Learning to read Price Action with P&F Charting

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

  1. weeed7

    weeed7

    Apparently i can only upload one image at a time, here is the othre one!
     
    • low.jpg
      File size:
      176.7 KB
      Views:
      100
    #881     May 27, 2008
  2. weeed7.
    there are differences in the method of presentation of the data in p/f terms.the calculation is from the preceeding box,not the close/hi or lo of the day.
    the high/low presentation.say the eurusd is in an uptrend it will only print the next box if the hi of the next period goes beyond the next box in price terms.if price reverses by an amount of 3 boxes calculated from the last box.ie the low.then it will print a reversal
    the close method calculates the next box from the close of the period in question and ignores the high and the low of the period in question
    so the high and low method keeps you in the trend and ignores noise
    that is why i think youre charts dont lookm the same
     
    #882     May 27, 2008
  3. weeed7.the boxes on vt navigator look to be plotted either from the high or the low.you choose which one.
    this is wrong.the plot should be calculated by youre software as i have said previuosly.the best method round this is to go down a timeframe and use close only data.ie the box is calculated from the close of the previous period.so a 15 min chart.close only data
     
    #883     May 27, 2008
  4. cable:gbpusd.here is a 1 box reversal hilo.box size is 50 pips
    you can see a long upward column and the start of a retrace.long column meaning the price was overstretched
     
    #884     May 27, 2008
  5. weeed7

    weeed7

    Thank you very much Dentist007.
    Let me make sure i understand what you are saying.
    If the price is in an up trend, meaning a column of Xs. then as long as the price is making new highs, the chart will keep printing new Xs! until a reversal of 3 boxes takes place, only then the chart will start a new column of 0s. And in this case, new lows will count, right? So, high price when in an up trend, and low price when in downtrend. am i getting this right or not?

    Because i don't think this is what my charts are doing, i think they are using only one price in all cases, meaning if i chose to use the high, then even when the pair is in a downtrend the chart will still count the highs only.
     
    #885     May 27, 2008
  6. HooLee

    HooLee

  7. weed7.
    yes you have it.that is why you have to look at hilo and close charts.both will give you different information.however the more information you have the better.that is why p/f can give you far more information about the price action than candles.
    hoolee.yes the dorsey wright is the chartcraft method of p/f charting.the hilo method.the close price is another method.both give you information on building a picture
     
    #887     May 27, 2008
  8. weeed 7.go down a timeframe and use the close.that is the better method
     
    #888     May 27, 2008
  9. weeed7

    weeed7

    Thank you Dentist007, and Hoolee,
    It's clear to me now how to build the chart. It's also clear that the people who built VT need to learn how to build it too:mad:
    I think i will try your way Dentist007 and let you know how it goes.

    Thanks again
     
    #889     May 27, 2008
  10. pnf.guy

    pnf.guy

    Weed, welcome aboard the thread. I have recently made a transition to forex my self. Honestly I love the difference. I use point and figure for tactical descions on a intra-day basis. Its amazing how well it works.

    I know exactly what you are talking about how different time frames will give different charts. A 1m can be different than a 2m,3m,5m,10m etc using the same box size and reversal amount.

    Its my opinion you can disregard what many books say that time has no effect its simply not true for intra day charting. Time does in fact have an important role.

    Your problem seems really simple you are not setting your charts up right. You must take the high-low range rather than just the high. If you can't figure it out just call your broker they should be able to help you
     
    #890     May 27, 2008