changing bull:bear etc, the percentages alter a little.
The average hold of these 'automatic trades' varies, but is in the 25-35 day range usually.
Comments: I purposefully adopted a conservative way of assessing this stuff - the data dump with signal info contains a 'peak price' showing you the 'best' price hit by the trade between buy and sell dates... the profit on ALL trades was around 3-5% average, using the entry/exit prices rather than the 'best' price... active management of exits could therefore get you closer to the 'best' return, which ran from around 9% to 12% average per trade. So if you were really good, then you'd have made 30,000 trades, and averaged say 10% profit across them all. (Not just the winners), in the course of 4 years.
Better statisticians than I can no doubt make more of this, I only scratched the surface, and want to expand this area of Pfscan to add filters to that 'exit selector' form to allow users to explore their trade management strategies. As I remain convinced that profit results from managing positions better, and the 'hit rate' matters less, then I find the initial numbers encouraging - NO block of trades using all the different filters I've tested ended up losing, although the profits are sub 5% generally. Not bad for a purely mechanical system though, especially at the first attempt.
Dave
 

DaveJB

Experienced member
1,159 42
FWIW,
the intention is to exapnd this idea into a sort of tactic tester to give more accurate entry/exit simulation - hopefully in due course I can update this with better analysis. For info the FT350 was noticeably better (up to 10% increase in correct calls) for P&F than the SP500, which surprised me.
Dave
 

stock trader

Junior member
24 1
I depend on Candles, Stochastics, RSI and CCI for accurate (or near accurate) entry/exits.
However if this follows with a favourable indication on P&F then this gives me more confidence to hang on to the trade for longer.
I nearly always use candles to place my stop loss. Then again having said this I suspect there remains a lot more to be said for P&F "all is not unveiled!"

ST
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock