Learning to read Price Action with P&F Charting

In his long chapter on Point and Figure trading Kaufman describes using other means to determine an optimal box size.

I thought it was interesting but not enough to make me want to buy the book! It did not also interest me enough to program it in my charting package which would be easy to do. But hey, maybe I missed something...

At the end of the day I believe for every trade adaptive-box-size helped you, you would lose another trade using the standard boxes.

Probably best is to use another approach to confirm the trade. HG uses several screens of different size boxes, I use other screens following price action, and volume, with a few indicators.


http://www.amazon.com/New-Trading-S...bs_sr_1?ie=UTF8&s=books&qid=1206998492&sr=8-1

Good trading!
 
kaufman is not quite right on this.there is no optimal box size.if u flip up or down thru box sizes then u will see.
slacker;any chance of the codes for youre p/f charting
 
Ok, I was just playing around and experimenting a little on this. I took a 200 day atr on YM and ES. If you use 3% of the range you get a pretty nice intraday chart. I tried this on stocks as well and it looks pretty good.


Edit: so if you like to trade apple intraday, at least one of your charts would be a .14 per box size chart.
 
HolyGrail, I believe you may be mistaken about box size on YM. I think that thesis used the ES. Point for point, if you used a 4 point ES box, you'd be looking at somewhere around 40 YM points. Please correct me if I'm mistaken.
 
The research paper on P&F shows an average win ratio of less than 45%. However, I noticed their exit signals were not based on S/R or trendlines. For example every B4/S4 entry was closed out with a S1/B1 signal. It is possible that I missed other exit strategies employed by the researcher but if, in fact, the only exit signals were the opposing buy or sell signals, how much influence could that have had on the final win ratios? And what are the best exit signals? Has that already been discussed here?
 
Quote from atonix:

HolyGrail, I believe you may be mistaken about box size on YM. I think that thesis used the ES. Point for point, if you used a 4 point ES box, you'd be looking at somewhere around 40 YM points. Please correct me if I'm mistaken.
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I'm not sure I understand what you are saying? I am using a 4 box reversal now both on ES and YM. Points per box is a different story.
 
Quote from HolyGrail:

I'm not sure I understand what you are saying? I am using a 4 box reversal now both on ES and YM. Points per box is a different story.
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Ah, you're completely right.
 
Ok, you guys need to know I cheat sometimes. Most of the time I won't, but I do this often and it has a decent track record.

If you have a STRONG uptrend or downtrend and you get a failed double bottom sell signal(in an uptrend), or a failed double top buy signal(in a downtrend) I normally do not wait for another pnf signal before I buy or sell. I buy or sell on the very next column change if it appears on two charts.

The annotations showing the failed double bottom did not show up on my chart for some reason so you will have to spot it manually. It's the last 0 column on each chart.
 

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Quote from HolyGrail:

Ok, you guys need to know I cheat sometimes. Most of the time I won't, but I do this often and it has a decent track record.

If you have a STRONG uptrend or downtrend and you get a failed double bottom sell signal(in an uptrend), or a failed double top buy signal(in a downtrend) I normally do not wait for another pnf signal before I buy or sell. I buy or sell on the very next column change if it appears on two charts.

The annotations showing the failed double bottom did not show up on my chart for some reason so you will have to spot it manually. It's the last 0 column on each chart.
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Just so I have it right you would buy as soon as the X colunm printed?

Great thread. Thank you
 
Quote from Boib:

Just so I have it right you would buy as soon as the X colunm printed?

Great thread. Thank you
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Yes. It is taking a risk, but you are going with the trend. The thinking behind this is if there was going to be a reversal of trend that would have been the time for the opposing forces to do it. They failed. Trend should continue.
 
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