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Old Mar 22nd, 2008, 05:31 PM   #13
HolyGrail
 
 
Join Date: Jul 2006
Location: Houston, Texas
Posts: 2,803
Now let's say the price moves up to 1.25 without going to zero. Our chart will now look like the chart below

I labeled it as a double top buy signal. This is one of the patterns where the standard book on Pnf will tell you to buy. Do I buy. It depends. Right now the only information we have is the bulls(x's) are winning the supply/demand battle at the moment.


Jimmy I hope to change your mind about trading it in futures. My main problem is having a platform that gives reliable pnf information on a timely basis. You always have to stay ahead of the game, and know exactly at what price it will reverse at all times.
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Old Mar 22nd, 2008, 05:39 PM   #14
HolyGrail
 
 
Join Date: Jul 2006
Location: Houston, Texas
Posts: 2,803
Ok, before we go on, lets talk about trendlines. There is only one way to draw a trendline in pnf. There is no way you can get it wrong. All trendlines are 45 degree and in this case it would start at the bottom of the first x column and move up.
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Old Mar 22nd, 2008, 05:53 PM   #15
slacker
 
 
Join Date: Jan 2005
Posts: 664
Great thread!!!

Another great reference on P&F is
The Definitive Guide to Point and Figure by
Du Plessis

http://www.amazon.com/Definitive-Gui...6221320&sr=8-1

Expensive, but worth it. Full color and 'heavy' text book production quality not the usual trade-book stuff. Good user reviews on Amazon as well.

Some great P&F resources also at:

http://www.answers.com/topic/point-and-figure-chart

Looking forward to this thread!
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Old Mar 22nd, 2008, 05:59 PM   #16
HolyGrail
 
 
Join Date: Jul 2006
Location: Houston, Texas
Posts: 2,803
I also need to mention that when you daytrade you don't use the standard box sizes I mentioned earlier. We will get into that later, but those box sizes are for swing trading only. A daytrader has to be more nimble.

OK let's get some of the standard buy and sell signals out of the way.

The common patterns are called
Double top buy
double bottom sell


Triple top buy
Triple top sell



Traingle buy signals
Triangle sell signals

Bullish catapult
Bearish Catapult

Bullish Signal Reversed
Bearish Signal Reversed

Long Pole up
Long pole down

As Jimmy mentioned, I strongly suggest Point and Figure Charting by Thomas Dorsey. His latest book comes with a cd that is very helpful.
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Old Mar 22nd, 2008, 06:04 PM   #17
HolyGrail
 
 
Join Date: Jul 2006
Location: Houston, Texas
Posts: 2,803
Thank you all for contributing. There are many sites available on the internet that probably explain the basics better than I can. I hope to give you all something that will prevent you from making large errors in trading, and at the same time give you some things that are not in any book.

For review here is a double top buy and sell signal.
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Old Mar 22nd, 2008, 06:14 PM   #18
HolyGrail
 
 
Join Date: Jul 2006
Location: Houston, Texas
Posts: 2,803
OK, as a side note, I will now show how a Pnf'er would never be in bear stearns unless he was short. This chart had such a drop I cannot even get it all in one copy and paste.

On march 6, you have a double bottom sell signal at 74.00

Holy Grail RULE #1

NEVER EVER CONSIDER GOING LONG ON A STOCK(there is one exception) whose last X COLUMN HAS NOT EXCEEDED THE PREVIOUS X COLUMN.
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