Best Thread learning to read price action with p/f charts

[Dentalfloss]

test the dollar strength at that trendline cluster
1.0430 area
4 hour data

 

[Dentalfloss]

eurusd
daily
that downtrend is goin to get tested

 

[Dentalfloss]

aapl
2 hour data
$4 box siaze by 1 reversal
hilo plot was the best configuration..imho
so,at this point,the trend tset will be at $560..the break of the trendline
if price moves up,then so does the supp area
this looks to be an important trendline..imho

 

[Dentalfloss]

aapl..hourly data

supp is based on $600 res.if price moves up,so will supp area
so,$564-568 is a minor supp area.any weakness should start there

 

[Dentalfloss]

s&p 500 index
10 min data
showing the latest trend
trend supports are at 1400..1392 and 1384 areas
blue lines..45 degree trendlines

 

[Dentalfloss]

s&p 500
4 hour data
if there is a breakdown.the trend is supported at the trendline/45 degree
3.00 points by 2 reversal

 

[malaguti]

Dentist, how would you read a chart like this?
The most recent has a bullish support line, whereas a longer term bearish line seems to be the most prevalent. Do you wait for the last support line to be taken out or would you trade the forthcoming double bottom?

 

[Dentalfloss]

hi there malaguti
a good chart you posted
imho....
the chart look back period is too long.agree you should take note of potential res areas
look at the latest trend
chart enclosed

 

[Dentalfloss]

if you are going to trade ,you will need to be with 1 box reversals
i have put on the important trendlines..imho
this is the area where the trend slows down
the blue line is the intense trend.this will slow and get broken...loook at the black line.that needs to get broken before any short position can be thought of.supp/main looks to be in 230- area
this is where i think p/f has the advantage.you are defining trend per reversal as against constant change of price over time...trendlines on candle/bar charts
a big difference
this is where the difference lies...when i visit chat rooms....alll the talk is about levels and patterns
very rarely about trend...because trendlines on bar and candles are so subjective...that is where the advantage of p/f lies..imho
so..first port of call
put on trendlines 45 degree and subjective...then you have defined the trend on that chart
my advice..put them on yourself..u learn alot more

 

[malaguti]

Some great points, I doubt I would have found those in the Duplessis book, thanks for sharing...using a shorter look back period certainly helps perspective, and the 1 box to trade..I guess I can see why..all nuances of price are taken into consideration. I am looking at the medium term but great advice nonetheless. There is very little difference in the 1 and 2 box reversals, so that could be my compromise.
I notice your chart on the far right is missing some data (or bulls eye draws slightly different to Updata?) and when you mention drawing your own lines, you can clearly see the triangle formation, possibly having recently broken down.

Thank so much for the response, I'm new to P&F lets hope I can learn fast!

 

[Dentalfloss]

malaguti..thanks..it turned out i had not backfilled the data for barc.i export the data from quotetracker into bullseye
my chart now matches youre updata one
as you say there is very little difference between 1 and 2 box reversal,because the bit you are interested in..it is stuck in a range..best go to hourly data and look at that consolidation in 1 box reversal
going short...possibly a scalp or some bad news might take that 230 support area quickly..but at this point,you should have closed longs,once the trendline on that intense uptrend was taken out
imho

 

[Dentalfloss]

malaguti...i forgot to add the most important point
you did not break down the original chart into bullish and bearish sections using trendlines
no other charting method can do this in a reliable way
uptrend tests support when momentum dies down ie.price tests the trendline.this might coincide with prev s/r,a fib level,gann angle,a pivot,a gap,an ma etc etc...hence in chat rooms most people are calling out these levels
day trading..i am mostly looking at line charts..they plot the close only..much easier to see the trend...dont need all the baloney of higher lows and lower highs

 

[malaguti]

Thanks Dentist, I'll do the trendlines, but in honesty it was originally intended as an example of how to overcome the obvious conflicting bullish and beraish support. That you answered pretty convincingly with perspective. The last thing that requires more work from my side is choosing the box sizes and whether to go with a fixed point size or log scale which im sure comes with eyeballing.
I do notice you often print just the most recent price action and coincides with the answer again.
So you don't bother with high low methods then..i'll note that. And yes, there is no other way that you could draw a chart that so convincingly says up trend or down trend.. here's the S&P since the 80s... a long term view but amazing nonetheless

 

[isatrader]

Dentist, how would you read a chart like this?
The most recent has a bullish support line, whereas a longer term bearish line seems to be the most prevalent. Do you wait for the last support line to be taken out or would you trade the forthcoming double bottom?

Hi malaguti and dentist007, I've noticed with your charts that you are not using the variable price scales that used on sites such as Dorsey Wright and Stockcharts P&F charts. Is there a particular reason for this I wondered?

For example to explain what I mean see the attached Barclays chart from Dorsey's site. The scale for price action from 100-199 is 2 boxes, but 200 to 499 is 5 boxes, which gives a double bottom sell signal but within an uptrend. See attached chart.

 

[malaguti]

Well my last chart was 1.5%, so it does take into consideration relative price and you get exactly the same using a 0.5% on barclays btw, its just a question of what works for you
cant think why I'd want to be limited to two ranges and distorting the chart, why not just have an infinitessimal system, 1 for 1 to 100, 2 for 100 to 200 3 for 300 ad infinitum..makes no sense to me but its what floats your boat i guess

 

[Dentalfloss]

hi malaguti
just a note..imho
if you do not breakdown the chart into bullish and bearish sections using trendlines then you have lost the advantage of using p/f
trendlines need to be placed first
then you look at patterns and signals

 

[Dentalfloss]

isatrader
dorsey wright is a very good sight
barclays chart...the hilo plot is not good for this instrument.there is an intraday spike,which is eliminated on the close plot
so imho confuses the price action
dorsey wright...3 box reversal is too clumsy for short term trading imho

 

[Dentalfloss]

eurusd hourly data
looks bullsih

 

[malaguti]

Dentist, my interpretation of the bearish and bullish zones..
Since the triple top buy signal crossing the hideous green line, it has been bullish. The last red prior to this marks the end of any bearish zone, except of course the most recent price action, suggesting a double bottom sell, if it wasn't for quite a lot of internal support lines, all at the customary 45 angle. My hand drawn are all in black
It seems to me as though any attempt to short Barclays would come come against quite heavy support.
In summary therefore I possibly shouldnt even be thinking of trading this from the short side, and wait for another buying opportunity, and getting out of any longs especially with the forthcoming sell signal?
Do you think I've read this correctly?

And do you give tuition in P&F by any chance, possibly something we could work out no doubt

 

[Dentalfloss]

Hi malaguti
good stuff..the trendlines tell you the story
it is the placement of the trendlines that will make you decide whether to trade..then just look for the signal/pattern
you will need to see the reaction of barc in the 230 zone before looking at shorts.also there is a big supp zone at 215 area
as you say there is no real confirmation of break of trend.so no shorts uneless scalps imho
tuition in p/f....well.there is very little to learn.the main thing which you have got now is placement of trendlines and interpretation...but am happy to help
meet either a saturday or sunday/late afternoon in kingston upon thames.there is a pret a manger near marks and spencer.you can buy the coffee"s