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If we're talking about futures trading. I must disagree with SWP. The past 6
months have been very successful for me using P&F and should end up with
about a 30% return (60% annualized). The rules for trading futures with P&F
sre different from those for stocks.
swp wrote:
> I do not use p&f to trade, and I rarely use it in my analysis, but as a
> professional technical analyst I can give you some background on it.
>
> What p&f does very well is highlight price reversals and breakouts from
> congestion. There are patterns in p&f that are similar to bar charts and
> candles, but there are additional ones that are particular to these
> charts. Though I believe some people use them even with small box sizes
> and reversals, I have always felt that it works better for bigger
> picture type stuff, since it can in essence summarize a large amount of
> price movement in a small amount of space.
>
> One of the problems with p&f is that it is price only. There is no time
> scale on the chart, so if a market range trades for a long time, you
> might not update the chart at all, but might be missing a large amount
> of congestion, which on a bar chart, or cumulative market profile chart,
> would show up as a very important level, but would not mean too much on
> the p&f.
>
> THE SINGLE BIGGEST PROBLEM WITH P&F IS THAT NONE OF THE COMPUTER
> PROGRAMS (that I know of) BUILD THE CHARTS PROPERLY. You can only build
> a p&f chart with tick data. Daily O/H/L/C will not work since the order
> that the prices occurred is important. So, that means you need to build
> them yourselves and have access to the full tick info or time and sales
> data.
>
> If you have more questions, please feel free to contact me.
>
> Steve Poser
> --
> Steven W. Poser, President
> Poser Global Market Strategies Inc.
> http://www.poserglobal.com
> Email: swp@xxxxxxxxxxxxxxx
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