Great tool for swing traders: Point and Figure

Discussion in 'Trading' started by WDGann, Sep 23, 2002.

  1. I see a lot Swing Traders and sites using Bar Charts as their example but I feel that Point and Figure Charts are more appropriate for it.

    This can also be said with tape readers using ToS.

    What do you all think?
  2. I think it's horrible for swing trading because point and figure doesn't incorporate volume which in the short run is critical to the price action.

    On a much longer time horizon I can see PoF charts being useful, but for swing trading.....naah I don't think I would like it. Volume is often the best lead indicator there is so why follow something that doesn't incorporate it.

    Why do you feel Point and Figure is more appropiate? Maybe I am missing something.
  3. I like P&F. First time looking at it, I though it was tic tac toe, and it took me a while to get rid of the time notion when looking at charts.
    I use P&F for the Dow stocks, not Nasd. It gives me a 'clearer' support and resistance, and an approximate target.

    Cheers!!! :cool:
  4. ... no, you're not missing anything :)

    Each chart has its own strenght and weakness. That's why one should not rely on only one signal.

    Cheers !!! :p
  5. Personally, I found Bar Charts to be harder to see the resistance levels, comparatively. It's easier to grasp consolidation and its lvls through P&F. Bar charts aren't so efficient when it comes to resistance lvls, still they're better to grasp the trend.
  6. True tape reading doesn't rely on charts

    bar, candlesticks, or

    Point N figure.

    Just the past trades and bid/ask are all needed.

  7. To think of it... true.

    Wasn't P&F created by tape readers back in the early 1900s to remind them of the levels the market was trading at.

    Still, it's not tape reading... it chart reading...
  8. Never used P&F charts, but I would think that removing the time element in swing trading would be a big mistake. If you bought a stock expecting a bounce at support, and it just trades sideways for a few periods right at that level, wouldn't you want to see that on the chart?

    I suppose if you traded with rigid gtc stops it wouldn't make a difference, but if you expect an oversold/support bounce and the thing just goes sideways, chances are if you're swing trading that you'd be better off just getting out before your stop is hit -- on a P&F chart you wouldn't get that opportunity.

  9. I think people trading with P&F usally buy if the price breaks resistance (or vice versa). I never use P&F to buy at support and hope for the bounce.
    Due to the lack of time, when a resistance is broken on P&F, the signal is quite 'strong', because it may be a resistance for the last...3 mths? 3 yrs? who knows ?
    However, IMHO, P&F works better on less volatile stocks, not the Nasd bunch.

    Cheers!! :p
  10. Yeah that would make more sense, I just assumed swing trading meant buying support and selling resistance.
    #10     Sep 24, 2002