File Name: devilliers taylor on point and figure charting .zip
This classic paper-pencil based method was largely put aside as technology made other charting methods easier. It can also be used along with other methods for combination or confirmation.
Point and figure charting does not plot price against time as time-based charts do. Instead it plots price against changes in direction by plotting a column of Xs as the price rises and a column of Os as the price falls. The technique is over years old. Chartcraft Inc, in the USA, popularized the system in the s. Cohen founded Chartcraft and wrote on point and figure charting in Chartcraft Inc is still running today, providing daily point and figure services for the US market under the name of Investors Intelligence.
Veteran Mike Burke still works for Chartcraft, having started back in under the guidance of Cohen. Burke went on to train other point and figure gurus, such as Thomas Dorsey who would go on to write authoritative texts on the subject. Du Plessis describes the historical development of these charts from a price recording system to a charting method. Traders kept track of prices by writing them down in columns.
Traders used both point charts and figure charts together and referred to them as their point and figure charts, which is where Du Plessis suggests the name point and figure came from. Modern point and figure charts are drawn with Xs and Os where columns of Xs are rising prices and columns of Os are falling prices, although many traditionalists such as David Fuller and Louise Yamada still use the Xs only point method of plotting. Point and Figure charts are based primarily on price action, not time.
The correct way to draw a point and figure chart is to plot every price change but practicality has rendered this difficult to do for a large quantity of stocks so many point and figure chartists use the summary prices at the end of each day. The charts are constructed by deciding on the value represented by each X and O. Any price change below this value is ignored so point and figure acts as a sieve to filter out the smaller price changes.
The charts change column when the price changes direction by the value of a certain number of Xs or Os.
Traditionally this was one and is called a 1 box reversal chart. More common is three, called a 3 box reversal chart. Because point and figure charts are plotted on squared paper, 45 degree lines may be used to define up trends and down trends from important highs and lows on the chart allowing objective analysis of trends.
Also in common usage are two methods of obtaining price targets from point and figure charts. The horizontal method measures the width of a congestion pattern and uses that to obtain a target.
This automation increased the popularity and usage of point and figure charts because hundreds of charts could be viewed and altered quickly and easily. At the same time a method of log scaling point and figure charts was devised, where the value of the Xs and Os was set to a percentage rather than a price. This allowed the sensitivity of Point and Figure charts to remain constant no matter what the price level.
Kaufman , in New Trading Systems and Methods , , documents research he and Kermit Zeig performed over many years computerizing point and figure charting. From Wikipedia, the free encyclopedia. This article needs additional citations for verification.
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Point and figure charting does not plot price against time as time-based charts do. Instead it plots price against changes in direction by plotting a column of Xs as the price rises and a column of Os as the price falls. The technique is over years old. Chartcraft Inc, in the USA, popularized the system in the s. Cohen founded Chartcraft and wrote on point and figure charting in
De Villiers and Taylor on Point and Figure Charting - Free ebook download as PDF File .pdf), Text File .txt) or read book online for free.
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This content was uploaded by our users and we assume good faith they have the permission to share this book. If you own the copyright to this book and it is wrongfully on our website, we offer a simple DMCA procedure to remove your content from our site. Start by pressing the button below! But how to put them to graph paper and how to read their meanings is what can separate the trading and investing boys from the trading and investing men.
From the quality and clearness of the writings in this and other of his works, it soon becomes apparent that Victor DeVilliers was not only very knowledgeable on the markets but he had the uncommon talent to put it into written words. Most market authors are generally better traders and investors than writers. On the other hand Owen Taylor was certainly extremely capable, being more the expert on the technical aspects of market analysis, something easily ascertainable from the Technical Analysis subjects that he presented in his own books and booklets. It is to the credit of both authors that they recognized just how valuable to investors and traders the Point and Figure method could be and that they saw fit to produce this fascinating work on a subject that in its essence is just putting small "Xs" on graph paper. But how to put them to graph paper and how to read their meanings is what can separate the trading and investing boys from the trading and investing men. Surveying all of the writings that have been published over the years, we find there have been and are a number of good, very good and excellent books on the Point and Figure methodology and its star attributes. However, every once in a while someone comes along and writes what is easily the seminal work, the finest on its particular subject.
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