Point and Figure Tutorial Summary and Video
Posted on February 24, 2009 by Adam
The point and figure tutorial last night was a success. For those of you who were unable to make it, we covered the advantages of point and figure charts, how they are constructed, and ways they can be applied to your trading. Below is a recording of the presentation and a detailed summary of what we went over. Because of the success of our meeting, I will be holding more tutorials in the future. I’ll keep you posted on when those will be and what they will cover. Hope to see you there!
Summary:
We talked about what point and figure charts are, including how columns of X’s represent rising prices and columns of O’s represent falling prices. We talked about the advantages of PNF charts, which include precision, accuracy, and filtering out some of the noise of traditional charts. They also give some clear, objective signals that aren’t always available on traditional charts, such as buy and sell signals and automatic trendlines. I also mentioned that you can get PNF charts on stockcharts.com.
We then went into how to construct them. I talked about our two parameters, box size and reversal amount. We went through a hypothetical example of how to construct a chart, looking only at the highs and the lows for each day. We saw how the charts communicate support and resistance in both horizontal and trendline forms, and how those levels can be actionable in trading.
Finally, we looked at some real examples of how to apply PNF charts to trading. We looked at the S&P and how the PNF chart foretold the recent breakdown in prices with remarkable accuracy. We also saw how the PNF chart could add more clarity to our analysis of the FXY. On the candlestick chart, we saw a bearish setup, but on the PNF chart, we were approaching support. We used the conflict as justification to pass on the trade. I also explained how PNF charts can be used to game low risk high probability entry points that will save you money in your trading.
Happy Trading!
Adam
Be on the lookout for an extended pullback.
Comments (4)
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February 25th, 2009 at 3:36 pm
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