Learning to read Price Action with P&F Charting

Very Good trading HolyGrail. I am going to do the reverse of using fundalmental news to find a stock and ta to know when to get in.

Instead I will use for example pandf to find the stock, then do fa to determine if i want to invest / trade in it on a longer term basis.

I did sell some of the stock that had a reversal signal to limit my risk, but may buy more at a better price or on a new bullish pandf signal.

It seems none of you use S and R with pandf, but in my own system, I find it to be of some benefit.

Quote from HolyGrail:

I just don't have the time. I have neglected my business entirely too much, and THAT is my livelihood. Basically what I do now is look about once every hour or two and see if there is anything brewing on ES or NQ. If I trade I keep it to less than 3 trades a day, and let the chips fall as they may.

One thing I have noticed is that it is a good thing to have both nq and es charts up at the same time. I'm not going to come right out and say the nq leads ES, but I can say that there will be no sustained moves in ES without nq showing the same thing. When they are totally out of sync it is not worth taking on any trade.
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I thought that PandF gave more clear signals vs candlesticks or other technical tools. But at least stockcharts will ignore support and resistance.

Quote from yayt:

what do you mean by S and R ? Support and resistance ? I thought that's exactly what pnf made more clear
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Quote from oraclewizard77:

I thought that PandF gave more clear signals vs candlesticks or other technical tools. But at least stockcharts will ignore support and resistance.
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If my target is small(3 points or less) I will consider s and r and take the easy profits right before it reaches that area. If I am playing a larger target I will not worry about s and r and just move my stops below the previous 0 column if long, or x column if short.
 
Holy Grail, doesn't having your stop below the previous O column (or X column) expose you to potentially large losses (i.e. 10% or more?)
Is this acceptable as part of your trading strategy?
This is the one thing that's bothering me about PnF - I feel like, for my own personal trading, a better exit strategy is necessary.
 
Quote from yayt:

Holy Grail, doesn't having your stop below the previous O column (or X column) expose you to potentially large losses (i.e. 10% or more?)
Is this acceptable as part of your trading strategy?
This is the one thing that's bothering me about PnF - I feel like, for my own personal trading, a better exit strategy is necessary.
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Your loss is never more than your original stop loss. You are moving that stop loss up as the price moves in your direction. If the risk is too much for your risk tolerance because the signal is far from where you would have to place your stop then don't take the trade.

Before you take any trade you have to decide at what point you would be wrong in your original assessment, and compare it to your potential reward. If it is greater than one to one I will normally take the trade. I prefer higher, but my winning percentage on trades is greater than 60% so one to one will still yield a decent profit.
 
Here is an example of what I am talking about and what your thought process should be. It's just an example because I would probably not take this long trade because it is counter trend. If I did take the trade it would be for the easy money to 44.
 

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Quote from yayt:

Maybe a ridiculous question, but, how often are these price targets hit?
i.e. what is the reliability of these patterns?
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they are some of the most accurate "targets" I have seen...that is, comparing all sorts of methods for "targets" on trades
 
Quote from oraclewizard77:

I thought that PandF gave more clear signals vs candlesticks or other technical tools. But at least stockcharts will ignore support and resistance.
More...

P&F shows you support/resistance quite well actually

it is a "pure" view of supply/demand
 
Quote from HolyGrail:

Your loss is never more than your original stop loss. You are moving that stop loss up as the price moves in your direction. If the risk is too much for your risk tolerance because the signal is far from where you would have to place your stop then don't take the trade.

Before you take any trade you have to decide at what point you would be wrong in your original assessment, and compare it to your potential reward. If it is greater than one to one I will normally take the trade. I prefer higher, but my winning percentage on trades is greater than 60% so one to one will still yield a decent profit.
More...

Another great reason to use P&F, the risk/reward is very clear before you even take the trade...very objective. If the risk/reward is not to your liking, you pass on the trade.
 
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