I thinks its a good idea Arvind... we can start using this thread to post PnF charts with Target & SL as you see them....
here is NIFTY chart for past 3.5 months.
TARGET/Resistance = 5230
SL/Support = 5125
Vikas, have u read somewhere this method of drawing trendling and projecting targets on P&F chart ?
As far as I know,
1) TLines on P&F chart are not draw in the way we do it on bar or candle charts. P&F TL are
- always at the 45degree angle.
- Upsloping line is drawn from the lowest box of column of "O".
- Downslope line is drawn from the topmost box of column oc "X".
- as long as following X / O are above, below these lines, trend is in place.
- You don't need two points to draw a TL on P&F chart.. in that way, it beats the TL of regular chart where u have to wait for next PH/PL.
- Once price crosses the TL, generally TL is terminated there i.e. it is not extended further on the chart.
Beauty of P&F chart is that it makes trend identification pretty easy and unambiguous.
2) Buy/sell signal..
- extreme point of column of O or X tells us the level from which price turned the direction. This is very similar to the concept of Pivot high /low that price action trader use actively.
- When current column of X crosses the high of prev X column, we get buy signal.
- When current column of O drops below the low of prev O column, we get Sell signal.
- We are always in buy or in sell mode depending on the value of last column, we will hold the position or exit the position and wait for next trigger.
e.g.- if last column is of X and it has given buy signal (crossed above prev X column high), then we are long on the market. (this is no different then going long on the break of pivot high. Because next X is drawn only when price moves by a box size, this works as automatic entry filter here).
As soon as we can draw a column of O..i.e. price has fallen by 3 box size, then we exit long position. We don't go short cause sell signal will be triggered only when price falls below the low of prev column of O.
P&F trading is most simplified version of price action trading. And these chart don't follow indicators of technical analysis.. so don't try to mix them.
Target projection is different chapter altogather. It uses the width of consolidation (horizontal counting) and depth of lowest point of cosolidation to breakout point (vertical counting) to project the targets.
Hope this helps to all P&F enthusiastics on this thread. Only suggestion is, plz spend time and read about it before jumping into Where to Buy/ Where to Sell question..
all the best. and happy P&F trading.
