Learning to read Price Action with P&F Charting

This topic was again raised. Most likely you'll be surprised if I tell you that when drawing P&F "High / low", you have a tench of support and resistance are not working. Drawing If P&F on the "Close", then you will be working through the support and resistance .
And why would we "High / low"? you ask. If drawing to "High / low" and there are visible graphic shapes, which are not described in any books on the P&F. Look carefully.
These figures are very expensive, and tench as well as support and resistance are profitable. For example in a standard TA is all well-known figure "Head-shoulders, in the P&F also have the figures but other. In soft BEB there are several such figures - such as a triangle. Look very carefully, that this figure does with the price?
....
All the breakthroughs at the double, and triple-top description here in the forum, nothing compared with the figures and lines of support and resistance.

Strategy is as follows:
1- to the graph of P&F on the "close".
2- to the graph of P&F on "High / low" for the exact purchase or sale.
3 -to the graph of P&F RS on the relative strength. Note that in effect, too Close to work through support and resistance.
4-Have matematiesky calculation chart Heikin-Ashi.
http://www.investopedia.com/terms/h/heikinashi.asp
5 - With the data Heikin-Ashi build schedule RSI (20-80), speaking with confidence in 80% of the By or sale.
http://stockcharts.com/school/doku....hnical_indicators:relative_strength_index_rsi
For RSI to pick up the value of "day" (14) itself.
With all this you can even trade Set the robot. What I'm doing today time.
P.S.
Heikin-Ashi + RSI is a very good indicator.
For RSI should have only the Close Heikin-Ashi .
Close (Heikin-Ashi )=(Open+High+Low+Close)/4
 
Quote from subq:

...the problem with that and one of the reasons for the rule... is that the column must be complete to have a set target, otherwise, the target could change as the column continues to change

Ahh, I see where your going with this. Until it is complete, it is a subjective call. It does need to be complete in order to properly set up R's for a trade entry.
 
Quote from yayt:

Maybe a ridiculous question, but, how often are these price targets hit?
i.e. what is the reliability of these patterns?

page 155...

Depends on the market posture, once again - but taking that into consideration... with uncanny reliability.
 
Quote from oraclewizard77:


...
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.


Props to you, Wizard. Now you are getting it.

In the late 60's, a study at the Univ. of Chicago/Booth School found that investors spent 80% of their time evaluating companies fundamentals and 20% of their time evaluating the market, sector and stock action. They had dismal results, on the whole. Their results would have been favorable had they reversed their efforts.
 
Quote from hayman:

Thanks ! I was curious what you use. Seems like 1 point size with 3 point reversal was a better indicator to catch recent down drift from DOW 13,000.

p 163

It may be best to stay with a two percent default as a primary guide and use a narrower universe like the SPX for something more responsive. Also of note is the number components of traditional BPI's

NYSE - 2700+ (primary LT trend - listed names)
Optionable BP - 3000+ (intermediate term indicator)
OTC - 5000+ (primary LT trend - Nasdaq)

In a pinch, you can add noise by speeding the chart up with a tighter box size, but - in addition to the SPX BP - there are shorter term BP's like the Hi-Lo Index and the Percent of stocks above their ten week MA. These are much quicker and act as early indicators.

I would use the SPX as a surrogate for the Optionable in its absence.
 
Quote from HolyGrail:

Just curious, how do you take losses quicker in high volatility? I normally have to widen my stops to stay in the trade.

Tighter on your entry - closer to your stop. Patience and discipline... if you don't get the fill, you save your capital.
 
Quote from HolyGrail:

Well I am done for the day. Didn't have many trades today, but I traded both NQ and ES. I had a 5 point gain on NQ that I let get to break even. (I set it up for an 8 point target, and left a helluva long 18 tic trailing stop). I also took a trade on the button trader simulator that I wanted to take in real time but didn't. Of course it was a good trade, lol.

Anyway, it was an OK day, nothing great.

You had been doing wonderfully until the BP's weakened... heed them!

As a suggestion, tighten your entry, double your position going in and flip the first one when your R/R is cut in half. Get more conservative with your target. Be very diligent with the remainder.


MS... I can't believe there are 90 pages left. I'm enjoying exercising my noodle once again. Great thread! But the ugly stuff is ahead... ... ...
 
Quote from ammo:

you could buy puts or calls for an overnight protection,they don't have to be 100% insurance, i.e. you could be short potash at 220 and buy the 230 calls on the close ,it would give you some protection on the upside and you would still profit if the stock opened down because you are not spread off 1 to 1,



X 10...
 
Quote from flyinglead:

... Which I will do in a month or two when my real job slows down and I have time to get everything set up.

p 171... 6/25/08


I'm hoping to learn that you didn't go live... ...
 
Quote from flyinglead:

After it breaks out, but then pulls back at least one box

DF gave a short signal at 18, then pulled back up a box. Buy thinking you may get in at a higher price, before it continues down, but it continues up. Still not stopped out tho.

p 175

The NYSE BPI reversed up in early July.


Market, sector, stock...!
 
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