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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Atin who wrote (24600)1/31/2000 8:26:00 AM
From: Ben Antanaitis  Read Replies (1) | Respond to of 34822
 
Atin,

To develop a log scale p&f chart, each box must be an identical 'fixed' percentage price change from the box above and below ie on a 1% log scaled chart (in p&f there really is no "X-Axis" dimension other than 'the next column', but I guess that is linear enough to call it a semi-log chart), the value of the box above a given box should be 1% greater than it's value and the value of the box below it should be 1% less than it's value. This relationship also must hold for every box in the column.

For example: the 1% values form a series (X-.01X), X , (X+.01X), ((X+.01X)+.01(X+.01X)), ...

FYI- this series does produce identical values going 'up' and coming 'down'.

That's the way my program works (not really, because I use a single formula to calculate the value for each box value, but the results are identical). Download a shareware copy of EZ-PnF and examine the charts produced with the log scale option.

Ben A.
ez-pnf.com



To: Atin who wrote (24600)1/31/2000 10:27:00 PM
From: Smooth Drive  Read Replies (1) | Respond to of 34822
 
Hello Atin,

"About the percentage based box sizes -- how does one actually construct this chart? I was working on it and realized I don't know how to do this.

For example, I have a stock at 100, and I am using a 2% box size. If we were in a column of Xs, does the chart add an X if the price goes to 102? What about on the way down, if we were in a column of Os, from 102, do I make an O when the price goes down to 99.96? This puts the two prices at different places. One would expect 102 and 100 to show on the way up and the way down."

You are correct. 2% up is not 2% down. If one wanted to be super strict in their log boxes, both up and down, they would need two columns -- one for X's and one for O's. But, that's probably not realistic.

For all my log box P&F handcharts, I simply started with .01 in the first column in an Excel spreadsheet, and created that particular column with increasing log boxes at a % of my liking. I did so for a number of percentages. Here's a bit of a 2.38%. (Now, just so you can see what the difference is if the reversal was to stay at 2.38%, I've put that column next to it. You can see it's not much.)

X COLUMN        O COLUMN

58.80053	58.76722
57.43361	57.40107
56.09846	56.06669
54.79436	54.76332
53.52057	53.49025
52.27639	52.24678
51.06113	51.03221
49.87413	49.84588
48.71472	48.68713
47.58226	47.55531
46.47613	46.44980
45.39571	45.37000
44.34041	44.31529
43.30964	43.28511
42.30283	42.27887
41.31943	41.29603
40.35889	40.33603
39.42068	39.39835
38.50427	38.48246
37.60918	37.58787

Thanks for posting the charts. For a comparison, here's a dash of AOL using EOD with fixed box.

95 X
94 X O
93 X O
92 X O X
91 X O X O
90 X O X O
89 X O X O
88 X O X O X
87 X O X O X O
86 X O X O X O
85 X O X O   O
84 X O X     O
83 X O X     O     X
82 X O       O     X O 
81 X         O     X O
80 X         O     X O X
79           O X   X O X O
78           O X O 1 O X O
77           O X O X O X O
76           O X O X O X O
75           O   O   O X O
74                   O X O               
73                   O X O
72                   O X O
71                   O X O
70                   O   O X
69                       O X O
68                       O X O
67                       O X O
66                       O X O X
65                       O X O X O
64                       O X O X O
63                       O X O X O
62                       O X O X O X
61                       O X O   O X O
60                       O X     O X O
59                       O       O   O
58                                   O
57                                   O
56                                   O
55

Now, let's take AOL from its peak, but use a 2.38% log box.

94.12039 X
91.93240 X O X
89.79527 X O X O
87.70782 X O X O
85.66890 X O X O
83.67738 X O   O
81.73216 X     O 1
79.83215 C     O X O X 
77.97631 X     O X O X O
76.16362 X     O   O X O
74.39307 X         O X O
72.66367           O X O
70.97448           O X O
69.32455           O X O
67.71298           O   O
66.13888               O X   X
64.60137               O X O X O
63.09960               O X O X O
61.63274               O X O   O
60.19998               O X     O
58.80053               O       O
57.43361                       O
56.09846                       O
54.79436
53.52057
52.27639

Looking at the three charts, and specifically from their top:

Your chart, using fixed boxes, and essentially tick driven, had 10 sell signals and 4 buy signals.

The EOD chart with fixed boxes had 5 sell signals and 1 buy signal.

The EOD log box had 4 sell signals and 0 buy signals.

As you know, there are multiple ways to trade using P&F charts. But, for the sake of simplicity, it's either pattern driven, simple signal driven or a combination of the two. And, ..... yes I'm beginning to bore me too. <g>

Take care,

Eric


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