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

To: Mr. BSL who wrote (2985)	5/12/1998 8:14:00 PM
From: Ben Antanaitis	Respond to of 34809

Duke, You have detected and pointed out a practical example of what I discuss in the following: When considering Logarithmic scaling... the following applies to both individual stocks and to RS charts. There has been some discussion of the advantage of logarithmic scaled charts over 'Chartcraft/Traditional/DWA' scaled charts. I have said that they are 'more responsive to price/direction change' without presenting a quantified proof of when and how. I was doodling with my spreadsheet program and I came up with a way to graphically present a case for using logarithmic scaled EZ-PnF charts. I have posted the following two graphs on my web site: pipeline.com and pipeline.com They are graphs of the actual percentage of price change required to have a Traditionally scaled p&f column change direction 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 also 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 both O->X and X->O would be identical. The posted graphs show that the amount a column'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. My conclusion 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.