Learning to read Price Action with P&F Charting

Quote from 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.
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I'm not familiar with that. Thanks. I will paper trade that for awhile and see what happens, unless that is just what they call a bullish signal.


The bullish signal in my book is two consecutive higher lows and higher highs you then take the reversal after the second higher low.

I have traded that without much success.

edit: I think we are talking about the same thing.
When I traded that I had a little over 50% success rate. It might have been profitable with better targets on my part.
 
There is one pattern I do like to trade that I haven't even mentioned and that is the strong uptrend or downtrend. It is a pattern with at least 8 boxes in one direction followed by only a 3 box reversal. I will buy the double top or bottom breakout on that every time, and if it gives me a falled double top I will reverse.
 
After going over the past 200 days of intraday data of the spy I am going to start tomorrow using the triple top/bottom and quad top/bottom live.

Using them when there are fewer boxes, 4 or less, (below for buy, above for sell) seems to make the signal even stronger.

x x x
xoxox
xoxo
ox


(the above is my crude attempt at showing what I mean by the height of the boxes)
 
Quote from trackstar:

After going over the past 200 days of intraday data of the spy I am going to start tomorrow using the triple top/bottom and quad top/bottom live.

Using them when there are fewer boxes, 4 or less, (below for buy, above for sell) seems to make the signal even stronger.


_____(signalhere)
x x x
xoxox
xoxo
ox
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I think that could work. I like trades with small reversals because it keeps your stops as close as you can get.
 
That is the pattern. I have had about 50% on paper but it often puts you through a retracement and tests your stop so I don't really like it. I like to get my first target before any retracement that way any stop out only cost 150.00 or so.

So glad I actually found some people who trade these ancient charts. Lets make sure they don't get too popular though.

Dow used these in the nineteenth century. Funny how these charts outperform all the complicated mathematics in all the bands and oscillators. Bollinger band breakouts will get you in at the top better than anything else on the planet. Moving average crosses will get you in just in time to scalp a half point before the price rolls in the other direction yet people still trade these things every day.

Oh and nothing better than an overbot reading for about fifteen minutes while the price just rockets up.
 
Man we are on the same page Howard.

I'm going to try the bullish and bearish signal on paper and see how it does. There are some good moves with it, and I have a feeling it might have been more of a problem with my trailing stops. I used to trail stops after a 5 tick gain to break even and I have since found by not doing that I increased my profits per trade by 60%
 
You have it right trackstar. The ideal setup is a nice triple top or quad where the last row of o,s before the breakout row of x,s is only three high. This is the best for risk reward.

You may get a great trade for your first, but like any trading system expect the first trade to test you. Trust the stop. It is below that last row of o,s or above the last row of x,s because those are support and resistance and they will usually hold. When I first started trading these signals I just used one or two contracts and took profits in total until I got comfortable with seeing the price retrace soon after a breakout. Helped me to visualize it as price breaking through a pivot and then retracing to the pivot before taking off (this is probably actually true). I am to the point of sometimes adding on on these retracements if I feel stongly about the setup. Think about the math. You buy a breakout at 1350.00 stop at 1347.50. You then take profits at 51, and 52. Price then retraces and you put in a buy stop at 1348, or 48.50. If the retracement takes out your order you now have those two or four contracts back with closer targets and even more momentum and only a one point stop.
 
If it put in a three box reversal then turned right back up I'd probably go for the next double top that is a powerful reversal.

Still alot of resistance above though.
 
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