Learning to read Price Action with P&F Charting

Trendlines in PNF have to have 45 degree slope for this reason. Each column is made up of perfect squares. Each new column begins 1 square up or down from the previous column. Squares are equal in heighth and width. The only proper way to draw a perfect sloping line through a square is at a 45 degree angle.

edit: Hell now that I am looking at it, you cannot get a proper trendline no matter what you do unless you have a program that will draw the boxes correctly. I will give an example shortly.

 

Here is what a trend line looks in metastock.

 

Now here is the same chart with a proper trend line. Quite a difference.

 

I don't know what is wrong, but one chart goes up to 47 dollars in price and the other does not.

Let me find another example.

 

Ok, now we have it in the proper prospective with both charts being equal. Here are potential trendlines in metastock.

 

Now here is the proper trendline.

 

OK to sum up. If your software can make proportionate boxes then a 45 degree angle will work. If not, all of your trendlines are crap in pnf.

 

Will you please tell me the software you use?

Thanks!

 

For real time day trading Investor RT(monthly charge)
For swing trading Bulls Eye Broker. (one time charge of 150.00

 

Thanks very much HG for all the time you have taken to explin the trend lines in pnf.

I use QT with data from IB and as you have mentioned QT does draw proper trend lines. I donot know why they donot fix the problem. I will send them an e mail as well.

Is there another software which will pick up prices from IB and draw correct trend lines?

Thanks again .