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i am very interested in your p&f work...but i too missed your url...drh
-----Original Message-----
From: Mudit Wahal [mailto:mwahal@xxxxxxxxx]
Sent: Thursday, April 26, 2001 11:39 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: [RT] An Intro to P&F and some NDX100 charts
Hello Group,
I've been a silent lurker for sometime. I use P&F exclusively for trading
purposes,
from 1 min to yearly. I like P&F because of its simplicity. P&F charts
solely look
at the prices and the patterns stand out ! Also, the support and resistance
trendlines
are easy to plot, always at 45 deg angle :-) P&F formations sometime can
predict the
probable price point where a stock/index/future will move.
The signals from P&F charts are binary in nature. The stock is either
bullish (when it
gives its first double top confirm signal) and it remains bullish till it
gives its
first bearish signal (first double bottom confirm signal). And at all the
times, you
know at what price points new signals will be given. So, its easy to put
stop losses.
If you take an index and find out all the stocks with bullish signal and
divide them
by total stocks in the index, you get the Bullish Percentage. This BP
usually fluctuate
between 20 and 80. At 20, it means only 20% of the stocks are bullish, at
80, it means
80% stocks are bullish. Buying can take place when the BP goes below 30 and
comes back up.
At this point, since stocks have started coming up slowly, the risk is low.
At BP above 70,
almost every stock has been bought and the risk is very high and great
care must be taken. The BP is quite uncanny in predicting turning points.
P&F was used by Richard Wyckoff. BTW, Richard's "Studies in Tape Reading" is
a must read
book for any day trader. A. W. Cohen wrote a book under Chart Craft. Its the
best one.
Recently Tom Dorsey of http://www.dorseywright.com has written a book. His
website has
P&F university where one can learn more about P&F. (I'm in no way affliated
with Dorsey.)
I run various screens to calculate Bullish Percentages for various indices
and sectors.
Then filter the stocks which are bullish and have promising chart patterns.
I'm attaching few charts. The first one is NDX100 for last 20 days 1 min
period with boxsize
of 5. The second chart is for last 3 years, with a boxsize of 25. Third
chart is NDX100 since
July'99.
Yahoo has limitation of 3 files attachment. I'll send another two charts
showing
NDX100 since Jan 1, and the Bullish Percentage since Jan 1, in the next
email.
Thanks
Mudit
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