TLC- I agree. I have studied everything from candlesticks, to Pnf, to "conventional" TA, and while PnF isn't perfect, I like it the best too. Like all the methods, it takes a while to learn the nuances, and what works for you. I do like to combine it with some of my "old style" TA as well though. In a way, I do think Piffing includes time, and it certainly includes overbought/oversold conditions. For example, when a stock makes a TT break for example, the "plan" used to be buy it right then. Over the years they found that giving it time, and waiting for a pullback, worked more consistently. That's because it takes a lot of effort to break out, and stocks are often overextended when they do. Stochastics, or their piffer cousins the bell curve, will show that.
I have also heard a lot of good things about DeMark and need to get his book. I liked Murphy's, and didn't find it overwhelming, but then again I'm a pretty technically oriented guy being a scientist.
I had gotten away from using RSI divergences as much as I used to, and your excellent post reminded me of their usefulness. My problem is trying to read to much into patterns, or trying to force the issue. For example, look at QQQ's chart. The divergence in March between higher price highs and lower RSI highs is classic, and I wish I had seen it earlier. Now go to a 30 min chart. Our current RSI values are lower than those on 4/4, yet the prices are higher. That divergence indicates lower prices to come. However, the price peaks on 4/3 are lower than those on 4/10, but the RSI was higher on 4/10. That's a positive diverence and indicates higher prices. This is where I get into trouble, trying to impose my will on the charts and finding a solution, when I probably out to call it a tie and let something else decide the outcome, like PnF, which says lower will win the battle.
I too have had arguements with people about Log vs Linear and personally I use them both. I prefer Log for larger price moves, or longer periods of time, but I've found that both seem to have validity. Could it be because more people are using TA, and some use Log, while others use Linear. Therefore they base THEIR buy/sell decisions on whatever method they are using, and it becomes a sort of self fullfilling prophesy.
Bollinger bands are interesting as well. I like to use them with PnF. When they are narrowing and indicating and indicating an explosive move one way or the other, it helps to set loose or tight stops, depending on my position. I also use them to confirm Pnf signals. ie- first high/low outside the band, but second one inside, etc. I also find that if the bands look like an Armadillo it is an great up pattern <vbg>. Actually, the girls method makes some sense. Any kind of TA is really all about patterns. If an Armadillo is what works for someone, then more power to them. Any kind of prediction of the future relies on patterns from the past. Weather forecasting is no different. We look at patterns, and try to interpolate into the future. Some of us do it better than others, some wish we could be as good at other forms of pattern recognition (stock charts), as we are at our own disciplines. <ggg> I look forward to talking to you more. Take care. Jeff |
