Welcome Backfill, P&F charting is basic supply vs demand and graphed that way. A great book is by Tom Dorsey and called "Point & Figure Charting" covering the basics to the advanced. Having looked at numerous other TA indicators, I find P&F to give the clearest signals for both buy and sell.
Readers digest version...short form...
X's represent demand and buying and only go UP
O's represent supply and selling and only go down
when in the column of X's you only look at the days high, the open and close have nothing to do with P&F. In order for a new X to be placed the stock must achieve a whole number.. exapmle say LU was at 84 1/8 and had a high for the day of 84 15/16 , that would not qualify for a new box at 85.. It would take a minimum of an 85 to move up that one box or X.
In order to change columns, from either X's or O's it takes a 3 box reversal. Thus if again LU was at 85, and the low for the day were 81 even, you would move from a column of X's to a column of 3 O's at 84,83,& 82.
At this point you really need to get the book and go back over the last few hundred post.
Regarding you question #1, Im not sure how your P&F chart is telling you that LU closed at 84.5 as P&F does not use closing prices.
What TA software are you using?
#2...your system default of (0.5 x 3) looks like your reversal is set at 3 boxes of 0.5 size. This may explain why you see an 84.5 on you P&F chart of July 2. this would not be the close but the high thus far without a reversal.
I would change you default to 1 x 3 in the range of $20 to $100 and then this will match whatt you will see here on the thread.
#3Green X's are demand buying and climbing, the red O's are supply selling and moving further down.
Are you using AIQ software per chance as these are the colors of it's X's and O's.
If you have more questions just jump in and ask. Once you get the book and read the first few chapters, it starts to make much more since.
Have a great 4th
Laater
Preston |
