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Intraday Point and Figure Trading

  • #41
  • Edited Apr 4, 2009 9:10am Apr 3, 2009 7:34pm | Edited Apr 4, 2009 9:10am
Nice .... thanks, FXSurfer. When I try to load this indicator MT4 (Build 221) just freezes. Any ideas why?

Thanks, in anticipation. Richard.

Edit: It's OK. It's fixed now; although I'm not quite sure exactly which change(s) I made caused it to work OK ... much "trial and error"! Richard.


Quoting FXSurfer
Here's a pretty nice P&F mq4 to check out guys.

Good Trading!

Brent
  • #42
  • Apr 3, 2009 8:20pm Apr 3, 2009 8:20pm
Just a quick heads up from someone not familiar with what you're actually doing here, but if getting the "tick data" and P&F charts is what some of you are asking about, be aware that Accucharts from FXSolutions provides this option with the ability to change the most or all of the parameters on the display.

I've included a couple screenshots of the EU toggled over to P&F.

Charts are free with a demo account. Hope it helps...
Attached Image(s) (click to enlarge)
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FUBAR...
  • #43
  • Apr 4, 2009 2:21am Apr 4, 2009 2:21am
  •  Yuppie
  • Joined Jun 2007 | Status: ̿ ̿ ̿̿'̿̿\̵͇̿̿\=(•̪●)=/̵͇̿̿/'̿̿ ̿ | 2,727 Posts
Quoting ak4x
Just a quick heads up from someone not familiar with what you're actually doing here, but if getting the "tick data" and P&F charts is what some of you are asking about, be aware that Accucharts from FXSolutions provides this option with the ability to change the most or all of the parameters on the display.

I've included a couple screenshots of the EU toggled over to P&F.

Charts are free with a demo account. Hope it helps...

Thank you ak,

Will check them out over the weekend...


Magnus
  • #44
  • Jul 9, 2009 5:56pm Jul 9, 2009 5:56pm
When the boxes form a double top or bottom, do you simply just go long or short as soon as the next x or O appears?
You can't place orders using this as the boxes appear at different highs or lows...
  • #45
  • Jul 9, 2009 6:01pm Jul 9, 2009 6:01pm
Is their any rules of thumb or tips on box size ?
all pairs have different ATR or daily ranges i would think they should use differant box, reverse size ?
  • #46
  • Jul 10, 2009 2:52am Jul 10, 2009 2:52am
Quoting SanMiguel
When the boxes form a double top or bottom, do you simply just go long or short as soon as the next x or O appears?
You can't place orders using this as the boxes appear at different highs or lows...
There are two possible ways. The first one is, that you enter with a market order as soon as the price has been reached where a double top is formed.

The other one is the one that I use most of the time. By looking at the chart you can see where the price has to reach in order to form a double top. At this price you put a pending order. And as soon as the double top formation (or any other) is formed, your pending order is triggered and you are in the market.

I think the first method is called reactive and the second one proactive trading approach.


Quoting toddanderson
Is their any rules of thumb or tips on box size ?
all pairs have different ATR or daily ranges i would think they should use differant box, reverse size ?
You are right, the box size has to be adjusted to the market. But also for the time horizon that you are trading. If you are daytrader, you would prefer box sizes of 5 to 10 pips maybe, while a swing trader may feel comfortable with 10-25 and an investor with 25-100 pips boxsize.

I am daytrader and like 10 pips boxsize most. But for some pairs, I also choose 5 pips boxsize, like for EURGBP.

You have to check it out what fits best to your time horizon and market.
  • #47
  • Edited 9:31am Jul 10, 2009 6:55am | Edited 9:31am
Quoting adamp
There are two possible ways. The first one is, that you enter with a market order as soon as the price has been reached where a double top is formed.

The other one is the one that I use most of the time. By looking at the chart you can see where the price has to reach in order to form a double top. At this price you put a pending order. And as soon as the double top formation (or any other) is formed, your pending order is triggered and you are in the market.

I think the first method is called reactive and the second one proactive trading approach.

You...
In my charting software it gives me the high and low of the column. So for example on a double top, I can see that the first top is a high of 1.6125 and the 2nd top is a high of 1.6130, ie the 2nd was slightly higher.
So, you would place an order past 1.6130, maybe give it a buffer of 5pips?
What about stop losses, can you base these off PF charts?

Also, what timeframe do you use this on? On anything less than daily, the chart seems to change every few mins.

And lastly......I'm reading Du Plessis' book but it looks like trendlines can only be drawn in at 45 degree angles. What if you have some points on your chart that make a trendline less or mroe than 45 degrees? Why wouldn't it be valid, it's still a trendline after all.
  • #48
  • Jul 12, 2009 11:26am Jul 12, 2009 11:26am
Quoting SanMiguel
In my charting software it gives me the high and low of the column. So for example on a double top, I can see that the first top is a high of 1.6125 and the 2nd top is a high of 1.6130, ie the 2nd was slightly higher.
So, you would place an order past 1.6130, maybe give it a buffer of 5pips?
What about stop losses, can you base these off PF charts?

Also, what timeframe do you use this on? On anything less than daily, the chart seems to change every few mins.

And lastly......I'm reading Du Plessis' book but it looks like trendlines can only be...
I have included a screenshot of the current USDCHF chart. Setup is 5 pips box size and reversal of 2 boxes to explain how you can use P&F charts for trading.

You see the current price at 1.0846, the current bearish resistance trendline (dotted red) is valid (a sell signal already occured) and we want to trade the next sell signal.

The last column of O's had a low at 1.0830 and a double bottom break would occur if 1.0825 was reached. You would now set a pending sell order at 1.0825.

The initial stoploss can be put above this signal upmost column. Depending on your risk aversion, you might want to put it one, two or even more boxes above the high of the last column(s). In this case, I put it 1 box above the last column of X's, at 1.0865.

Remember that you must add the spread to this price, since a sell order will be closed at ask price. With a spread of 2 pips, you would put the stoploss at 1.0867.

Regarding timeframe: Sure you have more "noise" the smaller the timeframe you choose. But the signals are clear, though. I am using the smallest timeframe available, until the resulting chart is big enough to fill my whole screen. The bigger the box size, the higher the timeframe you probably need to use.

The trendlines do not need to be 45 degrees, but this angle is commonly used. I added another possible trendline to demonstrate this (red line). Compared to the blue trendline below, this one shows the break of the trend earlier. Trendlines with variable angle are most used in such strong up- or down-movements like in this example. Another way would be to use a 45 degree trendline that is shifted (blue line).

One big advantage of P&F charting ober common bar/candlestick charts is, that it has clear rules of construction and thus, the charts are very objective. By using trendlines with angles different than 45 degrees, you are adding subjectivity to the charts because the rules for construction those trendlines are not strict anymore. That's why 45 degree angles dominate. But others angles are possible of course.
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  • #49
  • Jul 12, 2009 11:31am Jul 12, 2009 11:31am
Their is never any clear rules on box size ? Or is their



Quote:
One big advantage of P&F charting ober common bar/candlestick charts is, that it has clear rules of construction and thus, the charts are very objective. By using trendlines with angles different than 45 degrees, you are adding subjectivity to the charts because the rules for construction those trendlines are not strict anymore. That's why 45 degree angles dominate. But others angles are possible of course.




Quoting adamp
I have included a screenshot of the current USDCHF chart. Setup is 5 pips box size and reversal of 2 boxes to explain how you can use P&F charts for trading.

You see the current price at 1.0846, the current bearish resistance trendline (dotted red) is valid (a sell signal already occured) and we want to trade the next sell signal.

The last column of O's had a low at 1.0830 and a double bottom break would occur if 1.0825 was reached. You would now set a pending sell order at 1.0825.

The initial stoploss can be put above this signal upmost...
  • #50
  • Jul 13, 2009 3:46am Jul 13, 2009 3:46am
Quoting adamp
I have included a screenshot of the current USDCHF chart. Setup is 5 pips box size and reversal of 2 boxes to explain how you can use P&F charts for trading.

You see the current price at 1.0846, the current bearish resistance trendline (dotted red) is valid (a sell signal already occured) and we want to trade the next sell signal.

The last column of O's had a low at 1.0830 and a double bottom break would occur if 1.0825 was reached. You would now set a pending sell order at 1.0825.

The initial stoploss can be put above this signal upmost column....
Great explanation, thanks. So, how successful do you find this with forex and in particular the longer timeframes like 1hr, 4hr, daily?
  • #51
  • Jul 13, 2009 8:49am Jul 13, 2009 8:49am
Quoting toddanderson
Their is never any clear rules on box size ? Or is their
There are recommendations for box sizes, especially for stocks and idices. Don't have link for that right now, but you may look for 'chartcraft' box size setups.

But in the end, those are only recommendations and you will have to find out the size that fits best to the market or stock that you trade and your investment time horizon.
  • #52
  • Jul 13, 2009 8:53am Jul 13, 2009 8:53am
Quoting SanMiguel
Great explanation, thanks. So, how successful do you find this with forex and in particular the longer timeframes like 1hr, 4hr, daily?
I don't use higher timeframes/box sizes for trading, only to get the big picture of the market. To see where major support resistance will probably occur or if a trendline is near the current price.

Since trading P&F charts, I have improved my trading style a lot. I can exactly see where to put stoploss, when to trail the sl by hand and where to set it. I also get an idea of price targets and my overtrading has got better ever since using this type of chart.

It's not the holy grail, though. You will have to learn how to become a successful trade using this charts. And the best system is worth nothing if you are not disciplined in your risk and money management...
  • #53
  • Jul 23, 2009 3:11pm Jul 23, 2009 3:11pm
Quoting adamp
There are two possible ways. The first one is, that you enter with a market order as soon as the price has been reached where a double top is formed.

The other one is the one that I use most of the time. By looking at the chart you can see where the price has to reach in order to form a double top. At this price you put a pending order. And as soon as the double top formation (or any other) is formed, your pending order is triggered and you are in the market.

I think the first method is called reactive and the second one proactive trading approach.




You...
The double top is not the signal to buy though, it's the next x...for example.
So if a double top is formed at 1.5000 and you have a 10pip box size, you would have to enter the buy at 1.5010 because that is when the next X would be drawn?

My charting software doesn't allow me to draw 45 degree angled lines so I am guessing at what 45 degrees is - is this good enough?
  • #54
  • Aug 1, 2009 8:12pm Aug 1, 2009 8:12pm
Glad to see a thread dedicated to Point & Figure charting for Forex! I've used P&F for stocks for a while now, but am looking to test my skills with Forex. I have access to a plethora of cross rate P&F charts that are excellent for long term trends, but I am having trouble finding a solid P&F platform for Forex trading that updates in real-time since the charts I have access to only update once a day. I've downloaded all of the free add-ons for MT4, but I'm not totally happy with them. Frustrating not being able to find a solid P&F tool to trade Forex...
  • #55
  • Edited 12:31pm Sep 12, 2009 7:52am | Edited 12:31pm
adamp, could you tell us, where did you get this indicator from?
I mean, I have x/o chart indicator for metatrader but it draws boxes instead of x and o. I know it doesn't do any harm to the chart but I would like to see it's classical version with figures
Greetings,
Daniel.

Quoting adamp
I don't use higher timeframes/box sizes for trading, only to get the big picture of the market. To see where major support resistance will probably occur or if a trendline is near the current price.

Since trading P&F charts, I have improved my trading style a lot. I can exactly see where to put stoploss, when to trail the sl by hand and where to set it. I also get an idea of price targets and my overtrading has got better ever since using this type of chart.

It's not the holy grail, though. You will have to learn how to become a successful...
  • #56
  • Dec 16, 2009 3:07am Dec 16, 2009 3:07am
It's a pitty, that all Point & Figure Threads are not that active
  • #57
  • Dec 20, 2009 8:55am Dec 20, 2009 8:55am
Is there any program that can be used to backtest and optimize boxsize and reversals?

Metastock have one but i dont like that one, it is not programmed to only buy and sell double tops (buy and sell signals) the result differs from the real thing


Quoting adamp
There are recommendations for box sizes, especially for stocks and idices. Don't have link for that right now, but you may look for 'chartcraft' box size setups.

But in the end, those are only recommendations and you will have to find out the size that fits best to the market or stock that you trade and your investment time horizon.
  • #58
  • Dec 30, 2009 3:46pm Dec 30, 2009 3:46pm
I became interested in P&F only yesterday after learning what it was in the basic sense, and I have been trying to learn more about it with no luck, until I found this thread. I can see now, how valuable it can be.

I plan on using P&F on longer term charts. (Day, Week, down to 1 hour at the smallest) to assist my trading style.

I am not a scalper however, I am interested in developing a scalping strategy to use and I think that P&F will be a BIG part of it, based on what I know so far.

I like to keep things as simple as possible, and P&F fits that bill nicely.


Glad to find an active group of P&F traders!
  • #59
  • Dec 30, 2009 4:04pm Dec 30, 2009 4:04pm
I understand the basics of P&F, and I understand the variables of "Box Size" and "Reversal" however, I don't understand one aspect of the P&F which is preventing me from actually utilizing P&F in my trading.


What is the effect of "Chart Time" on a P&F chart?

I understand that P&F only accounts for price action however I notice when I change time frames on the chart and P&F has the same variables, the P&F changes, but I don't understand what the changes reflect.

Basically what's the difference when viewing the following P&F charts?

1) Box = 50 & Reversal = 3 while viewing P&F on a Day Time frame

2) Box = 50 & Reversal = 3 while viewing P&F on an Hour Time frame


Thanks
  • #60
  • Dec 30, 2009 8:56pm Dec 30, 2009 8:56pm
Quoting madmatz
I understand the basics of P&F, and I understand the variables of "Box Size" and "Reversal" however, I don't understand one aspect of the P&F which is preventing me from actually utilizing P&F in my trading.


What is the effect of "Chart Time" on a P&F chart?

I understand that P&F only accounts for price action however I notice when I change time frames on the chart and P&F has the same variables, the P&F changes, but I don't understand what the changes reflect.

Basically what's the difference when viewing the following P&F charts?

1)...
hmm you seem to really be missing some key understandings... charts are bad representations of price action in that they obscure the data. on 1min chart a bar has 4 pieces of data... open high low close... and on a 1millenium chart a bar still only has 4 pieces of data.... open high low close.

think about how much information has been lost. in a millenium a lot has surely happened. the same is possible for a 1min chart. tick data is the true data of exactly what is happening and everything away from that is purely a vague summary.

to answer your questions you first need to understand exactly what you are looking at on the different candle charts (hint - summaries). your question is exactly the same question as "why do my candles change when i change timeframes?". so, why do they change? what are they showing you? when you understand this then you can apply your understanding of what a p&f chart represents along with this understanding of different timeframe candles and you will have your answer!

remember, p&f charts are usually created from candle charts because that is the easiest and most available information. candles are vague. if you go up a timeframe then of course the p&f chart is now using a different vague representation of price action OVER TIME which it now must use to try to take out the time factor... hopefully you see the self-defeating aspect of p&f based on higher timeframe charts.

....

some things to think about...

1. why would you even use a higher timeframe than the very lowest (aka most accurate) chart to base your p&f from? with the most accurate data you can get (usually 1min, unless you somehow have access to tick data outside of actual live charts) you are able to set your p&f to represent whatever box and reversal size you like.

having a p&f of any higher timeframes is to me like taking a picture, lowering the resolution, zipping it, encrypting it, zipping it again... and still expecting to be able to see accurate information. without running off tick data we are already using obscured data!

2. tick data is already p&f, but at it's maximum zoomed resolution. a tick chart does not move based on time, it moves when the price moves. is this not the whole point of p&f? again, why would anyone degrade their p&f chart further than they are forced to by using anything but the lowest timeframe they are able to?
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