Learning to read Price Action with P&F Charting

[howardcsh]

We trended up hard all day on the ES. I only traded from the long side today. There were some short set-ups but why take that risk. The trend is your friend.

On the huge down move displayed on that chart why would you even think about going long there. That may be a great trade but the risk reward is terrible and that will likely be a failed signal. Market makers and floor traders do know these signals and can put out bull and bear traps. You should always look left on the chart for your direction. If the chart is running from top left to bottom right look to be short. If the chart is running from bottom left to top right look to be long. These two simple rules will save you from disasters.

 

[howardcsh]

Thanks Gehko I just put in my limit order. That is a great set-up.

 

[HolyGrail]

Thanks for the compliment Gheko, and the contribution. I think we really might have something going here as more and more pnf'ers join in. Howard has already made huge contributions.

I'm no expert at this, and probably never will be, but if we put our heads together this could be something really special.

 

[WyckoffTrader]

Quote from HolyGrail:

Renko didn't help me and I am familiar with the wyckoff method as well.

If you don't mind, I don't want to change the direction of this thread. If you start a thread on your method I promise I will read it.

Just thought I would offer than as a confirmation chart or some tid bit that some one can use to extract $$$$. I will only stick to PNF here......I do not want to start a new thread but will follow this one and maybe learn a nugget or two....long live alternative pricing.

 

[HolyGrail]

Here is a chart to swing trade on the break out.

Symbol ABI

I strongly suggest people keep this in their watchlist. It is in a large perfectly consecutive triangle. This move is going to be huge when it happens. Remember if it gives a false breakout and reverses, double up and take the reversal.

 

[HolyGrail]

Quote from WyckoffTrader:

Just thought I would offer than as a confirmation chart or some tid bit that some one can use to extract $$$$. I will only stick to PNF here......I do not want to start a new thread but will follow this one and maybe learn a nugget or two....long live alternative pricing.

I have no problem with confirmation charts. Feel free.

I just don't want anyone to discount pnf charts because they have no volume or other indicators on the chart. My whole point of this thread was to teach price action without indicators.

 

[howardcsh]

One other rule that I follow faithfully is as follows.

When I have taken my first two mechanical targets and my runner is working If the price gets above ten points I always move the stop to that level. Pigs get slaughtered.

Big outsized moves up are almost always followed by large retracements. The market will not allow prices to be extended for long.

 

[howardcsh]

HG, Do you use the three consecutive ups or downs?

I haven't tried them live yet, I do paper trade them and they seem to be better than 50%. If you have used them what has been your results.

 

[HolyGrail]

Quote from howardcsh:

HG, Do you use the three consecutive ups or downs?

I haven't tried them live yet, I do paper trade them and they seem to be better than 50%. If you have used them what has been your results.

To counter trade?

 

[howardcsh]

No its supposed to be a continuation pattern.

If each successive row of x's is one higher than the last and the bases are also rising you are supposed to be able to buy the third consecutive x.

I don't have a lot of faith in it.