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

To: Atin who wrote (24743)	2/29/2000 9:43:00 AM
From: Atin	Respond to of 34827

Turns out Tom Dorsey's book (which I use as a proxy for the Chartcraft method) does count vertical counts on the plus side the way I would like to count. So if the low is at 83, the next column of Xs has 13 columns, the calculation actually comes up with 144, because 13 * 3 = 39. 100 - 83 = 17. 39 - 17 = 22. There are 17 boxes before 83 gets to a 100, and another 22 boxes above that. 83 + (17 * 1.0) + (22 * 2.0)) = $144. So far so good. Then I noticed that he counts from the bottom of the Xs vs the bottom of the Os which was the low. I can do that . . . Then Tommy comes back with vertical counts on the downside where he says the reversals should only be counted as 2 instead of 3. So instead of multiplying the column size by 3 (for a 3 box reversal), you'd multiply by 2. Why? How the hell do I handle this in percent charts, varying reversal sizes etc? :-) -- I think I'm going to leave it as the reversal size for everything but the chartcraft style of charting. Or maybe I should do something similar, use 2/3 of the reversal size for the downside. -Atin

To: Atin who wrote (24743)	2/29/2000 9:43:00 AM
From: Ben Antanaitis	Read Replies (2) \| Respond to of 34827

Chartcraft/Cohen/Burke adjust for box values, so PO calculations need to sum the value of the pieces in each 'value zone'. Also note that the 'modern' Chartcraft/et al method uses a 3 box multiplier for up columns 'X's and a 2 box multiplier for down columns 'O's when calculating the VPO in a 3 box reversal chart. The original thought by 'the masters' was to use 3 boxes for both up and down, but then they found that the downside POs were overstated. This was due , IMO, to the fact that a 3 box down move represents a larger percent change in stock price than a 3 box up move. when used as a multiplier for POs this led to the 'overstatement' of the downside target. FYI- I use a constant 3 box multiplier for up and down when using 3 box reversal Log scale charts. Ben A. ez-pnf.com