Article Point & Figure Gone High Tech

T2W Bot

Staff member
1,454 54
There are a large number of traders who look at Point & Figure charts, with ?look? being the operative word.  That is, for most traders, once the market data gets represented as a P&F chart, they are at the end game.  If the last x entered is in one box higher than x?s in other columns, you?ve got a ?buy signal?.
Why is that so? Because someone eons ago said so. What?s the proof? There is none; that?s just the way it is. Now, don?t go thinking that I am going to trash P&F. Au contraire. I?m going to show you why it?s a great tool, how to test its efficacy and use it more effectively.
Before I really get started, let me explain that not everyone considers P&F charts as something only to look at. One extremely respected investment advisor counts the P&F buy and sell signals of each one of the NYSE stocks and creates an index out of those signals. And he has built a very good record managing hundreds of millions of dollars with that as his market index. Another very successful fund...
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osho67

Well-known member
407 3
Is there any software which will allow me to use IB data to plot P & F charts?Paid or free?Thanks
 

Effkay

Well-known member
299 2
Thanks for the plug joules! :)

As for the article - quite good! I didn't quite understand what he did when he said that he smoothed the pnf chart using a 25 period average. I can guess that he simply used a 25 period average to smooth the data that was plotted, but is that what he meant?
 

author_trader

Newbie
5 0
Author’s elaboration:

In the case of a Point & Figure line, each new point on the line represents movement, either a new x or a new o. Dates are irrelevant and ignored. This is classic P&F turned into a line. The chart mentioned by “Effkay” illustrated a 10-period exponential “average” and a 25-period moving slope (see my previous T2W article). That is, the data input was from the P&F line. Once you have turned the P&F price data into a line, you can do anything you want with it, like use it to produce indicators or a trade simulation.

In the case of Point & Figure Time Extended, each point represents a new day (or week, etc.) and the last x or o for that day. If there were no new boxes recorded for that day, then the line would be continued horizontally. The chief reason for doing P&F Time Extended is to enable you to compare the P&F signals with a bar chart. Then you could compare the trading records of a “signal” generated by a bar chart with the “signal” generated by the P&F data. The bar chart signal would usually move first, but the real comparison would be the profitability of each.

Too many traders use untested ideas, or ideas which they have only tested once. BTW the software I use for this is Financial Data Calculator.
 

Beach Runner

Active member
128 2
I love p&f and it's interesting to read that the original one box reversal is covered in the du Plessis book (which I haven't read) as there is very little written elsewhere about it.

I'm assuming JoulesMMI that you are Jeremy du Plessis's literary agent! (smile)
 

Racer

Senior member
2,666 30
Not specifically on this article but a comment on the book by Jeremy Du Plessis
Description of The Definitive Guide to Point and Figure
I have read most of the book.. I say most because I got very bored with it in the end because of its very repetituve nature which became annoying.
Yes it is a good book for point and figure and I agree with that.
..but..
it could be condensed into far smaller a size without losing any of the information.
It reminds me of trying to use big writing to fill the pages in a school essay, so it impresses the teacher
 

Indexor

Newbie
1 0
Excellent new view of one of the oldest technial tools. Would also love to see some software to produce such charts.
 

tonygamble

Junior member
22 0
Would also love to see some software to produce such charts.[/QUOTE]

Although J de P never mentions it in the book he is a director/shareholder of Updata.

Updata, not unexpectedly, has a geat point and figure facility. What is especially clever is the way you can (a) seach for favoured p&f patterns and then (b) whilst paging through the shortlist the software will automatically draw trend lines and do the upward/downward target counts.

With regard to the book, yes, it is long.

However, some of the later chapters, such as the use of p&f on OBV, are worth a visit - as is the use of Bullish Percent and Market Breadth. I know that keeping an eye on the latter is going to improve my trading.

Tony
London UK
 

DaveJB

Experienced member
1,159 42
Currently your choice for P&F software that can pattern find and scan for interesting charts is probably limited to Updata TA or Bulls Eye Broker (archer analysis, an Australian outfit).
BeB allows data from Metastock, TC2000, Amibroker or Ascii text according to the website - Updata used to be tied to their own data, I don't know if that's still so but it might be relevant to a decision.

I've not read J Du P's book which I'm sure is very thorough, Carroll D Aby's 'Point and Figure Charting - the complete guide' is also a very good book on the subject, probably the best I've read so far. Those interested in the 1 pt charts looking to see early work on this might like to order up 'The Point and Figure method of Anticipating Stock Pricew Movements' by Victor De Villiers and Owen Taylor, from 1934 - both books were available recently (and still are, I think) from Global Investor... the people the T2W booksite link takes you to.
 
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DaveJB

Experienced member
1,159 42
Yup,
Updata have a trial as well - I'd strongly suggest those looking for good P&F try both out to see which suits them best. The chap running Archer is a nice chap, and provided you have a decent datafeed already then it's economical to just add the P&F software to it. If you don't have data, and perhaps would like other TA facilities along with good P&F, then Updata is pretty good.... on top of which I'd suggest that 'how it feels in use' will probably determine the ultimate choice between them.

It's a bit surprising to me that so few 'big' programs out there do a decent job of P&F - they incorporate it as a chart, but either ignore it when providing scanners or implement it so poorly (I'm thinking of Metastock as I type) that it's horrible to use. It's relatively straightforward to code up a scanner for the main patterns - around two dozen or so - yet none of them seem to bother.

Dave
 

Dentalfloss

Legendary member
49,867 3,364
p/f charts are now available on quotetracker.it includes historical and intraday tick charts.covering all us stocks,indices..uk stocks,spot and fx futures and index futures.cost approx a tenner a month to include 10 days intraday
free eod p/f charts for uk and us stocks,futures and indices and spot fx from prorealtime.com
 

Dentalfloss

Legendary member
49,867 3,364
osho67 said:
Is there any software which will allow me to use IB data to plot P & F charts?Paid or free?Thanks
quoteracker can use data from ib.they have p/f charting now
 

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