PnF Charts:
PnF charting is definitely a dying art, that's not to say the techniques aren't valid. However, when versed in deep Wyckoffian logic you'll begin to understand the Law of Cause and Effect in it's entirety, when this 'epiphany' occurs PnF becomes somewhat invalid.
The nature of the markets in its simplest form is too find either buyers or sellers, we literally (dependent on tmeframe) bounce between
support and resistance areas. By gauging the quality of selling or buying we can determine the strength to see whether a support or
resistance will either break or hold.
NOW, some support and resistance levels act as trading ranges and in its here we build cause; build energy for price to move either up or down. As one becomes proficient in their chart reading we can not only read the direction of the break, but also determine the effect, which of course is the
breakout and subsequent trend.
In a nutshell we can read the cause that is built and project price (the effect) it's a universal law not only applicable to trading, this may sound metaphysical or mystical (label it as you will) but believe me when I say (and I have done extensive studies) that The Law of Cause and Effect truly understood is a powerful tool and often misused, probably due to its simplicity and mis-interpretation. There are layers to cause such as reaccumulation etc that one must acknowledge to gain a true guesstimate (price projection)
As described above we use the Law of Cause and Effect to project price, it's as accurate as an PnF chart, if not more so, due to the varying count size which many PnF charting practioners often appear to do. Importantly we can determine the effect within 30 seconds or so, no need for such time consuming, antiquated PnF charts.
Using PnF charts for an intraday environment is time suicide, we have the adage of MULTIPLE TIME FRAMES, something the traders of the past who used PnF (pioneers) did not have; this is truly the modern traders greatest edge. Some would argue
order flow, again an old technique as traders used to watch the ticker
tape.....
For intraday trading, targets price should always be higher time frame structure, unless we come from a
trading range 'cause' where we can evaluate our 'effect' or one can read a supply/demand imbalance as it unfolds.
This is not an attack against PnF charting techniques, there are a few PnF grandmasters in the world, that solely trade from PnF and successfully, they do not use any other forms of chart (time based bar charts or otherwise) the simplicity of their trading is astounding, as they understand that PnF is its purest form is Cause and Effect.
From a personal standpoint I have abandoned the tool for reasons stated above, mainly due to time; inefficient in this day and age. The inclusion of multiple time frames (at the click of the mouse) has eradicated the need for PnF techniques.
All the best,
F
