peterjerome

here's something i use from Jeremy's 'Definite Guide'. PnF can be used effectively for medium AND short term trading. (assumes reader is already familiar with PnF charts) Example: chart is daily 1x1 (h/l) for COST. (note:reversal AND box size are both 1) shows Reward / Risk analysis. Red TLs show bullish and bearish support. entry occurs 01/31/12 when price moves above Bullish Support TL note: you could also use more conservative entry and wait for PnF pattern 'catapult'. Target Price = 93 entry = 82 stop exit = 80 (price drops below TL AND PnF pattern is Fulcrum Reversal.) note you could reduce risk even further with exit at TL break (81). Risk = 2 (entry - exit) 82-80 = 2 Reward = 11 (Target - Entry) 93-82 = 11 R/R = 5.5 note you could reduce risk even further with exit at TL break(81). R/R of 11..you only have to be right 2 out of 11 entries to be profitable. good trading, peter

josh, i can explain what i do...i'm not interested in convincing anyone of my being right. i use 10min bars to enter and exit. nothing complicated. when i am looking to exit i'll wait until bar close...often times price is already below my exit, but recovers on close keeping me in a trade that turns profitable. i gotta believe if i'm waiting on bar close, there may be significant number of traders doing the same thing, no? peter

zupcon, no edge...like a coin flip...50/50? need high win-probability, greater than 3-1... good reward / risk analysis solves that issue... PnF charts are excellent for R/R analysis... i guess i agree with you zupcon....(well said) however...i'll still look for those little 'nuances' that give me a leg up. peter.

barostni, tell a little about how you use PnF. how do you use PnF in your daily routine? e.g. searching for breakout candidates, determine supply/demand, market direction.(bullish or bearish trends. do you use the bullish percent PnF charts (free) on stockcharts.com to determine sector rotation? peter.

agree sneo. Jeremy takes supply/demand to the next level. he is a pioneer in use of moving averages & bollinger bands on PnF charts,,,a 'must have' for the serious PnF trader. peter.

Here's EFS code for PnF charts that will locate the 'Catapult' ,a high probability pattern. also calculates target price. see attached chart for example of pattern. read dorseys' book, mentioned earlier, for info on many patterns. peter /*Pedro's PnF catapult pattern. triple top break followed by double top break*/ function preMain() { setStudyTitle("Catapult"); setPriceStudy(true); } var iCntr = 0; var vText = "Catapult = $"; var vSound = "bullet"; var vTarget = 0; var nState = null; function main() { nState = getBarState(); if(nState == BARSTATE_NEWBAR) { iCntr += 1; // Catapult Pattern if(close() > open() && high() > high(-1) && high(-2) >= high(-4) && high(-4) == high(-6)) { vTarget = (high(-2) - low(-2)+1) *3 + low(-2); drawTextRelative(0, high() +1, vText + vTarget, Color.white, Color.black, Text.BOTTOM | Text.RIGHT, "Consolas", 12,"Catapult"+iCntr); drawLineRelative(0, low() -1, -0, high()+1, PS_SOLID, 4, Color.black, "Catapult"+iCntr); //if(iCntr <= 10) Alert.playSound(vSound); Alert.playSound(vSound); iCntr += 1; } } }

All serious traders...consider adding Mr. Dorsey's book to your collection. "Point & Figure Charting- the Essential Application for Forecasting and Tracking Market Prices". it's all about Supply & Demand...this book will never leave your desktop. peter.

Tams, I've posted 80 times, mainly on PnF...surprised you haven't come across any of those in your search. try advanced search for user = "peterjerome". you may find something interesting. I use a simple 2 step (not necessarily easy) methodology. 1- PnF chart combined with EFS programming used to identify 'breakout' candidates. (I am NOT a programmer but cut & paste what I need). 2- Standard chart used for entry & exit using Interactive Data(eSignal) for many years. very reliable data. Not interested in changing platforms. 40+ charts too many for me. I use 2 charts for setup, entry / exit. I understand the benefit of a trading partner, i.e. (1 + 1 = 3), however I gave up searching for the holy grail (too much M. P. ) many years back and began using PnF plus Standard bar charts to successfully make my living. I'll follow your posts. good luck, Peter.

DoD, IS is calculated by dividing the close by S&P500. an increasing IS indicates some factor outside of market influence..e.g. company internals, industry, above avg buying... if you understand easy code...this should help. good trading, Peter. var aFPArray = new Array(); function preMain() { setPriceStudy(true); setStudyTitle("R.S. vs S&P 500"); setCursorLabelName("SPX"); setDefaultBarFgColor(Color.black); aFPArray[0] = new FunctionParameter( "Divisor", FunctionParameter.NUMBER); with( aFPArray[0] ) { setLowerLimit( 100 ); setUpperLimit( 2000 ); setDefault( 1000 ); } } function main(Divisor) { if (Divisor == null) Divisor = 1000; var vClose = getValue("Close", 0, 1); var vSPX = getValue("Close", 0, 1, "$SPX"); if(vSPX > 0) { return (vClose / vSPX * Divisor); } else { return; } }

Divergence is a powerful strategy when used in correct context. I've used divergence successfully for years to exit position trades. I prefer 'intrinsic' strength (IS) over 'relative' strength. stock could move up strongly showing relative strength and still have no intrinsic strength. i.e. market could be sole source of this 'relative' strength. Intrinsic Strength is EFS file comparing price to S&P 500. when IS trends up, stock shows internal strength coming from factors outside of market influence. this is a key nuance. reference attached chart: initially look for IS to make lower high( LH). when this occurs, look for momentum (CCI) to make lower high while price makes higher high.(basic divergence). NOTE: it's important that momentum come from above overbought level. (+200) locate point where momentum makes lowest low (LL) between momentum highs. this LL should be below +100 level. when momentum drops below this LL point, exit is warranted. usually occurs when momentum drops below the zero line (ZL), identified with RED dot. Interestingly, HACO (Heikin-Ashi Candlestick Oscillator) signals exit on same day. HACO is the green / yellow overlay on price. for info on HACO, click here. Heikin-Ashi Candlestick Oscillator | ThinkScripter good trading, Peter.

question on stock in uptrend: 11/29/11 buy "M" @ 43.38 11/20/11 sell "M" @ 46.10 as long as stock trends up is there a loss here? peter

Enigmatics, i'm a position trader (intermediate term swing). i stay in primary trend as long as it's favorable. i look for divergence between momentum and price. divergence is easy to spot when you look at chart 'history'. the past is not helpful in trading. it's a bit more challenging looking at the hard right edge. here are two charts: the first chart shows actual divergence as it occured july. momentum indicator is CCI. it's important for momentum to come from overbought (above +200 for CCI). black trendlines shows divergence between price and CCI. the key point is the low between the momentum peaks. this is the trigger point. when momentum again peaks and then drops below this trigger, exit is suggested. this methodology gets me out when the current trend is ending. nuances: CCI above +200 is colored red. blue arrowhead shows a potential top. red dot shows actual exit. black dot shows red candle closing below the 50 vwma. the second chart shows this same scenario wnen view from the hard right edge. i built all nuances into the chart. they give me an excellent heads up on what will soon be history and thus become useless for trading. good trading to you, peter.

Cruiser, here is what turned my trading around years ago...it came from a very experienced and successful trader. he said "if you are not making money in the market, you are doing something wrong. figure out what it is you are doing wrong and STOP doing it". sometimes the simple answer contains the key...Occam's Razor good luck, peter.

WOW...answers all over the place. how about a measurement focusing on income generation strong enough to support a full and active lifestyle year over year and shows net worth "up & to the right"? peter.

Mr. M, have you evaluated this method? Larry Williams' Ultimate Oscillator'. see here on stockcharts' chartschool: Ultimate Oscillator - ChartSchool - StockCharts.com

eSignal update...eSig user for 14 yrs. eSig's data feed has excellent reliability... one of the most reliable available. cost averages < $100 mo. the cost is a business expense. question: if the trading profits cannot cover the cost of the platform, would switching to a cheaper platform solve the problem? peter.

Agree...a simple strategy based on trendline breaks can reliably identify both entry & exit opportunities. i prefer using TLBs on indicators vs. price. daily chart for HAL shows TLB exit 07/27/11. (vertical blue line). .confirmation next day

sdoma, after my initial breakeven stop, i will sell 1/3 of my position at 30%, another 1/3 at 50% and the final 1/3 i let run. i will sell this final 1/3 when the profits run up and pull back 50% of the 'final' move up. from the very beginning of the trade, i will never give back more than 50% of my equity(their money). i haven't taken a loss in some time. it's a great feeling. i realize there are a couple of hedge fund managers here making 'billions'. perhaps they will weigh in and share their methods. peter.

i trade (position) equities using breakout system based on PnF charts showing double top setup. initial price targets are easily calculated. time frame is intermediate. if position is stopped, reenter on the following double top. actual entry is confirmed on traditional bar chart. been using this system successfully for several years. attached chart shows typical setups(opportunities) break of red lines (double top) are entry points. peter.

i believe the purpose was a random event....random is as random does! peter

sdoma, what you say makes sense. i can't argue with your logic. compared to your hedge fund money, the $130K i make annually from trading really is pretty inconsequential. i get that. but it's all relative. compare the $130K to the income of 95% of traders who lose everything, $130K takes on a different perspective. i guess that puts me in the top 5%, no? peter.

MM, in case you left anything out, i believe you have up to 60 minutes to edit (or delete) your post.....in case you left anything out. peter.