Dislikedhmm you seem to really be missing some key understandings... charts are bad representations of price action in that they obscure the data....Ignored
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Dislikedhmm you seem to really be missing some key understandings... charts are bad representations of price action in that they obscure the data....Ignored
Dislikedhmm 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...Ignored
DislikedI 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...Ignored
Dislikedagree about using tick charts
however one problem is when looking at "the big picture" say a year or two (or more) you need a lot of ticksIgnored
Dislikedhmm you seem to really be missing some key understandings... charts are bad representations of price action in that they obscure the data.Ignored
Dislikedon 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.Ignored
Dislikedyour 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!Ignored
Dislikedremember, 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.Ignored
Dislikedsome 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...Ignored
Disliked2. 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?Ignored
Dislikedwhat bigger picture? does events from a year or more ago really influence the present price action? serious question as I do not know one way or the other. i have doubts that any past data influences the present / future, but i'm not one to suggest this is fact.Ignored
DislikedSo, although bar/candle charts are not a pure representation of price action. That's also not their purpose. Time is part of the equation for a reason. I could elaborate more however, my bar strategy is efficient, and I'm here to create a P&F strategy.Ignored
QuoteDislikedI'll have to disagree with you here. Information lost? Or, do you mean information summarized?
QuoteDislikedRemember nubcake, summaries have a purpose, and although a summary does not display every piece of data... That's the inherent point of summarizing! To
communicate the general point/direction of something.
QuoteDislikedI think part of the miscommunication here is due to perspective. You infer that a 1millennium bar has lost a lot of information. Well, that's not correct. A 1millennium bar has summarized data for that time period, and although it would be utterly useless for any practical trading, it would have value when analyzing an Age (1,000 millennia). After all, studying a 1 minute chart to analyze an Age would be just as useless as studying a 1millennium bar to analyze present price action.
QuoteDislikedThe questions may be similar, but they are not "exactly the same question".
1) Candles/Bars, represent price action within a specified time frame.
2) P&F's in theory, represent price action in movement of "X units" regardless of time. (Obviously the theory is not entirely efficient.)
The two questions are quite different because, one measurement includes time as a variable while the other measurement attempts to exclude time as a variable.
QuoteDislikedSo, learning how time frame change on a P&F chart affects data is not accomplished by understanding how time frame change on a Candle chart affects data. They may be related, but they are not the same.
QuoteDisliked1) Closing price is the data used to calculate the P&F chart (at least the chart I'm using).
This makes sense of why the changes happen when time frames change. Even though the changes are not major with regard to price. (I'll post a chart comparison)
QuoteDisliked2) Smaller time frames lack historical data and skew the chart view (depending of course on Box size).
This explains, when I change from day to 30 min P&F. There is less historical data, and less price action within the lower time frame. (based on box size and the specific market at the time.) Perhaps this is only an issue with GFT's P&F.
QuoteDislikedI understand your "resolution analogy" however, I'm guessing that you are a much shorter term trader than I. Again the misunderstanding comes down to perspective.
QuoteDislikedLet, me explain my perspective with an analogy...
I trade the market much like a surfer rides a wave. When you look at a wave, it is very obvious that it is a wave however, you can look closer (zoom in) and see a lot of smaller waves on the main wave. Even though the smaller waves exist, surfers do not try to ride the small waves on the main waves. The surfer knows that the larger waves will influence his movement through the ocean much more than the smaller waves. The smaller waves are considered choppiness, and have no real influence on the movement...
QuoteDislikedI do understand that scalping can be profitable however, I do not have any sort of scalping strategy to use at the moment. When I create one, or find one that works nicely I will automate it and use it to trade a separate account. From my perspective, it is much less stressful and enjoyable to surf the market.
QuoteDislikedP&F can be leveraged with any style of trading. Obviously if I'm holding trades longer, it becomes less efficient, to analyze the small time frames.
To counter your example. It would be like trying to appreciate the size of the Grand Canyon by looking through a microscope.
QuoteDislikedTick data is not P&F. Tick data is extremely noisy, and does not take into account reversals. Every change is recorded with tick data. P&F ignores price volatility proportionately to the Box setting. That's one of the original purposes of P&F. To get a better general picture of the direction of a specific market.
QuoteDislikedI do see the value of using tick data however, there are some problems.
1) The P&F chart (the GFT one) will not interpret tick data
2) The amount of tick data (historically) is not enough for my strategy. It would be fine for scalping however, I'm not a scalper.
QuoteDislikedIf there is a P&F charting application that can be used with tick data I would be interested in hearing about it. It is not necessary to use tick data though, unless you enter and exit based on extremely small differences in price. Which I do not.
QuoteDislikedSo for now, I will use at the smallest, a 1 Hour time frame but more realistically a 4H, 8H, or Day time frame. Assuming I continue to use GFT's P&F chart.
QuoteDislikedI just realized how long this post was!
QuoteDislikedWell, writing it definitely accelerated my understanding of P&F.
Thanks,
Mark
DislikedThe bigger picture = picture of the market on a longer time frame. The big picture exists just as much as the little picture does. The only real difference is the frequency and magnitude with which change occurs....Ignored
DislikedIs there a difference between Point & figure and Three LineBreak ? While they are identical three line break is more colorful and easier to understand.Black shoes,white suit, neck,very easy to spot,neck black suit black shoes are easy buy and sell signals.Not much to learn or understand.Both type of charts are lagging price,with very late entry and large stop loss.They are best used for confirmation of a trend change or a trend continuation.Using these charts alone as a trading system can be very Risky.Ignored
DislikedPoint and figure is not lagging because there is only price level.. there is no time, so the lagging is also unincludedIgnored