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A publication of
How to use point & figure trend lines in candlestick charts.
intalus.com
Powered by
RULE-BASEDTRENDLINES IMPROVEDISCIPLINE.
SKYS
CRA
PER.
Jin
Mao
Tow
er, S
hang
hai.
The
third
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the
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TR�DINGTIPS. Issue
05
Philipp is the Senior Quant Analyst at Intalus. He was born in Austria
and studied electrical engineering before joining a large German Bank.
He developed fully automated trading strategies for their proprietary
trading department. His book about how to design winning trading
strategies has been among the top sellers in Germany for the last two
years. At Intalus he is responsible for the in house training of
institutional traders and the development of custom made algorithmic
trading strategies.
You may contact Philipp at
RULE-BASED TRENDLINES IMPROVE DISCIPLINE.by Philipp Kahler
TR�DING TIPS. Issue 05RULE-BASED TRENDLINES.
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RULE-BASED TRENDLINES IMPROVE DISCIPLINE.How to use point & figure trend lines in candlestick charts
Tradesignal offers a feature to combine different chart types like point
& figure and candlesticks into one analysis. This Trading Tips issue
explains why it makes sense to combine point & figure trend lines and
candlestick charts.
Ask two analysts where to lay a current trend line and you will get
three different answers. This is not as flippant as it sounds as trend
lines by their nature are very ambiguous and really rely on ‘personal
preference’. That’s because, or is a function of, the fact that there is
no commonly recognised method on how to draw trend lines on bar
and candlestick charts. These chart types are though, by far, the most
common for viewing data.
With point & figure charts things are quite different. Point & figure
charts define exactly on which highs and lows a trend line has to be
placed. And this algorithm is built in to Tradesignal. You have got two
indicators: ‘P&F Trendlines’ and ‘P&F Support & Resistance’.
Fig. 1: Point & figure chart with automatic trendlines as well as support and resistance lines. Tradesignal offers these lines as indicators.
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TR�DING TIPS. Issue 05RULE-BASED TRENDLINES.
To get the trend lines on your candlestick chart you have to do the
following steps:
01 Open up a point & figure chart.
02 Apply the P&F Trendline and the P&F Support & Resistance indicators
(see Fig. 1).
03 Add the same instrument again to the already existing point & figure charts
using ‘add instrument’ from the drop-down menu. This chart should be a
candlestick chart.
04 Drag and drop the ‘P&F Trendlines’ and the ‘P&F Support & Resistance’
lines from the upper chart down to the candlestick chart so that your chart
looks like in figure 2.
Important step. Finally you have to drag-and-drop both lines from the
left axis onto the right axis to ensure that the lines share the same
axis as the instrument.
I now have a chart set up that will give me tried and tested areas of
support, resistance and trend. Based on the rules of point & figure
charting, rather than some arbitrary lines I may draw.
Watch video to see how you
can do this quite easily in
Tradesignal.
Fig. 2: The candlestick chart in the lower pane consists of the trend lines and support / resistance lines of the (upper) point & figure chart. These had been dragged and dropped from the upper to the lower chart.
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TR�DING TIPS. Issue 05RULE-BASED TRENDLINES.
Double click an area in your new Candlestick chart (lower pane of the
chart) to expand this part of the chart (see figure 3).
It’s now fast and accurate analysis every time I open my workspace.
Take care, take profit,
Philipp Kahler
Senior Quantitativ Analyst at Intalus
Fig. 3: Expanded candlestick chart containing exact (point & figure-based) trendlines.
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© 2013 Intalus – www.intalus.com
Distribution allowed under a Creative Commons Attribution-Noncommercial license:
http://creativecommons.org/licenses/by-nc/3.0/
Tradesignal® is a registered trademark of Tradesignal GmbH.
Unauthorized use or misuse is specifically prohibited.
TR�DING TIPS. Issue 05RULE-BASED TRENDLINES.
SCAN FOR THE BEST.
How to find the best performers
out of hundreds of stocks in
seconds.
SPEED UP YOUR DECISIONS.
How to creat your own equity
basket.
AUTO-ADJUST
POSITION SIZE.
How to create and trade an
optimal portfolio.
HIGHLY EFFICIENT
SHORTING.
How to identify and profit well
from a short trade.
PROFIT FROM THESE TRADING TIPS AND VIDEOS TOO.
A publication of
SCAN FORTHE BEST.
How to find the best performers out of hundreds of stocks in seconds.
intalus.com
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TR�DINGTIPS. Issue
01
A publication of
How to create your own equity basket.
intalus.com
Powered by
SPEED UP YOURDECISIONS.
TR�DINGTIPS. Issue
02
A publication of
How to create and trade an optimal portfolio.
intalus.com
Powered by
CONTROL YOUR RISK.AUTO-ADJUST POSITION SIZE.
TR�DINGTIPS. Issue
03
A publication of
How to identify and profit well from a short trade.
intalus.com
Powered by
HIGHLYEFFICIENTSHORTING.
TR�DINGTIPS. Issue
04
MORE KNOW-HOW AND VIDEOS HERE
www.intalus.com/tradingtips
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TR�DING TIPS. Issue 05RULE-BASED TRENDLINES.
Trad
esig
nal®
is a
reg
iste
red
trad
emar
k of
Tra
desi
gnal
Gm
bH. U
naut
horiz
ed u
se o
r m
isus
e is
spe
cific
ally
pro
hibi
ted.
APPLY RULE-BASED AUTO-TREND LINES TO YOUR CHARTS.
It’s time to be precise when using trend lines. Tradesignal offers you the
right tools for that. Find out how you can trade more efficiently.
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AND ORDER YOUR FREE TRIAL TODAY.
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