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Trading with "Point And Figure"

  • #1
  • First Post: Edited Jan 6, 2009 3:32am Jan 4, 2009 8:02am | Edited Jan 6, 2009 3:32am
I am interested in testing the "Point And Figure" system.
If somebody else is trading this system please let us know how this is going.
Here is the indicator used with the system:
Attached File(s)
File Type: mq4 PointAndFigure.mq4   7 KB | 2,354 downloads


Regarding the settings for the indicator here is a link to the creator's post:
http://www.forexfactory.com/showpost...20&postcount=1

You can find the formula (P&F.pdf) for Entry/exit in post #11 of this thread:

http://www.forexfactory.com/showthread.php?t=93932
  • #2
  • Jan 4, 2009 4:57pm Jan 4, 2009 4:57pm
Quoting constin
I am interested in testing the "Point And Figure" system.
If somebody else is trading this system please let us know how this is going.
Here is the indicator used with the system:
Attachment

You can find the formula (P&F.pdf) for Entry/exit in post #11 of this thread:

http://www.forexfactory.com/showthread.php?t=93932
Constin, thanks for the links.

P&F is another way of summarizing data, and filtering out 'noise'. The same kind of thing can be achieved by using moving averages (although these don't show candle highs and lows) and other 'trend following' indicators, Heikin Ashi candles, or longer time frame candles...... and no doubt many other tools that don't immediately come to mind.

I don't think that one method is necessarily more (potentially) profitable than another. One still has to make an entry into a move, and the extent of summarization, which creates smoothing but at the expense of lag, determines how early or how late. In terms of what indicators you use, it's a case of whatever you feel most comfortable with.
  • #3
  • Jan 5, 2009 11:27am Jan 5, 2009 11:27am
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD CHART.png Size: 21 KB


Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD PROFIT.png Size: 7 KB
  • #4
  • Jan 5, 2009 1:41pm Jan 5, 2009 1:41pm
I haven't looked at P&F charts since I traded stocks a good few years back, but if I recall correctly, the highs and lows on the P&F blocks are supposed to match the price highs and lows.

At first glance, that doesn't appear to be the case in the chart in your previous post. Perhaps the indicator intentionally works to a different formula. Or perhaps it's because the time periods don't align, e.g. the last 4-5 P&F blocks are summarizing the the entire (viewable) price chart. I guess that's more likely, since P&F effectively removes time from the equation, and the block widths are all equal.

Anyway, I just thought that I'd bring it to your attention.
  • #5
  • Jan 5, 2009 1:44pm Jan 5, 2009 1:44pm
P & F charts dont work on time, its pure price. So the highs will match the price but it does not go with time.
Each time price moves a certain amount a new level is drawn untill price reverse then it moves a long one block.
Edit:
Hanover do u think they are any good? Oh and i notice u also state they remove time from equation, sorry didnt read ur post correct.
  • #6
  • Jan 5, 2009 1:46pm Jan 5, 2009 1:46pm
Thanks Fry, I suddenly realized that, and amended my post at the same time you were posting.
  • #7
  • Edited 2:18pm Jan 5, 2009 1:54pm | Edited 2:18pm
Quoting fry2010
do u think they are any good?
I think they are an effective way of summarizing price, and filtering out noise (see post #2 in this thread). Obviously you lose the ability for a 'traditional' time/price analysis (e.g. WD Gann), if you restrict yourself to the P&F blocks only; whether or not that is important that is depends upon your method. The PDF in the link provided by Constin shows some potentially effective ways of interpreting and trading P&F. Most of the entries are breakout-based.

[Edit] Skimming thru the illustrations in the PDF has just reminded me of the way in which P&F redefines (as opposed to eliminates) time. Diagonal trendlines are drawn through the boxes, and horizontally calculated price targets are based on the number of boxes, each of which could potentially represent any amount of 'real' time. How effectively would such a trading system work in forex? The forex market model is more complex than stocks, but here is my best guess. Breakouts thru horizontal S/R would work much the same way as conventional breakout trading. Breakouts thru diagonal trendlines etc may be less effective if one believes in self-fulfilling prophecy, i.e. more traders are likely to anticipate a conventional trendline break, and generate the required order flow to make price move. Beyond that, I would need to do some significant testing (which I don't really have time for). Of course there may be other ways of trading P&F other than those described in the PDF.
  • #8
  • Jan 5, 2009 2:52pm Jan 5, 2009 2:52pm
Here are the results still going of my first 3 trades ever placed with this indicator:
Attached Image (click to enlarge)
Click to Enlarge Name: First 3 trades.png Size: 15 KB


chfjpy and eurjpy it's been hanging around zero zone and gbpusd it's been going up since placing the trade.

I'm still studying the indicator to understand how it works.

Thanks
  • #9
  • Jan 5, 2009 3:17pm Jan 5, 2009 3:17pm
I've been working with point & figure for about 2 months. Using one minute charts, entry or re-entry at the 38 to 50% pullback levels seem to generate good returns in the direction of the pair's trend, particularly a highly volatile pair like the EUR/JPY. Watch this pair as it seems to consistently go bullish after the stock market close(whether the S&P is up or down), and any dips to the retracement levels generally present excellent buying opportunities and may be bouyed by breakouts. If you enter with a 50 pip stop, then enter a trailing stop...
  • #10
  • Jan 5, 2009 3:36pm Jan 5, 2009 3:36pm
accucharts has point and figure charts
  • #11
  • Jan 5, 2009 3:39pm Jan 5, 2009 3:39pm
Quoting Saintroman
accucharts has point and figure charts
If you don't mind me asking, are the accucharts different from the ones we have here?

Thanks
  • #12
  • Jan 5, 2009 3:42pm Jan 5, 2009 3:42pm
I know that the point and figure is pure price and not time but what timeframe you choose to trade this system because the X´s and O´s looks diferent in other timeframes.
  • #13
  • Jan 5, 2009 3:43pm Jan 5, 2009 3:43pm
Is the charting package from the broker FX solutions
  • #14
  • Edited 2:50am Jan 6, 2009 2:28am | Edited 2:50am
I don't understand why this great thread got moved from trading discussion to programming discussion !
  • #15
  • Jan 6, 2009 4:01am Jan 6, 2009 4:01am
Attached Image (click to enlarge)
Click to Enlarge Name: p&f settings 2.png Size: 82 KB
  • #16
  • Jan 6, 2009 6:41pm Jan 6, 2009 6:41pm
Quoting hanover
Constin, thanks for the links.

P&F is another way of summarizing data, and filtering out 'noise'. The same kind of thing can be achieved by using moving averages (although these don't show candle highs and lows) and other 'trend following' indicators, Heikin Ashi candles, or longer time frame candles...... and no doubt many other tools that don't immediately come to mind.

I don't think that one method is necessarily more (potentially) profitable than another. One still has to make an entry into a move, and the extent of summarization, which creates...
Thank you David.
  • #17
  • Edited 6:27am Jan 7, 2009 6:26am | Edited 6:27am
Attached Image (click to enlarge)
Click to Enlarge Name: waiting eurusd break out.png Size: 26 KB


Very nice setup
  • #18
  • Jan 7, 2009 6:31am Jan 7, 2009 6:31am
Quoting coonhound
I've been working with point & figure for about 2 months. Using one minute charts, entry or re-entry at the 38 to 50% pullback levels seem to generate good returns in the direction of the pair's trend, particularly a highly volatile pair like the EUR/JPY. Watch this pair as it seems to consistently go bullish after the stock market close(whether the S&P is up or down), and any dips to the retracement levels generally present excellent buying opportunities and may be bouyed by breakouts. If you enter with a 50 pip stop, then enter a trailing stop...
Thank you coonhound for bringing up the fibs
  • #19
  • Edited 5:13pm Jan 8, 2009 4:32pm | Edited 5:13pm
Attached Image (click to enlarge)
Click to Enlarge Name: PointAndFigure test 1.png Size: 24 KB


Here are some trades taken with Point and figure S/R breakouts 10 pips box.
I will post the results later.
  • #20
  • Jan 9, 2009 4:48pm Jan 9, 2009 4:48pm
Attached Image (click to enlarge)
Click to Enlarge Name: PointAndFigure test 1 results.png Size: 28 KB
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