9eb85c0b550e1877ce51e70db80f52ea--to-read-charts.jpg d0abd6ee-f31c-4e01-95dc-cd03de9f4eae.png b09223ca-7e94-42ac-b1e7-a769735a6b19.png Point-Figure-Chart-Explained.jpg Patterns of buy and sell signals At this point, we\u0027ll delve deeper into what the Point-and-Figure diagram might look like. In giving buy or sell signals which has a famous pattern Shown in all samples. The description will give only 2 examples. The first form is a buy signal on the breakout of a triple top and a sell signal on the downside breakout below a bullish support line are issued. Because if you understand the principles of buying or selling signals Any pattern formation is easy for traders to understand technical analysis. The buy signal following the 3rd peak breakout was actually a breakout of resistance. Which according to the principles mentioned in the subject of support and resistance breaking through resistance Refers to a buy signal. The next question is How do you know where is resistance? The answer is that the resistance is at the peak of the last 2 X signals. Because the X signal turns into an O signal, it means selling pressure is greater than buying pressure. So it\u0027s a resistance line. The X signal crosses above, indicating that demand outstrips supply. It will inevitably result in the price rising. Therefore, a buy signal occurred. The sell signal section When the price breaks the support line up and down, it means that the selling pressure is greater than the support along the trend line or that there is an oversupply. Inevitably results in the price dropping Because traders who want to buy who used to buy along the trend line are now unable to know technical analysis and accept it, which may be due to the fact that traders who want to sell have higher power, so whoever escapes first You don\u0027t have to face the stock condition, which makes it even more a trigger of selling pressure. So a sell signal was born. However, it should also be noted in the figure that the breakout point may not yet give a buy signal. Or sell signal come immediately In addition, it is said that the ascending triple top gives the most reliable buy signal, while the breakout of the triple bottom gives the most reliable sell signal. But to trust How much you get, let\u0027s see for yourself!
PointAndFigure.png Diagramming Point-and-Figure, At this point, we must have started to learn how to create a point and figure diagram on chart. The equipment needed to create a diagram is a graph book (Which has a square grid used in childhood when the teacher asks you to graph it.) But some people might say that nowadays there are computers. As well as a program to manage diagramming, Points and Figures, why do I still need it? (Is it obsolete? ) But in our opinion, Understanding the basic principles would not cause any damage. To have understanding and expertise first, then use a computer to help create a diagram later. It should be added to the user. More proficient and believes that the computer-generated diagram sometimes difficult to consider Because the image is too small for those who have used graph books to create diagrams. There might be some way to solve this problem. The first step in creating a diagram It\u0027s about setting the size of the box (box size) that each box is equal to how much. The easiest way is to set a box size equal to the price change or spread in stock trading. For example, if the stock price is between 5 euros and 80 euros , the box size will be 5 euros , which is equal to the change of price when trading stocks, etc. However, in practice, the box size is set at the trader\u0027s discretion. To be able to lead can be used for analysis effectively But there is a little reminder that the size of the box size will affect the sensitivity in change in price direction If the value is less The change in direction will be faster. Therefore, choosing the size of the box size should be related to the range used in the study on chart for trading. For example, if wanting to study price movements in the long term, choosing the size of the box size is should be larger than usual, etc. The second step should be to understand how to enter prices into the table. As well as the rules that need to be known to create a diagram in order to understand the rules. Including the rules along the way Take a look at the following example. Suppose that the stock price is now 15 euros, we record the value of 15 euros, but not as a numerical value, but instead using the X or O symbols. After the price of 15 euros, the stock price moves in which direction because the symbols X and O have different meanings, that is, if the price moves up, then the symbol X is assumed. That the price moved up to the highest price level of 40 euros and closed at this price level as well Will we really get 6 more X symbols? (Example picture) Because each box used to record the X value has a box size of 5 euros, so when the maximum price changes to 30 euros, the amount of X that has been added. So there are 6 of them. On the other hand, if the stock price falls from the price level of 35 euros to the lowest price of 10 euros and closes at this price level, the symbol O will be used to record the value. (sample image) Arrived at this point lets us know that Which symbols are used in which cases? And for ease of explanation, I would like to explain in case the stock starts with row X first, assuming that the next day the price is still rising. With a maximum price of 65 euros, we don\u0027t have to do much. In addition to further record prices up to the price level of 65 euros. But if the highest price on the 3rd day does not exceed the highest price (65), for example, at 65 euros, we must turn to consider that. Is the Day 3 Low below the High (65) for at least three price movements? In this case, assuming a minimum price of 55 euros is not less than three periods of price change. Which is worth 10 euros here, just sit there without recording anything. On the other hand, if the lowest price on the 3rd day is at 15 euros, which is below 65 euros, down more than 15 euros, in this case, start recording the O symbol in the column to the right of the X column starting. Record in the box that is one box below the highest price box X, as in the example of chart image above. You are probably wondering what 15 euros used as a criterion. Where did the change of the X symbol to O come from? Indeed, it is a popular rule. This rule is called Three-box reversal, derived from the value of three times the box size, which from the above set the box size equal to 5 euros, so Three-box reversal is equal to 15 euros, but if anyone wants to change the rule This reversal can be any value other than 3 times the box size, but it should be looked at. Once changed, does the diagram that emerges have any significance in considering price movements? Or provide a price pattern that produces a buy or sell signal at Is it reliable or not? If it works better No one would forbid it! In addition, another thing you can notice is In low and figure recording, there is nothing to do with the closing price, it follows the point and figure principle on chart in which only the highest price is taken into account. Only with the lowest price. But if on day 1 we are now in column with O instead of column X as above, this is due to the drop from 60 euros down to 45 euros and if the lowest price on that day 2 is 15 euros, we continue to record the symbol O down to 15 euros. However, if the lowest price on day 3 is 15 euros, which is not lower than the lowest price (15), it must be considered that Is the highest price a Three-box reversal? If the highest price on the 3rd day is 20 (still less than 15 euros), nothing to do, but if the highest price on the 3rd day is 70 euros, then the reversal begins. In recording, it changes the symbol from O to X, which starts recording in the column immediately to the right of column O and begins in the address field. Higher than that of the symbol O record up one channel (As shown in the example picture) However, sometimes the price dynamics are quite wide, for example, the high on the 10th day is higher than the high. Something currently recording on day 9, but looking at the lowest price on day 10, it\u0027s worth more than three-box reversal if the rules are followed. Would continue to record the number X until the maximum achieved on the 10th day, regardless of the resulting minimum, but if it did so It may seem to ignore what might turn out to be a significant reversal signal. And then move the column to the right To save the symbol O or perhaps use the method to save X until the highest price. And move the column to the right and save as a symbol, use fish to go down Instead of using the O signal as a warning that Significant reversal occurred. Appeared during the day. point-and-figure-4.jpg
1*03ly9-LoF1WLHXsxPcVEPQ.png Point-and-Figure diagram It is another method of technical analysis which has been popular for a long time. The format of the diagram for the analysis This point-and-figure is quite different from the diagrams used in most technical analysis of bar charts because in bar charts, the horizontal axis shows the time. Which when we look at the picture, we will immediately know that on some day in the past This is the highest and lowest opening and closing price of that day, and one bar chart represents trading for 1 day (in the case of a daily chart) or maybe 1 week (in the case of a weekly chart), which is of course fixed. But in the diagram The point-and-figure price action is represented by the letters O and X as shown in the example figure. Although the graphs that are seen look like bars as well. But we can\u0027t say that. Discard that bar how long does it last Because as long as there is no change or reverse direction price action is still displayed in the same bar (O or X), so one bar May display data for several days. This is like a compression mechanism. (compression) to see the price trend in another form. An important by-product is This compression mechanism It filters out price movements that are random (noise) and not related to the trend. It gives us a clearer picture. point-and-figure-chart.jpg