Learning to read Price Action with P&F Charting

If you are going to do position trading I strongly recommend that you keep some type of bullish % charts, and keep a pnf chart on the sector of the stock in question and make sure that both sector and stock are bullish or bearish.
 
Makes a lot of sense.

On a side note, has anyone used Quotetracker's PnF charts? It's what I use when I pretend to be an intraday trader.
 
Do you think it is possible to gather years of daily open/high/low/close data on the universe of stocks and do backtesting on the results of the various P&F strategies?

This could be another contribution to the thread, although with intraday data (off Yahoo) it possibly wouldn't provide much confirmation to intraday traders.

I am starting to look into this now, I think the biggest hurdle will be programming the actual rules and the nuances each have
 
I've used quotetracker before. It was better than I what I was using in the past, but does not compare to investor rt. Of course one is free and the other you have to pay for.

I'm sure you can backtest pnf, I just wouldn't want to be the one writing the program. It can't be easy.
 
I read a back test study a long time ago that went into some depth and I think someone even posted a link to it somewhere in this thread but it did not cover stocks.

I may get flamed for this but I'm not a big fan of back testing (however, I forward test every day).
 
Quote from HolyGrail:

I've used quotetracker before. It was better than I what I was using in the past, but does not compare to investor rt. Of course one is free and the other you have to pay for.

I'm sure you can backtest pnf, I just wouldn't want to be the one writing the program. It can't be easy.
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You could back test it in IRT, but if you are looking to back test 1000s of stocks or something that may be a different story heh.
 
hmm, I'll look into IRT.

Why are you not a fan of back testing? To avoid unrealistic fills, I want to assume buying/selling at the close and only use intra-day data.

What else can we do to make sure the results are accurate? I think this is a worthwhile endeavor, it'd make me more comfortable risking my money if I had some confirmation that the strategy works approximately X% of the time (and X > .60, lol)
 
i think to backtest a trading strategy must also include the bullish % reading,and also its p/f stance when the trade was taken.the bp% reading gives you a look at what the follow thru of the trade that was put on.
so some kind of correlation between the p/f signal on the stock with some bp% in the final analyis
is anybody in agreement with this.?
 
Quote from dentist007:

i think to backtest a trading strategy must also include the bullish % reading,and also its p/f stance when the trade was taken.the bp% reading gives you a look at what the follow thru of the trade that was put on.
so some kind of correlation between the p/f signal on the stock with some bp% in the final analyis
is anybody in agreement with this.?
More...

Absolutely!!!
 
Is there a way to get this percentage reading, similar to downloading the historical daily data from Yahoo? I'm not really sure what Bullish % is

I think the easiest one to test first would be double top/bottom breakout/breakdown, with a stop at the last column of O's?
 
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