P&f Charts

stock trader

Junior member
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"I have seen numerous occaisions where people have exited a trade when , even with the simplest of TA expertise, there is clearly more to go. It isn't always clear just "how much more", but unquestionably, there is more. "
____________________________________________________

Chartman...I somehow disagree with your above statement, we all know better than that, there is NO certainty with any trade that ones Profits will "SOAR" no matter what the level of ones TA Expertise, then again we as individuals have our own strategies of trading the markets and when to exit.
I think this is a personal thing and how one feels at the time emotionally, (Fear & Greed) and nothing becomes "CLEAR" especially when it is your money that is at stake! I think we have all been in this situation sometime...would'nt you agree??

Dave, thank you for your detailed P&F contribution to this thread.

regards

ST
 

nautical

Junior member
I don't think Chartman is saying it will "soar"...merely that he has observed that people often bail out when TA itself may not indicate the need to sell.

Surely if this wasn't the case as you speculate, we'd all be selling at or near the top of a trend which would be blOOdy marvelous but not usually acheiveable by the mere mortals amongst us unless this happens to coincide with an existing resistance level.

Chris
 

DaveJB

Experienced member
yep,
I can see where the 'it isn't so blindingly obvious' bit comes from, but also the comment about there being more to come - I bet most people here would agree, inside 30 mins over a pint in fact, about the main points.
Timing is critical - getting better at picking trades might make you 20% better (pure guess), so on a 10% stoploss tactic you'll be quite bit better off now you get 50% winners instead of only 30%. Now you go for better timing and exit all trades 20% higher up the food chain.... the thing is you can sort of minimise losses via a simple stop, and as long as your winners make enough you're okay - but the 'simple trailing stop' exit is returning around 25-35% of the profit of the 'best possible' exit.... so you can, given godlike powers, treble the profits by optimal timing on the trades you are already picking.
Seems to me I'll find timing easier to improve than selection, and that timing is likely to give a better improvement in the bottom line as well!
look on the bright side, it's interesting and you get wads of money for solving fun problems... what else could you want? :D
 

Helenqu

Established member
Hi Stock Trader,

Sorry didn't see your post until just now.

I'm about to start working (in the nearish future) on a swing trading strategy of my own. But I'm currently using two methods to pick FTSE100 stocks to trade. The first is Pfscan. I use the reversal tool to pick candidates and then trade them as I see fit with TA so it's discretionary.
The second is the FOFLS strategy which I've mentioned elsewhere on here and I don't want to get boring :) The only performance figures I have are for the FOFLS trades assuming a spreadbet of £1 a point and a 5% stop loss. With 136 trades last year the ROI would have been about 8%, that is a long only strategy in a bear market with 15 day holds. OK it's not great, but I think in better market conditions it would have performed much better, also I ought to add that was £1 a point no matter what share price, so the 44% rise in ISYS it picked,didn't earn what is would have done had you been working put position sizing properly.


HTH
 

ChartMan

Legendary member
Stock Trader- you're right - there is no certainty. I was just commenting on things I have seen. Fear and Greed plays a big part, as discussed in the chat room today. A suggestion was to position size, scale in and out, cash in some profits and let a bit ride. This may help remove the fear and allow a little bit of greed and thus allowing one to concentrate on a good exit instaed of worrying about the amount of money at stake and cashing the lot in through fear. Easy to say, hard to do......
 

stock trader

Junior member
Helen - It'll be interesting to see how you get on with your swing trading strategy (keep us posted) and thanks for expanding on your present trading method and many thanks to all and everyone that contributed to this thread and to all those that contribute to this site as a whole...its all your views, thoughts and feelings that make it an interesting site to visit.

regards
ST
 

Nildes

Active member
P&F is not really suitable for short term trades. Medium to long term investors should find it a relatively safe method of investing and I wouldn't argue with DaveJB's picture of the returns.
The three point reversal method is a great way of removing the noise from the trend and the X axis treats time as largely irrelevant.
Used to manage the more risk averse parts of a portfolio it can be very useful and, in conjunction with ordinary charts, it can provide a handy reference check for most short term stock scrutinys.
 

TBS

Well-known member
Nildes said:
P&F is not really suitable for short term trades. Medium to long term investors should find it a relatively safe method of investing and I wouldn't argue with DaveJB's picture of the returns.
The three point reversal method is a great way of removing the noise from the trend and the X axis treats time as largely irrelevant.
Used to manage the more risk averse parts of a portfolio it can be very useful and, in conjunction with ordinary charts, it can provide a handy reference check for most short term stock scrutinys.

You obviously don't know much about PnF charting:

1. PnF can be used for intraday trading, just as any other type of chart can.

2. It is only as safe as any other form of 'investment'.

3. 3 point is usually quoted, but is not always ideal, each chart has to be optimised, which is why it is best used for futures type contracts rather than for a huge basket of individual stocks.

4. Time is completely irrelevant

5. PnF is a very simple, but very effective form of charting. It can be used in many more ways than bar or candle charts.

Those that use it as a 'quick check' are simply putting up a pretty picture without understanding what they are really looking at.
 

DaveJB

Experienced member
Gosh, the thread bursts back to life!
I'd have to agree with TBS totally here - I'm busy writing a P&F scanner for intraday trading ;)
It's a different way of viewing the data, we use different views to obtain (we hope) useful information we don't get from other viewpoints. P&F can be used in all timescales, most of the books etc on it tend to emphasise the end of day side, which fills me with hope that I'll be able to make a killing when I spreadbet based on my RT version when it's finished....
There are lots of ways to skin the cat, my main point a year back was that taking the maximum out of each trade was every bit as important as picking the trade to begin with. Just wish I was better at both!
Dave
 

Rognvald

Established member
While I remember and not to put you off DaveJB's kit - anyone who is serious about p& f charting should look at Updata's TA foir excellent p&f and its optimisation.
 

madasafish

Well-known member
I have started using Pnf and I can recommend the following book:

The complete Guide to Point and Figure Charting By Weber and Zieg published 2003..by Harriman House

Very up to date, easy to read, targets/etc.

I just use IRT's PNF charts and draw lines manually: you dont need to run them mor ethan once a week in a trade.. in fact once you run them before entering a trade , you just wait.

AHT?
TAD
INO
all BIG (70% plus in under a month) gains helped by PNF..

Makes recognising events much easier..

MUCH Easier...:)
 

DaveJB

Experienced member
Yes,
I wouldn't put anyone off trying the Updata program - I think the program's very good myself :) It just doesn't do what I want, and I think a year (still counting) is a tad long to wait for replies to emails to support ;)
Dave
 

Mayfly

Established member
I’ve got to agree with Rognvald about this – anyone who’s even remotely serious about P&F charting has look at Updata’s Technical Analysis software – which is excellent for P&F charting.

Nildes, since you’re in London why don’t you go along to the STA’s upcoming lecture on P&F charting at LSE? This should be held sometime in February. JduP takes the lecture – it lasts about three hours – and covers just about anything you’ll need to know on the subject – you’ll also get a detailed set of lecture notes. From memory, the lecture costs about £60/80 – although this info probably out of date. The STA website is here: http://www.sta-uk.org/index.htm

In the meantime, "Point & Figure - Commodity and Stock Trading Techniques" by Kermit Zieg and published by Traders Press is useful.

HTH

Cheers

Mayfly
 

Mayfly

Established member
…or do the free Dorsey-Wright PnF 'university', as both Dave and TBS suggest! :)

Dave, I agree that a year (and still counting) is a long time to wait for a reply to emails to wait – although, I’ve never had a problem with support personally. Is this a pun or a joke? Anyway, I intrigued. What is it that TA doesn’t do and what would you like it to do? :-0

Cheers

Mayfly
 

Nildes

Active member
Mayfly,
I agree that Updata's P&F charts are very good but like with most Updata stuff, they won't tell you how they work.
For instance, with their P&F charts, they won't say how the price tagets are calculated.
Breakout Method? Reversal Method? Own cookbook rule of thumb?

One basic rule of stats is to look at the raw data and find the most appropriate tool to examine it with. To make the data fit a favourite tool often leads to errors.

I think P&F's are very useful and use them regularly but (despite some replies) have reservations about how and where they can best be used or whether there are not better tools in the TA armoury that would be more appropriate to the situation.

Many thanks for the link, I will have a look and maybe go.
 

DaveJB

Experienced member
Hi,
I wanted a program to find specific patterns - eg bull reversals. By the time UTA was out I'd written my own, I had previously bought Indexia 2. Finding, for example, all the long or short signals in the FT350 would be an example - eyeballing all 350 rather than the dozen currently showing a buy signal seemed a bit of a waste of time to me.
I tried to get Updata support's attention to problems via email, repeatedly, about a year back whilst attempting to review their programs. I have NEVER had a reply to any emails to support - sales, on the other hand, seem quite capable of bombarding me constantly. My impression is of a good program, but the company - as I see it, based on my own experiences, is more interested in selling me things than supporting me. That may be harsh, but it's an opinion I've seen elsewhere quite often.
I sell programs myself - I consider it extremely rude not to reply to emails, if I didn't intend to reply I wouldn't tell people to contact me that way.
Dave
 
 
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