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Strategies & Market Trends : EZ-PnF, a P&F Charting Program -- Ignore unavailable to you. Want to Upgrade?

To: David N. Jones who wrote (36)	4/15/1998 9:24:00 AM
From: Ben Antanaitis	Read Replies (2) \| Respond to of 178

Eric, David, and all you other lurkers, OK, that's a good idea, I'll do it. But (here it comes), I may not be able do it, to the depth required to share the process and thoughts properly, this week. My wife and I are preparing for her parents annual 10 day visit, which begins this weekend. Today, for example, is my day to get a machine and shampoo all the wall to wall carpeting in the house. And there are many more 'honey-do' jobs on this week's list. I don't know about you guys (and gals) but when your significant other is about to entertain her/his parents... well, you get the picture :-o But.. speaking of pictures... and Logarithmic scaling... There has been some discussion of the advantage of logarithmic scaled charts over 'Chartcraft/Traditional/DWA' scaled charts. DWA dismisses them outright as not making much difference. I have said that they are 'more responsive to price/direction change' without presenting a quantified proof. Well, perhaps in a precognition of this upcoming discussion series, I was doodling with my spreadsheet program last night and I came up with a way to graphically present a case for using logarithmic scaled EZ-PnF charts. Or, conversely, perhaps it is a reason not to use 'Chartcraft/Traditional/DWA' scaling for stocks with prices in certain price ranges. I am posting the following two graphs on my web site: pipeline.com and pipeline.com They are graphs of the percentage of price change required to have a p&f direction change vs the current stock price over the range of $2 -> $200. I do not show the values below $2 because with a Traditional box size of $.25, a 3 box reversal requires outrageous % price changes to reverse a column. And it blows up the graph range. I did not post charts for log scaling, because they would be just horizontal lines at 3 x % box value selected eg a straight, unbroken line at 6% for a 2% box value 3 box reversal. The graphs for O->X and X->O would be identical. The posted graphs show the amount a stock's price has to change, expressed as a percentage of current price, before a 'Chartcraft/Traditional/DWA' scaled p&f chart indicates a column direction change is not only vastly different depending on the current price, it is also different depending on whether the stock is currently in an up ('X') or a down ('O') column. The unposted graphs of Log scaling, would show that the price change percentage would be a constant, unchanging % of 3 X the box value specified by the user. The conclusion that is immediately obvious is that an EZ-PnF log scaled chart can respond faster to column direction changes, enabling investors and traders to capture extra percentage points, and time, in their trading decisions. Ben A.