Why Point and Figure Charting is Obsolete

Why P&F Charts are Obsolete by Jeff Bierman CMT -5-23-18

http://www.mediafire.com/?fwu9jt9wo1aif8w

Why P&F Charts are Obsolete by Jeff Bierman CMT -5-23-18

 

http://www.mediafire.com/?fwu9jt9wo1aif8w

Provocative title that is misleading because it depends how you like to look at data and how you want to judge overall moves. Sometimes P&F helps you discern waves of buying and selling much more easily than candlestick or bar charts. Anyway Renko, ZigZag or Weis waves provide the same feel of price "measurement" to P&F charts and filter out noise similarly.

"Sometimes P&F helps you discern waves of buying and selling much more easily than candlestick or bar charts."

But those price waves transpire over many months, how does that help someone who is a short or medium term trader? (rather than a long term buy and hold investor).

This is just one of the indicators that Jeff Bierman discussed in a series he's doing on "passe" technical indicators, so far he's covered P&F charting, Put/Call Ratio, Short Interest Ratio, and Consumer Sentiment Index.

"Sometimes P&F helps you discern waves of buying and selling much more easily than candlestick or bar charts."

 

But those price waves transpire over many months, how does that help someone who is a short or medium term trader? (rather than a long term buy and hold investor).

 

This is just one of the indicators that Jeff Bierman discussed in a series he's doing on "passe" technical indicators, so far he's covered P&F charting, Put/Call Ratio, Short Interest Ratio, and Consumer Sentiment Index.

lol I got a bite. Actually p&f works well on smaller time frames too. He mentioned Renko bars which does the same thing of updating price changes without the time variable.

If you look at a tick chart, the horizontal axis is "activity" rather than time.

There are advantages to this setup over a "normal" price-time setup.

Mainly in the evaluation of trends and pullbacks vs directional moves.

A P&F chart does the same without requiring the tick data source.

There are ways to replicate this effect without either fine detail data source or use of P&F, but the P&F is available at incredibly low cost.

That's its value, provided the advantages of P&F are used by the chartist.

in my opinion ....

"A P&F chart does the same without requiring the tick data source."

Are you saying you can construct an accurate intraday P&F chart? Because unlike Tick charts, which are in minutes, classical P&F charts are daily/weekly, so utterly useless for intraday and short swing traders.

"A P&F chart does the same without requiring the tick data source."

 

Are you saying you can construct an accurate intraday P&F chart? Because unlike Tick charts, which are in minutes, classical P&F charts are daily/weekly, so utterly useless for intraday and short swing traders.

Hi GF

There's a thread on forexfactory on intraday p&f charts. https://www.forexfactory.com/showthread.php?t=19253

With enough liquidity or ticks intraday like in those currency pairs, p&f charting can be handy. Personally I only use it on the longer time frames but then I only peek at shorter time frames.

"A P&F chart does the same without requiring the tick data source."

 

Are you saying you can construct an accurate intraday P&F chart? Because unlike Tick charts, which are in minutes, classical P&F charts are daily/weekly, so utterly useless for intraday and short swing traders.

The answer to your question lies in the subtle difference between eg a x00 tick chart and eg a y minute chart which superficially look similar, but are not when getting down to the actual trading.

I recommend trying this out over a period of time and seeing what happens, if anything to your personal results.

But for longer time frames, the activity vs time issue is covered in Richard Arms's book about volume adjusted width price bars, whereby eg a high volume bar widens into a box, that is, it has more x axis allocated to that bar.

Volume = activity = momentum = open interest change=breadth, broadly speaking, but each has it's nuance and specialist inherent advantage. P&F is the activity variant.

I hope this helps clarify.

PnF are excellent, you can adjust it to any timeframe, just need to change the box size and reversal... A 1 tic or 1 point box size and 1 reversal is gonna be very fast...

You should read both books by Jeremy Du Plessis on point and figure, you gonna understand it's power and how it can be used intraday.