** P & F Values **
IMPORTANT
:
This indicator is very important to all Point and Figure Toolbox formulas. Do not delete or rename this indicator.It is referenced by all other Point and Figure formulas. If this indicator is deleted or renamed, the other Point and Figure formulas will not work until it is restored.
This indicator contains several short lines of text, which set the default values for the box size, reversal amount, the data array to use, and the trendline threshold. If you wish to adjust the Point and Figure parameters used by other toolbox formulas, you should edit this indicator. If you do, you will see the following text:
data:=0;
{ setting data to 0 uses the High Low range }
box:=1;
reversal:=3;
threshold:=2;
The values after the equal sign can be changed and then saved. For example, if you wanted to change the box size from 1 to 0.5, you could do so. The formula would then look like this:
32 • How to Use the Point and Figure Tools
Please note that the semicolon at the end of the line was not changed.
This semicolon is required by the MetaStock formula language and cannot be removed, or the formula will no longer work correctly.
The value on the data line is the price data using in calculating the Point and Figure formulas. This should be set to the same setting selected in the Point and Figure properties window. If this is different, the formulas will not match the MetaStock chart
Finally, do not add this indicator to a chart as it will not plot anything.
The other indicators and their uses are described below.
If this indicator is deleted or otherwise lost, it can be restored by manually re-typing it:
1. Open the Indicator Builder 2. Click New
3. Type in the following text for the name:
** P & F Values **
This must be entered exactly as listed above, with no extra spaces before or after the name
4. In the formula window, type in the five lines of code listed above. Capitalization does not matter here. Just make sure the punctuation is exact.
5. Click OK. If everything is entered correctly, the indicator editor will close.
How to Use the Point and Figure Tools • 33
P & F Current Box
When plotted in a chart, this indicator graphically shows the current value of the box last drawn on a Point and Figure chart. This is useful in overlaying a Point and Figure analysis on other price styles. It can also be used to gauge how close the prices are to a reversal.
P & F New Column
This indicator plots a flat line with a spike where a Point and Figure chart has switched to a new column. If either of the Point and Figure Expert Advisors is attached, this indicator is not needed. It is included as an alternate way to identify these switching points.
P & F Resistance Trendline
This plots the resistance level for the Point and Figure chart. It is normally used with the P & F Support Trendline indicator. It automatically adjusts itself to changes in trends or breakouts of the current trend channels. A breakout requires the prices to move the threshold amount outside the current trend channel.
P & F Support Trendline
This plots the support level for the Point and Figure chart. It is intended to be used in conjunction with the P & F Resistance Trendline indicator.
The indicator adjusts to reflect trendline breakouts. A breakout requires the prices to move the threshold amount outside the current trend channel.
The support and resistance trendline indicators require one more comment. These indicators adjust to reflect breakouts. On a Point and Figure chart, this means that after a breakout, the indicator will position itself at the high and low of the column that triggered the breakout. On other price styles, this adjustment is more dramatic. The new level of support and resistance is drawn for all dates contained within the column. This means that the past bars, potentially weeks of data, will have the support and resistance lines redrawn.
For this indicator to plot correctly in a Point and Figure chart, all dates within a given column must have the same value. This rule necessitates the re-drawing of the trendline. Other arguments for this action exist, but the stated one is predominant. Warning of this change is mentioned here to prevent any confusion when this happens.
P & F Trend
This indicator doesn’t plot anything until the toolbox detects a trend. A trend requires at least 5 columns of Point and Figure data. Once a trend is detected, the formula plots either a 1 for a bullish trend, or a -1 for a
34 • How to Use the Point and Figure Tools
bearish trend. This trend calculation is based on the breakouts of the support and resistance indicators. Just as they adjust for breakouts, this indicator also changes the recent historical values to reflect a change in the trend.
P & F 45 Down
For this indicator to work properly, please use the following procedure:
1. Change the chart to a Point and Figure chart
2. Making sure the chart style properties match the values in the
“** P & F Values **” indicator.
3. Open the Data Window (in the View menu, select Data Window).
4. Locate the place where you want the trendline to start and position your mouse over that column.
5. In the data window, note the date it displays and the box values.
6. Now plot the indicator in the same window as the prices.
When it is plotted in your chart, you will get the following window:
7. In the first three boxes, enter the date from the starting column.
8. Set the value of the box you want the line to start at, usually 1 box above or below those listed in the Data Window.
9. Clicking OK, the trendline will be plotted in your chart, looking something like the chart below.
How to Use the Point and Figure Tools • 35
It may take some practice to correctly anchor the starting point. After the trendline is plotted in the chart and looks correct on the Point and Figure chart, you can change the chart back to your chosen price style. The trendline will be carried over to the new price chart and plot the values corresponding to the Point and Figure chart. In a time-based chart, this will resemble a series of stair steps as seen in the chart below.
36 • How to Use the Point and Figure Tools
P & F 45 Up
For this indicator to work properly, please use the following procedure:
1. Change the chart to a Point and Figure chart
2. Making sure the chart style properties match the values in the
“** P & F Values **” indicator.
3. Open the Data Window (in the View menu, select Data Window).
4. Locate the place where you want the trendline to start and position your mouse over that column.
5. In the data window, note the date it displays and the box values.
6. Now plot the indicator in the same window as the prices.
When it is plotted in your chart, you get the following window:
How to Use the Point and Figure Tools • 37
7. In the first three boxes, enter the date from the starting column.
8. Set the value of the box you want the line to start at, usually 1 box above or below those listed in the Data Window.
9. Clicking OK, the trendline will be plotted in your chart, looking something like the chart below.
It may take some practice to correctly anchor the starting point. After the trendline is plotted in the chart and looks correct on the Point and Figure chart, you can change the chart back to your chosen price style. The
38 • How to Use the Point and Figure Tools
trendline will be carried over to the new price chart and plot the values appropriate to the Point and Figure chart. In a time based chart, this will resemble a series of stair steps.