Intraday Point and Figure Trading

lol you traded based on p n f and it ended in tears. i believe some very clever and wise person predicted this earlier.

The entry was great and I rarely have bad entries based on P&F (then again I day trade for only 2 weeks now). The problem is with exits. I am afraid that it either leaves too much money on the table or the stops are too wide.

Midas --

You have probably learned several very positive things:

1) "aggressive" and PnF probably don't mix
2) you may now agree with me that PnF does provide a useful entry points. Personally, I think you must devise alternative exits to be successful. Traditional PnF exits keep you in too long (usually).

I still think working on the right mix of exit points depending on your trading strategy is crucial to your positive sloping equity curve.

For me, if I am in positive territory, I'm not giving too much back, but I am looking for slow, sustained growth. I think this works.

Best, Forest

Before you enter the trade, you have to check the overall situation first. Make sure that you know if the market is currently in a correctional movement or if it is in the direction of the trend.

If the 1 hour chart (or 25x2 setup in P&F for example) is in an uptrend and you enter a short trade in 5 minutes chart (or 5x2 in P&F), because you got a signal, then you should not expect too much movement, since the movement in 5min chart may only be a correctional movement of the higher trend.

It would make more sense to enter a long position as it occurs, because then you could expect greater, faster, clearer moves.

Yes, P&F gives clear signals. But you should still check wether this signal is in the direction of the higher trend. If not, you can still make the trade. But don't expect too much and take your profits earlier if market changes direction again.

Entries in trading are not that important. Only your exit decide wether you have made a win or a loss. Most of my trades, I don't exit manualy, but by being stopped out by the market. You need to know what you want to trade, before you enter a trade: trade the breakout, trade the move or trade the trend?

If you only want to trade the breakout, you can exit after 1 box has been created for example. Your stop is very tight, too. And your position is huge.
If you want to trade the move, you would exit as soon as the first reversal occurs.
If you want to treade the trend, you wait for reverals and if a new high is formed, you trail your stops and put them below/above the last local low/high.

Again, this is not a special trading technique from Point & Figure charts. You should always know what you want to trade, no matter which charts you are using. But Point & Figure charts are very clear as their rules are very strict and you can exactly see reversals and breakouts. It's very easy to trail a stop and see the point for your initial stoploss.

Wow, that is a nice perspective to see things. I guess for day trading purposes, from what I have seen so far, trading the move works best.

@Forest-Sea
Another valuable lesson I have learned is that if a trade is intended as daytrade, don't let it continue overnight unless you (me) intend to pamper it all night. Tomorow is a different day and small time frames are too sensitive even for point and figure charts.

hi, how it's going on guys?

I am waiting for this!

So far excellent results with point and figure and I am very happy with it. However as I am going back in the chart I see situations like that in the chart I am attaching.

http://img822.imageshack.us/img822/1879/eurusd.gif

This is an hourly chart with 20 pips box size and 3 boxes reversal. Apart from some shorting opportunities followed by poles, I mostly see the price is undecided which way wants to go. It comes from above and now has stalled. So I am thinking some possibilities here.

1. Wait for the chart to give a signal to one direction, up or down. If there is a second signal in the direction of the first, take it.

2. Take whatever high probability signal comes but get out if 2 boxes are broken since it looks so trendless?

3. Alter the size of the box? How can I decide when and how much?

4. As Jesse Livermoore puts it "Go fishing"?


From what I se in the according bar chart

http://img153.imageshack.us/img153/2923/eurusd.png

it seems that one should totally stay out of the trading those days. However P&F looks so inviting.

Please ignore the gap March 12 to March 25. I am afraid I am missing some data.

Welcome Kmidas,

I agree with your 1 and 2 points.
If there is noticeable clear trend on simple chart(non PNF) D1 H4 charts then i propose 20x3 even 30x3.
If you prefer daytrading or smaller time frames(non PNF): M5 M15 M30 then use 5x3 10x3 10x2


Can you show me how you Cute Point and Figure chart looks now at M1 on EUR/USD with 20x3 box/reverse size?

I prefer higher time frames as I work during the day and I can't watch the market. 4H or daily would be ideal for me. However since when I will go live I will start with a small capital and I can't afford so wide stops I will make one trade in the evening in 1M time frame which so far has yielded me some good results.

My chart 1M 20x3 now looks like this
http://img29.imageshack.us/img29/764/eurusdg.gif

That trade you see there was entered in the 4H time frame again 20x3 and since I am at the break even I am letting it over the weekend to see how it will develop.

Thanks Kmidas, my posittion is worse a little

http://gyazo.com/dd79b388e0cc45f1770059f9846f550f.png

I see that our charts are somehow different in the far left side. I guess you have more accurate historical data than me.

that must be those GAPS mentioned by you at post #107. I think that is the problem of our brokers - history data could be corrupted or MT4 had difficulties with downloading it.

I saw your recent post on another thread, pointing to this one


I too am a P& F trader - looking forward to chatting with all of you tomorrow


Thanks!

-Al Mo

It will be pleasure to discuss with you!
By the way - what soft or indicator do u use to chart PnF ?

I'm currently coding a version of P & F

Mine is sadly a CPU hog, but I have found dropping the number of available bars and Max bars to something like 2000/5000 seems to improve things dramatically.

I like Cute PnF , and I may eventually switch to that if I can't figure out how to correct a scaling issue in mine.

At this time, I am using PnF to scalp - I have just taken a long position for the EURUSD

Sometimes these scalps are super quick, and other times I need to add another position before it goes my way (as in this case)

Let's see how it goes

This will be my last post for now- starting to look like I am hogging the board.

EUR appears to have topped and starting to decline so I am shorting, along with GBP

Nice trading Almo!
I see auto patterns at your indicator window, have you used buffer info or what to make them?

Why you are not trying to touch bigger box sizes? (long time trading)