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Point & Figure Analysis

  • #121
  • Feb 13, 2015 4:20am Feb 13, 2015 4:20am
Quoting redgreen
I am starting to really like these charts. I am only starting chapter 3 of the book, can't wait to read it all so I could understand better how to trade with them. {image}
Good to hear you're getting into the charts!

One thing I'd say is that P&F doesn't really use trend lines in the traditional sense. They're meant to be 45 degrees, which is why we use P&F charts on a square grid. Software implementations always seem to overlook this fact - another frustrating thing. Yes you can scale a chart and make it look close. But it isn't.

Du Plessis does talk about 22.5 degree trend lines in his book, but i've never used them.

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  • #122
  • Feb 13, 2015 5:16am Feb 13, 2015 5:16am
Thanks for clearing that out kinsale. In that case I saw the price bouncing hundreds of pips from the trend line and I thought it was relevant. As I said, I need to continue reading the book in order to figure out exactly how these charts should be analyzed.
  • #123
  • Feb 13, 2015 5:39am Feb 13, 2015 5:39am
Quoting redgreen
Thanks for clearing that out kinsale. In that case I saw the price bouncing hundreds of pips from the trend line and I thought it was relevant. As I said, I need to continue reading the book in order to figure out exactly how these charts should be analyzed.
You probably can use normal trend lines (non 45 degree) so I wouldn't completely disregard it but generally i'd use the 45 degree lines.
  • #124
  • Feb 13, 2015 5:46am Feb 13, 2015 5:46am
Quoting KinsaleForex
{quote} You probably can use normal trend lines (non 45 degree) so I wouldn't completely disregard it but generally i'd use the 45 degree lines.
At first I thought what I drew was at 45. After a closer look I realized that you are indeed right.
  • #125
  • Feb 13, 2015 6:54am Feb 13, 2015 6:54am
Quoting redgreen
I am starting to really like these charts. I am only starting chapter 3 of the book, can't wait to read it all so I could understand better how to trade with them. {image}
Without Trendlines thr is no P&f.. i strictly use it because it has helped me to stay with the trend..
If am Counter Trading against main Trend it has helped me to knw the levels whr will i find support or demand, from tht level i will use trail stops to book profits...
So Trend line is must..

Now to Conclude ur doubt thr r 2 ways of using Trendlines
1.45 Deg Trendline
2. Subjective Trendline

45 Deg TL will give u simple & straight forward reactions..
Subjective TL thr r times u can use it, in the AUDUSD pair before the fall, i used the subjective TL which was working fine..

So no wrong in using subjective TL's but always keep ur 45 TL in mind or draw it in ur sheet for reference..

This is whr excel sheet is so simple in using.. u can draw a line with angle's marked the way u want.. the software programs doesnt allow u to draw a exact 45 TL, which is most of the time becomes Subjective TL..

Quoting redgreen
Thanks for clearing that out kinsale. In that case I saw the price bouncing hundreds of pips from the trend line and I thought it was relevant. As I said, I need to continue reading the book in order to figure out exactly how these charts should be analyzed.
From this image its a subjective line not the exact 45 deg TL, but u can notice the Price has bounced from this level multiple times finding support..
P&F is all about finding supply & demand, if we can keep that in the corner of our mind, we can always be successful with our trades..
yes thr will be odd loosers but eventually we will be winners on the whole...
  • #126
  • Feb 13, 2015 7:18am Feb 13, 2015 7:18am
Quoting attilafx
{quote} First of all I'd like to thank you for the excel file!! Now, when I run it, it starts good but then I receive the following error. {image} Basicly saying that the file is unreachable. Any solution for this? Also the new MT4 has different structure with the buildup from folders. Let me know if there is more info needed to find a solution for this. Thanks for helping. Attila

Welcome to the group AttilaFx..
First of all thanks for taking time to install the excel work.. It's a really good work, dont worry abt the errors, it will work fine.. i wil help u solving it..


Try to do these steps & post ur chart, if u still have any issues dont worry i wil guide u...
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  • #127
  • Feb 14, 2015 2:43am Feb 14, 2015 2:43am
Quoting Dindulkar
Now to Conclude ur doubt thr r 2 ways of using Trendlines 1.45 Deg Trendline 2. Subjective Trendline 45 Deg TL will give u simple & straight forward reactions.. Subjective TL thr r times u can use it, in the AUDUSD pair before the fall, i used the subjective TL which was working fine.. So no wrong in using subjective TL's but always keep ur 45 TL in mind or draw it in ur sheet for reference..
Thank you for your advice. I see there are several subjective trend lines in the charts in the book as well.
  • #128
  • Feb 15, 2015 1:41am Feb 15, 2015 1:41am
It says in the book that it is advised to try different box sizes and look for a setup that provides the kind of information you are looking for. It is also recommended to use multiple charts with different setups for a better analysis/perspective.

After looking on several currency pairs with different setups I found this advice very helpful, especially as not the pair itself but the condition it is in at the moment can dictate which setup is best suited to extract the information you need.

From all the patterns presented I found the bullish/bearish reversed the most interesting and the 45 degrees trend line probably more relevant even though it is suggested to pay attention to the obvious subjective trend lines of a larger trend. It seems the catapult is essential to p&f trading regardless of the other patters you are looking for(unless it is a pole).

Overall I find the book and these types of charts great, as they eliminate "noise" or irrelevant movement (or non-movement). Thank you for a good thread dindulkar and also thanks to kinsale for the help.
  • #129
  • Feb 15, 2015 1:37pm Feb 15, 2015 1:37pm
Quoting redgreen
It says in the book that it is advised to try different box sizes and look for a setup that provides the kind of information you are looking for. It is also recommended to use multiple charts with different setups for a better analysis/perspective. After looking on several currency pairs with different setups I found this advice very helpful, especially as not the pair itself but the condition it is in at the moment can dictate which setup is best suited to extract the information you need. From all the patterns presented I found the bullish/bearish...
You're welcome!

As far as different set ups for different charts go. I quite like using the following for forex charts. Each to their own but I like these for ample opportunities.

240min/60min - 10x3
30min/15min - 5x2
3min - 1x3
  • #130
  • Feb 16, 2015 12:02am Feb 16, 2015 12:02am
Quoting redgreen
It says in the book that it is advised to try different box sizes and look for a setup that provides the kind of information you are looking for. It is also recommended to use multiple charts with different setups for a better analysis/perspective. After looking on several currency pairs with different setups I found this advice very helpful, especially as not the pair itself but the condition it is in at the moment can dictate which setup is best suited to extract the information you need. From all the patterns presented I found the bullish/bearish...
Thank You Redgreen,

yes u can try diff sorts of combinations but in the end how far u wanna fine tune ur signals..

I use

15 min TF with 10*3 & 10*1 & 5*3..

Only if dont get enough signals with 10*3 i move on to 5*3 but always keep an eye wats happening..
I use it to read the supply & demand levels, which is the basis of P&F..
10*1 i keep it to read the accumulation & distribution happening in those levels which we cannot see in 3 box reversals..
i love 45 deg TL since the name itself implies Trend, so it keeps me in check what trend am in..

I started this thread to share the beauty of P&F with everyone who is willing to learn..
I will be so glad that everyone can contribute to the thread..
Post ur charts with setups, so we can keep the thread flowing..
  • #131
  • Feb 17, 2015 5:24am Feb 17, 2015 5:24am
My plan is to find bullish/bearish patterns reversed, with clear higher lows or lower highs and wait for a change in that tendency. I like to use close data to filter out the noise and potential false signals. Unfortunately this means I can't use pending orders and unless I watch the market I can miss opportunities.

I made some screen shots and wanted to upload them but for some reason I receive "Error: Upload of file failed."
  • #132
  • Feb 17, 2015 5:48am Feb 17, 2015 5:48am
Here is the main idea of what kind of bullish/bearish reversed patterns I am looking for.

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The 1H chart just shows the bigger picture but the entry with bullish reversed with the data for 3 or 5 minutes seems better to me.

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  • #133
  • Feb 17, 2015 5:57pm Feb 17, 2015 5:57pm
Not all markets will behave so nice every day but when a pair is acting like this if you let the profits run they will cover the losses and leave you with a decent return on investment.

eurjpy 5x3 with high/low
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I guess the big challenge is to find the perfect market in the perfect time with the perfect setup. Some look good with the 1m data, others with the hourly data, some with close, others with high/low, some with 5 pips box, others with 10 or even 20 for a volatile pair on a higher time frame. As it was said in the book, one of the keys to success with p&f charts trading is to know when NOT to take the setups. I believe that identifying a pair's type of behavior for a certain day or week can be one key element. The signals are pretty basic, but to be profitable with them I guess you need to develop a good discretionary instinct or an approach with an algo or set of parameters that filter out markets in certain moments, or setups in certain moments that should be ignored.

Regarding calculating targets, I couldn't get to accept the concept, as these targets could vary depending on the time frame and setup used. Maybe I didn't understand the concept correctly but usually I prefer to try and stay in a position as long as possible, move the sl as the position evolves and wait for the sl to be hit or for a reverse signal to appear to close and enter in the opposite direction.

The early entries is also an interesting concept as well as they can be made with tighter stop losses and higher risk reward ratios, but as a rookie with p&f charts I feel more comfortable with the standard signals/patterns.
  • #134
  • Feb 18, 2015 12:09am Feb 18, 2015 12:09am
Quoting redgreen
Not all markets will behave so nice every day but when a pair is acting like this if you let the profits run they will cover the losses and leave you with a decent return on investment. eurjpy 5x3 with high/low {image} I guess the big challenge is to find the perfect market in the perfect time with the perfect setup. Some look good with the 1m data, others with the hourly data, some with close, others with high/low, some with 5 pips box, others with 10 or even 20 for a volatile pair on a higher time frame. As it was said in the book, one of the...

RedGreen grt to see u posting charts..

To start of go with basic signals along with overall trend.. Yes, u have to learn how not to take all the setups..
Iam stating this again, try to understand whr is the supply & demand levels..
Keep it simple thts the beauty of P&F, dont try to bring in algos & others into this which will surely complicate ur thinking..
I use all the charts with close data only..
Regarding TF its ur choice, i never go into 5 min but some still use it.. Mine is always 15 min TF...
With Calculating Targets, u will get used to it.. It was confusing in the start..
I always prefer to take positions with good Risk Reward, i trail my profits wen i see the levels have been reached..
  • #135
  • Feb 18, 2015 3:18am Feb 18, 2015 3:18am
Quoting Dindulkar
{quote} Keep it simple thts the beauty of P&F, dont try to bring in algos & others into this which will surely complicate ur thinking..
I was talking in general about algos. Personally I like to keep it simple and go back to the basics when I look at how the market moves: higher highs/higher lows or lower highs/lower lows and try to figure out when a wave ends if that pattern of higher lows or lower highs ends. That's what I love about p&f charts, they seem to be able to drastically cut out the noise and leave you with only the most relevant information. I know this is not the traditional way of trading with p&f charts, but what I am looking for is still part of the basic setups when it comes to bullish/bearish pattern reversed. The only difference is that I don't mind going against the trend, especially on more volatile pairs where you can see hundreds of pips against the general trend.
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  • #136
  • Feb 18, 2015 3:41am Feb 18, 2015 3:41am
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This is the same chart with the main waves. Analyzing the sequence of higher lows and lower highs can help identify when such a wave might end. This type of clear movements can't be found on all pairs at all time, this is something I am still looking at, trying to figure out if only some pairs act this way, or if it has to do with pending news, lack of news. I think it actually has to do with the setup and the data you are using. Some charts look more noisy but when I switch to hourly data with 20 pips boxes, it all makes sense and you can see the unbroken sequence of lower highs or higher lows.

When I look at nzdusd for example on the minute chart it has a lot of noise.

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Switch to 15m close data and I like what I see, it makes sense.

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  • #137
  • Feb 18, 2015 3:55am Feb 18, 2015 3:55am
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10x3 provides the big picture with the higher lows tendency

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the 5x3 provides an earlier entry at the continuation of the bullish tendency
  • #138
  • Feb 18, 2015 6:38am Feb 18, 2015 6:38am
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Easy to analyze the past. Harder to trade the present.
  • #139
  • Edited 10:08am Feb 18, 2015 9:38am | Edited 10:08am
Quoting redgreen
{quote} I was talking in general about algos. Personally I like to keep it simple and go back to the basics when I look at how the market moves: higher highs/higher lows or lower highs/lower lows and try to figure out when a wave ends if that pattern of higher lows or lower highs ends. That's what I love about p&f charts, they seem to be able to drastically cut out the noise and leave you with only the most relevant information. I know this is not the traditional way of trading with p&f charts, but what I am looking for is still part of the basic...
This is how i would have traded on this pair.. u see it as high's lows, i see it as supply & demand thats all...

Yes i do counter trend but that those setups will be of small lot size.. strict principles i follow, no matter how good the setup is. Money management is the most important than the method we use..

Sorry for so much stuffing into 1 image, i couldn get anythin better..
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  • #140
  • Edited 1:39pm Feb 23, 2015 5:42am | Edited 1:39pm
I haven't posted a chart in ages so thought i'd post a trade I took this morning.

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1. High volume 15min bar/zone from Friday.

Took the green circled sell as it broke the low of an earlier green zone (NFP) and then the low of the zone from Friday. Entry was below the MA and in a well established trend as can be seen on the Excel chart below.

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