Continue reading...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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