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Strategies & Market Trends : Point and Figure Charting
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To: Mr. BSL who wrote (4675)7/12/1998 9:33:00 AM
From: Ben Antanaitis  Read Replies (1) of 34811
 
duke,

Bottom line - Until DWA and Chartcraft either shift to the S&P500 or come up with a different multiplier, We should probably ignore RS Buys and RS Sells and instead concentrate instead on whether or not the RS is in a column of X's or O's. The effect of the rising DJIA has, of course, also slowed down the response that shifts RS columns. A three box reversal at RS = 6.0 is a lot slower than a three box reversal when RS = 18.0.

This is what I was trying to warn Jan about in #reply-5156393

The chart scaling algorithm at low data values is going to kill the RS timing opportunities as the data points from the RS calculation are allowed to fall below the 20-30 range. So the savvy investor, the one who sometimes likes to look at and understand the theory behind what they are doing, may have to either simply multiply the resultant numbers by one more power of ten (ie move the decimal one more place to the right) or switch to a log scale where none of this 'fudging the numbers to avoid pitfalls of the method' needs to occur.

Preston, a suggestion, take a few of your examples and use the same RS data points you have been using but move the decimal one place to the right and see if you see any significant differences, esp in the timing when reversals and buy/sell signals occur.

Ben A.
ez-pnf.com
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