Thanks StaffPro, I appreciate your input on the GOOG.Quote from staffpro:
well if you did the "one below last o" column strategy HG mentioned then 416 would be your initial stop and then i guess as it moves up you would trail up always 4 boxes behind?
for a 400$ stock like goog i am using 4boxsize/3rev
ohh and as a target are we looking at the high of the last x column in that case 530?
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Learning to read Price Action with P&F Charting
- Thread starter HolyGrail
- Start date
I have been trading p&f for a while now. When I discovered it I did a search on this and several other forums and when I found almost nothing I knew I was on to something.
Holy grail, thank you for starting this thread.
I trade off the .50 x3 for intraday trades. I usually only trade triple tops and bottoms. I particularly like the breakouts when there are four or more o's or x's lined up.
I trade a sort of combination scalp and runner plan. I use trade lots in multiples of three. In volitile or trending markets I take the first third off at one point. I take off the next third at two points. I then trail the stop one box under or over each pullback until the runner is stopped. I always move the stop to the entry after the second target is hit so I have a free runner. I have had trades pay off up to twelve points using this method. It does get a little scary since you never know when a pullback will end but large runners on occasion are what you need to have great profits trading.
When the markets slow down or are ranging instead of trending I simply reduce the first two targets to 1/2 point and one point. I find that the only double tops I can safely trade usually are the first pullback after a big news event I will then use the same targets and trailing stop methods. most of the time you get three thrusts on news so when you get in the area of the third thrust and are around the top of the previous column of x's you need to start looking for the exits but that will usually be six or seven points.
I use high low so my charts may not match those of you who use closing charts but I like the extra entry options. You seem to develop a sixth sense about the ones that will be successful after a little chart time. The ES fired off at least four triple tops that were successful this morning. I had $600 in profits by 10:30 eastern this morning.
These entries are primarily breakout entries so if you all will take a little time to start looking at metals and soft commodities you will be pleasantly surprised at how much better these markets are for P$F trading. You need a strong stomach for these markets, however they often trend longer and harder and those are excellent traits for P$F entry signals.
Again thank you HG for starting this I have been hoping to get into a discussion and learn some more strategies.
Holy grail, thank you for starting this thread.
I trade off the .50 x3 for intraday trades. I usually only trade triple tops and bottoms. I particularly like the breakouts when there are four or more o's or x's lined up.
I trade a sort of combination scalp and runner plan. I use trade lots in multiples of three. In volitile or trending markets I take the first third off at one point. I take off the next third at two points. I then trail the stop one box under or over each pullback until the runner is stopped. I always move the stop to the entry after the second target is hit so I have a free runner. I have had trades pay off up to twelve points using this method. It does get a little scary since you never know when a pullback will end but large runners on occasion are what you need to have great profits trading.
When the markets slow down or are ranging instead of trending I simply reduce the first two targets to 1/2 point and one point. I find that the only double tops I can safely trade usually are the first pullback after a big news event I will then use the same targets and trailing stop methods. most of the time you get three thrusts on news so when you get in the area of the third thrust and are around the top of the previous column of x's you need to start looking for the exits but that will usually be six or seven points.
I use high low so my charts may not match those of you who use closing charts but I like the extra entry options. You seem to develop a sixth sense about the ones that will be successful after a little chart time. The ES fired off at least four triple tops that were successful this morning. I had $600 in profits by 10:30 eastern this morning.
These entries are primarily breakout entries so if you all will take a little time to start looking at metals and soft commodities you will be pleasantly surprised at how much better these markets are for P$F trading. You need a strong stomach for these markets, however they often trend longer and harder and those are excellent traits for P$F entry signals.
Again thank you HG for starting this I have been hoping to get into a discussion and learn some more strategies.
OK, I am starting to get a lot of PM's about targets. PNF does not manage your trade, you do. There are many ways to determine a target.
Say you are in an uptrend and you get a failed double top. The real question of target price is one that YOU have to answer. PNF basically just tells you the most likely direction.
What I do is ask myself what is the current trend of the day? If the trend is up and it hasn't at least retraced to 38% then chances are it will retrace to at least that level. You have to ask yourself am I willing to hold my original stop to my target or am I going to panic when my winning trade goes below my entry or turns into a loser? If you are not going to panic then you can set your first target to the 38% retracement level(start a trailing stop to breakeven after reaching 38%) and then have your final target at 50%. This is your choice.
You can also draw a channel of the tops and bottoms and assume that it could make it to the bottom of the channel.
Get a feel for what you are trading. If you trade the same stocks all of the time you can easily get a feel for those stocks.
Or you can do what I am currently doing. Keep a journal. Know what you can expect from each trade based on the current trend, and the market volatility etc. For example, in this high volatility market I have determined I can reliably get 6-8 ticks when scalping countertrend. I can get 12-16 tics going with the trend.
If volatility changes these targets may be cut in half very easily.
Say you are in an uptrend and you get a failed double top. The real question of target price is one that YOU have to answer. PNF basically just tells you the most likely direction.
What I do is ask myself what is the current trend of the day? If the trend is up and it hasn't at least retraced to 38% then chances are it will retrace to at least that level. You have to ask yourself am I willing to hold my original stop to my target or am I going to panic when my winning trade goes below my entry or turns into a loser? If you are not going to panic then you can set your first target to the 38% retracement level(start a trailing stop to breakeven after reaching 38%) and then have your final target at 50%. This is your choice.
You can also draw a channel of the tops and bottoms and assume that it could make it to the bottom of the channel.
Get a feel for what you are trading. If you trade the same stocks all of the time you can easily get a feel for those stocks.
Or you can do what I am currently doing. Keep a journal. Know what you can expect from each trade based on the current trend, and the market volatility etc. For example, in this high volatility market I have determined I can reliably get 6-8 ticks when scalping countertrend. I can get 12-16 tics going with the trend.
If volatility changes these targets may be cut in half very easily.
Quote from howardcsh:
I have been trading p&f for a while now. When I discovered it I did a search on this and several other forums and when I found almost nothing I knew I was on to something.
Holy grail, thank you for starting this thread.
I trade off the .50 x3 for intraday trades. I usually only trade triple tops and bottoms. I particularly like the breakouts when there are four or more o's or x's lined up.
I trade a sort of combination scalp and runner plan. I use trade lots in multiples of three. In volitile or trending markets I take the first third off at one point. I take off the next third at two points. I then trail the stop one box under or over each pullback until the runner is stopped. I always move the stop to the entry after the second target is hit so I have a free runner. I have had trades pay off up to twelve points using this method. It does get a little scary since you never know when a pullback will end but large runners on occasion are what you need to have great profits trading.
When the markets slow down or are ranging instead of trending I simply reduce the first two targets to 1/2 point and one point. I find that the only double tops I can safely trade usually are the first pullback after a big news event I will then use the same targets and trailing stop methods. most of the time you get three thrusts on news so when you get in the area of the third thrust and are around the top of the previous column of x's you need to start looking for the exits but that will usually be six or seven points.
I use high low so my charts may not match those of you who use closing charts but I like the extra entry options. You seem to develop a sixth sense about the ones that will be successful after a little chart time. The ES fired off at least four triple tops that were successful this morning. I had $600 in profits by 10:30 eastern this morning.
These entries are primarily breakout entries so if you all will take a little time to start looking at metals and soft commodities you will be pleasantly surprised at how much better these markets are for P$F trading. You need a strong stomach for these markets, however they often trend longer and harder and those are excellent traits for P$F entry signals.
Again thank you HG for starting this I have been hoping to get into a discussion and learn some more strategies.
Howard - Thanks for your contribution! Glad to see some experienced P&Fers gathering here.
One question for you. Using the 0.5 x 3 chart, is your initial stop on these types of trades you discuss at -2.0 from entry?
HG,
Thank you for this thread. It is easily one of the best and most worthwhile on elitetrader.com
JP
Thank you for this thread. It is easily one of the best and most worthwhile on elitetrader.com
JP
Quote from howardcsh:
I trade off the .50 x3 for intraday trades. I usually only trade triple tops and bottoms. I particularly like the breakouts when there are four or more o's or x's lined up.
That is exactly how I started to become profitable. Trading only triple tops and bottoms.
I later began to look at all large 1 column moves. I then wrote down the characteristics of each move. When I saw that many had the same characteristic I incorporated that into my trading. That is how I came up with the failed double top and/or bottom signal.
I thought I was being original, but I have now been told it is the same as Trader Vic's 2b move.
Soon thereafter I decided to trade three different box sizes to get a better confirmation on my trades.
I guess it is impossible to be original in this game.
Nice thread you have here...... I was introduced to P and F while in a program in SF about 7years ago and this program was based on Richard Wyckoff and he had his own PF style.......what I found after many 1000's of hour and ideas that we where trying to automate is that P and F will not allow for volume or any normal indicators.....Thus I use Renko in conjuction with RNF and the combined tools are better than anything out there......I will post some ideas that we have tested and give a few of our issues that we have worked out over the last 3 years. Trade well and good luck to all using this alternative price action method. this is the right track.