P & F & UK Shares

fastnet

Well-known member
305 1
Hi Nautical and thanks for your reply -

I think I'm done this one to death to be honest and I'm wondering how much it really matters to the signals that are generated.

I know what I'm trying to explain but am having great difficulties getting this idea across in words . . . . . . guess that's ultimately down to me.

Basically time, whether it be minute, day, month is totally irrelevent with true and unmodified P&F. The chart measures price action alone independantly of when this action occured. So, in this instance, to say that one must chose a time period and try and trade it (whether it be 15min daytrading or looking at the weeklies) does not make sense.

Let's leave it there and agree to differ. . . . maybe it matters not - I don't know.

Thanks to all that have joined this discussion.

Cheers -

Fraser
 

svengali

Junior member
15 0
[...] the main difference with P&F is that [...] many days [...] can pass by without any new columns being added. If the price traded within a tight range [...] then nothing would be added to the chart.
Yes.

P&F should record any significant (as defined by your chart) price action whether it happens intraday or over a number of days. The point is that days are a measurement of time and time is not relevant with P&F.

No. PnF should record any significant price action portrayed in the subset of data points that you choose to consider. Some people use 1 minute data to feed their PnF charts - they get very different charts to the people using EOD data for their charts.

Both are using a subset of all data points, and so both see features on a different timescale. If you use 1 minute data, you find features that emerge over minutes. If you use 15 minute data, you find features that emerge over hours. If you use daily data, you find features that emerge over weeks.

As with all charting techniques, you need to choose an appropriate timescale. Since you have already stated that you must use daily data, you cannot see features that occur intraday.

I hope this helps to clarify things!

-svengali
 

DaveJB

Experienced member
1,159 42
Yep,
on a quick scan I think Chris made the point that matters here... and I think it's a point you've not quite grasped, it isn't that intraday moves are ignored at all... the H and L prices show how far in each direction the pressure went, whether it bounced 5 times enroute is immaterial incidentally, it's which way the supply : demand argument was decided that counts. Where the HL chart 'goes wrong' is it assumes a single box in the existing direction outweighs a 20 box move reversal (to exaggerate)... Tuesday had an X column up to 100, (2 pt box) so the Weds high at 102 sets a new box end of story - disregarding the fall to 50 on the same day! <g> So on Thursday either the price rebounds to 104 region OR the reversal check is made (no new box unless 104+ hit by the high). So you might be a day late with the reversal signal - to overgeneralise a bit this is a price you might, now and then, pay for taking the unimportant moves out... you occasionally get the signal a day late. Not often though, and mostly it's a case of throwing out 98% rubbish - that 2% good goes out as well doesn't matter, it's the ratio of good to bad that counts!
If you want to ensure you don't miss short term intraday then use intraday prices for P&F instead... you make up H and L price data for the chosen time period, and use a small boxsize. Using EOD data you're trading over days+, as you increase the boxsize so you miss trading the zig zags inside the longer term up or down move.
Just one tiny issue - I haven't modified P&F theory at all in the charting I described, that was 'plain vanilla'... some of Pfscan's stuff DOES alter the accepted ideas (never been keen on stone tablets with zilch to confirm authenticity) but the HL charting as described is the official 'right' way to do it.
Dave
 

dolton

Member
69 0
Originally posted by nautical
Hope you don't mind me chiming in here guys but I wanted to clarify one of Jonny's replies.

Fastnet wrote:

From your email I understand that if, for example, the price is currently describing an upward column but then, intraday drops once or twice and bounces off the same resistance that is more that 3 boxes away (assuming 3 box rev) BUT the price gave a high for the day slightly higher than the previous day then only the continued movement upwards would be added??

Jonny replied:
Correct, that is a rule of PnF charts

Jonny - in the example above (using Fastnet's proposed EOD system) are you saying that you'd actually plot the day's high and not the closing price (which itself may not actually extend the plot upward)? I always thought that it's the level of the closing price (not the intraday high) that determines whether you continue to plot upwards or instead start to plot a column in the opposite direction. Is this not the case? Happy to be corrected of course and have much enjoyed reading your automated PnF exploits on one of the other TTW boards...good luck with it!

Thanks in advance.
Chris
 

dolton

Member
69 0
JonnyT said:
Proper PnF uses the days high and low prices and not the close price.



Not true.......Indexia Technical Analysis package and instruction offer two methods based on High/Low and Close prices only.

As with most things in TA there are two schools of thought when it comes to PF charting. Indexia provides a unique ability to draw PF charts based on either of the two methods......Indexia concede that "Many Analysts" prefer Hi/lo P&F....But to try both and draw own conclusions.........

I use Indexia 4x1 P&F using a free slightly delayed feed from NTV which still produces good signals.
 

dolton

Member
69 0
dolton said:
JonnyT said:
Hi Chris,

Proper PnF uses the days high and low prices and not the close price.


Not true.......Indexia Technical Analysis package and instruction offer two methods based on High/Low and Close prices only.

As with most things in TA there are two schools of thought when it comes to PF charting. Indexia provides a unique ability to draw PF charts based on either of the two methods......Indexia concede that "Many Analysts" prefer Hi/lo P&F....But to try both and draw own conclusions.........

I use Indexia 4x1 P&F using a free slightly delayed feed from NTV which still produces good signals.


Correction...{typing again} .should read 4x2 P&F.....patterns with single box reversals are not allowed!!
 

DaveJB

Experienced member
1,159 42
Dolton,
hi - I think I have to support Jonny T here a bit - whilst Indexia allows close based charting, although not uniquely (despite the claims in their promo material other programs - including Pfscan <g> - had some of their 'unique' features before they did) ... the 'how to do it' literature going back the past 60 years or so is fairly consistent on the HL method, although many of us accept that close charts are both possible and useable. (My own opinion is you just get a different view of reality, which will vary from 'better than' to 'worse than' the H/L variant, just as changing box size or reversal is often as much personal preference as anything else). Consequently perhaps the more appropriate word would be 'traditional' rather than proper?
1 box reversals might not be supported in Updata TA, but they are 'allowed' in P&F, they are the only version of the charts that allow both X and O boxes in the same column in fact.
Dave
 

JonnyT

Senior member
2,560 22
Thanks for the support Dave.

I have seen evidence that high and low prices for PnF was used by the Chinese in the 1800s for trading spices etc.

Personally I see no advantage to using close prices.

JonnyT
 

DaveJB

Experienced member
1,159 42
The first charts I ever saw were Close... it was only when I got into P&F properly that I discovered H/L! I like the thinking behind H/L, which I can make a logical case for - I find it harder to justify close... I think yu could perhaps make a case for starting a new column if (despite going a box further) there was a huge opposite move AND the price closed in the reverse direction, but ultimately the 'intraday' problem will either resolve itself or reverse next day... which is, to my mind, why we use P&F - it takes the wobbly bits out and when the smoke clears you're off again.
 
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