Learning to read Price Action with P&F Charting

Discussion in 'Strategy Building' started by HolyGrail, Mar 22, 2008.

  1. pnf.guy

    pnf.guy

    Regarding ticker symbol AUTH. It looks like you have nice little stock here. Its more or less tracking the indexes but has a little more strength behind it in my opinion. Heres how I would of played it off the chart if you beleived it was a good fundamental story. Scale in 1: Long at 10.00 Scale in 2:at 11.30 Scale in 3: is coming soon on the most likely test of 12.00 My objective would be 15.70


    I hope your long at 10.00 or 11. 30 or better and nothing more than 12.00. This stock could easily come back to 11.00 or 10.00. I'm almost certain that its coming back to 12.00
     
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    #701     May 10, 2008
  2. I like your strategy. I am currently long just 100 shares at around current price, but sold a covered call with a strike price of $ 15/sh, which would be a decent profit if I get called away and reduces my cost of owning the stock.

    As noted, I do plan to average in more if we fall back to support. However, my current goal in say going long based on a P & F signal is to buy on the signal and not wait for a pullback that may never come.


     
    #702     May 10, 2008
  3. pnf.u got a really big shopping list.
    firstly,there will only be a few that have good signals.so let us know which ones you think have.then the real analysis can begin.
    it is more about the chart showing good signals which are tradeable.rather than having a list with vertical /horizontal counts,fibs etc.you might be waiting for some time for any action to begin
    so in order to make things easier:
    1.define youre time horizon.ie 5 boxes as target.or as holygrail put in 5 week max.this time horizon will then define what box size you should be looking at
    2.you can then see what signals look good to you
    3.post the chart.then we can all give some advice.there is enough knowledge on this thread to really give you a good opinion
    you actually learn the most from other people who examine youre set up and criticise it.dont be afraid.it is a great opportunity to learn
    thst ids why i posted gsk last week.not one of mine,but tipped by a guru
     
    #703     May 10, 2008
  4. here is a chart for oilb.the etf for brent oil.i dont have data for nymex future.as you can see from the chart there are no real tradeable signals.it is in an uptrend,but no signs of any pullback for entry.also no sign on this chart of any trend reversal.so no real signals as yet.that is what p/f is all about.supply and demand.price only,no time ,no volume
    it is about..are the longs winning against the shorts...no more
     
    #704     May 10, 2008
  5. forgot the chart
     
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    #705     May 10, 2008
  6. pnf.guy

    pnf.guy

    Hello dentist. Good to hear your comments. I always like to read what you post. I guess I should clarify my intentions. I track all those markets just for fun and personal satisfaction. I only trade two markets the ym or es which ever one offers the better opportunity. My style is position day trading. I'm looking to catch a nice trend or two during the day. My use for daily pnf is in the realm of position sizing. In bullish daily pnf mode. I want to have either a two times or three times larger position on my long positions compared to my bear positions, when the market is in daily bull mode. In a bear pnf daily mode I want my shorts to be two to three time larger than my longs in bear mode. In neautral mode each postion is sized equal. Basically what I'm asking you clever guys is if your bias on the daily mode is bullish, bearish, or neutral and why you came to that conclusion.
     
    #706     May 10, 2008
  7. confusion here.the daily?
    what box size.the daily hi/lo/close prices are coming into youre charting package.the charting package will want an input for box size.ie arithmetic or log.once you have entered box size it will ask for what size reversal.i 1,2 or 3.it will then display a chart.now some box sizes of the same instrument will show no tradeable signals.possibly others will.you will then define what chart /signals you want to take.also trend lines will alter according to box size and reversals
    so it is not like a candle stick,where you get signals from the daily/weekly or monthly
    incidentally,weekly hi/lo,close data should not be used on a p/f.just daily
    as you change the box size on the daily.this alters youre time horizon.the reversal size more to do with the trend
     
    #707     May 10, 2008
  8. going back to youre discussion.you will have a bias for each chart depending on the box size.all the data is daily in p/f.
    you can see with holygrail ...he is defining good tradeable signals on a specific box size that suits his time horizon
     
    #708     May 10, 2008
  9. pnf.guy

    pnf.guy

    Thanks for your comments. I'm well aware of the way a pnf chart is constructed not exactly using time as an input. I use the term daily more as an umbrella term to cover short term price action not long term. I like my pnf charts to be sensitive but not noisy. Here is good reference point for how I like my charts. For the DJIA a 25pt/3. For the S&P 500 2/3 and NDX 2/3
     
    #709     May 10, 2008
  10. fine
    a better way to look at the daily bias is
    hourly close.this will give you one data point per hour.it will then take out the noise of hi and lo points.you should quite easily get 3 months of data points into the charting package.this will then give you the fine tuning before the market opens.then use youre intraday routine
    intraday box size should be 10% of the daily box size.data could be hourly close.15 min close,1 min close etc etc.use hi lo data if needed.to get the full picture
     
    #710     May 10, 2008