Learning to read Price Action with P&F Charting

Quote from slacker:

Good luck finding a commercial P&F package. I had to write my own to get something I liked.

The problem is that most charting packages are built around a OpenHighLowClose data framework and hours:minutes:seconds and it makes them difficult to render p&f correctly.

Most commercial packages do not deal with p&f trend lines and convert OHLC bars to columns which loses column data. You really need to build the columns as the data comes in to really see choppy areas correctly and to have trend lines work (IMHO). Here is a screenshot of YM late this afternoon showing YM 1x3 boxes. Also on the screen is Time&Sales for ES, YM and NQ. I use p&f to complement other screens and not by itself.

Good trading! Great thread HG!
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InvestorRT should have everything you need. The things that aren't in should are in the works (at least the things I consider essential)...I haven't seen any mention those things in this thread...so I don't think you will miss them just yet. :)

Oh I should have said that IRT is using tick data, which is ideal. Historical data is converted into tick data (the current method could be refined IMO but perhaps it will be at some point...trying to get it that way).
 
Quote from nevadan:

Great thread HG. Someone earlier in the thread recommended du Plessis's book on P&F. I use the 1 box reversal method in the ES and thought it might be of interest here. The graphic is a comparison of a 1x1 and a 0.5x3 of part of last Thursday. The one box reversal is the only chart where X's and O's can occupy the same column. It allows for a pullback of one box and any increment up to but not including 2 boxes without changing the direction of the chart. This acts as a filter for minor pullbacks while continuing the trend. The small retracements can be seen as an ascending trend of X's with one O under them or descending O's with one X above. I like the way it condenses the chart and I think makes it easier to see patterns forming.
These charts are courtesy of a programmer friend of mine, but I saw on the link to Linnsoft that 5pillars posted that they have the one box chart for anyone that might be interested in following up on this.
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One box reversal charts are typically traded a bit different than 3 box reversal charts...emphasis being on fulcrums and the like.
 
Quote from pnf.guy:

I really enjoyed this thread. It looks like it has gone quiet. I thought I would bring some new life into it. My posts will simply be pnf charts. They are all in hindsight. The idea is to help create some steadfast rules that would enable traders to capture these moves. I would welcome any comments on how you would have played these charts. Please note these charts are not mine but borrowed from charthub. I don't have a live pnf platform
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you stumbled onto my charts eh?

what sort of questions do you have, I can tell you exactly how I traded them since they are my charts :)
 
Quote from osho67:

I would much appreciate the feed back. Anybody has used ThinkorSwim -do they have p&F charts?Thanks
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I've used them, they are excellent (one of the best retail brokers out there IMO and masters of options). It is unfortunate they do not have P&F charts.
 
Quote from HolyGrail:

As far as I am concerned this thread is finished. I really don't believe I have anything else to contribute. I want to thank everyone for participating, and I sincerely do hope this has helped someone.

I am leaving you with a synopsis of our discussion.

Good Trading & Good Luck!!!
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ooops, guess I should have read further before replying to things
 
Hello HolyGrail,

Like many who have written on this thread, I'd like to offer my thanks for your contribution. Although it is probably a little too soon to tell for certain, so far using PnF charts has made a very significant difference to my trading.

A couple of comments:

1. Helps me know when not to trade. It is easier to see when the markets are not moving enough for momentum / breakout style trading. I have MUCH smaller drawdowns on bad days.

2. Helps me clearly identify the higher probablility trades. It's helped me push my win ratio from the low 60s% to mid 70%, which is the difference between a lot of frustration, and decent gains most nights.

3. It's helped my confidence and discipline because the rules are easier to apply.

4. Finally, the boxes cut down on the market noise, especially because I trade the HSI a lot.

I mainly trade the asian markets as I live on the east coast and have a day job. Between 9 and 10:30 the HSI and SPI offer pretty good trading. Tonight was a good example. The triangle that broke to the downside around 11pm est was a thing of beauty. More than 300 pts in around 30 minutes (~usd 2k / contract). :)

I just want to say I'm very grateful for turning me on to PnF charts.

Sincerely, b
 
Quote from byzantium:

Hello HolyGrail,

Like many who have written on this thread, I'd like to offer my thanks for your contribution. Although it is probably a little too soon to tell for certain, so far using PnF charts has made a very significant difference to my trading.

A couple of comments:

1. Helps me know when not to trade. It is easier to see when the markets are not moving enough for momentum / breakout style trading. I have MUCH smaller drawdowns on bad days.

2. Helps me clearly identify the higher probablility trades. It's helped me push my win ratio from the low 60s% to mid 70%, which is the difference between a lot of frustration, and decent gains most nights.

3. It's helped my confidence and discipline because the rules are easier to apply.

4. Finally, the boxes cut down on the market noise, especially because I trade the HSI a lot.

I mainly trade the asian markets as I live on the east coast and have a day job. Between 9 and 10:30 the HSI and SPI offer pretty good trading. Tonight was a good example. The triangle that broke to the downside around 11pm est was a thing of beauty. More than 300 pts in around 30 minutes (~usd 2k / contract). :)

I just want to say I'm very grateful for turning me on to PnF charts.

Sincerely, b
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byzantium,

Would you be able to share your settings on your P&F chart for intraday trading of the Asian markets? Not your trading setups, just your settings for displaying the P&F intraday. If not no problem.

Thanks in advance.

John
 
Quote from byzantium:

Hello HolyGrail,

Like many who have written on this thread, I'd like to offer my thanks for your contribution. Although it is probably a little too soon to tell for certain, so far using PnF charts has made a very significant difference to my trading.

A couple of comments:

1. Helps me know when not to trade. It is easier to see when the markets are not moving enough for momentum / breakout style trading. I have MUCH smaller drawdowns on bad days.

2. Helps me clearly identify the higher probablility trades. It's helped me push my win ratio from the low 60s% to mid 70%, which is the difference between a lot of frustration, and decent gains most nights.

3. It's helped my confidence and discipline because the rules are easier to apply.

4. Finally, the boxes cut down on the market noise, especially because I trade the HSI a lot.

I mainly trade the asian markets as I live on the east coast and have a day job. Between 9 and 10:30 the HSI and SPI offer pretty good trading. Tonight was a good example. The triangle that broke to the downside around 11pm est was a thing of beauty. More than 300 pts in around 30 minutes (~usd 2k / contract). :)

I just want to say I'm very grateful for turning me on to PnF charts.

Sincerely, b
More...

I agree totally with your comments. The difference before pnf and after was like night and day for me. I hope it can do the same for you.
 
Hey all,
A recent trade I made (forgot to post about it when I was thinking about it) was CMI when it was at 58. I closed a couple days ago when it was at 69 (got pissed when it kept going up to 70 but happy now, haha)

The problem is, the signal came a couple days before its earnings came out, and while I knew this because I looked into the company and did some research before I went in, I thought it'd be helpful to warn people when holding onto longer term P&F based positions that news events (that you can know about in advance) may cause a P&F chart to fail you (like if earnings were TERRIBLE, compared to market expectations).

Anyway, other trades I made around the same time were long NE, IBN, COH, CELG. These are either underwater or about breakeven, but more than offset by CMI.

With regards to position trading, does it seem feasibly to take the private equity approach, and hope for lots of breakevens/slight losses and 1 or 2 homeruns?

Ideally, I would like to use P&F to do position trading which are less stressful and time consuming than intraday trades.
 
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