How to Trade – Book Review – Jeremy Du Plessis, The Definitive Guide to Point and Figure

To the uninitiated, the plot point and figure charts is the only method that analyzes price without the noise of time. The amplification of noise while other forms of cartography – Chandeliers, Ashi and OHLC Heikin is visually disturbing as alternating between newspapers, letters minutes, weekly and monthly.
 
 This removes visual clutter to the point and figure charts. They are binary in its construction – or there is no buy / sell signals and buy / sell pattern or it is not. It is in this clear style clear that Jeremy du Plessis wrote his book.
 
 Jeremy trained as an automotive engineer, then studied as an economist, but gave so much to become a technical analyst. Research Indexia founded in 1983 and pioneered the development of PC-based firm technical analysis. In 2002, he led the merger with Update Indexia plc, where he is currently the Head of Technical Analysis and design of software. While most customers are institutional clients Update, namely Europe and the U.S. commercial banks and investment, the Point and Figure methods taught in the book are universal and relevant for the purposes of retail. He is a member of the Society of Technical Analysts (FSTA) in the United Kingdom, and member of the Market Technicians Association of America (MTA). The MTA awarded the designation of Chartered Market Technician (CMT).
 
 Precision engineering with economic justification is in fact the solid cornerstone of this almanac in P & F methods. With 456 + pages and over 300 color graphics, the book is aptly sub-titled “A Complete Guide to the Theory and Practice Using Point and Figure Charts Approach”.
 
 Jeremy is the consummate alternative “financial engineer.” Avoid heavy economic jargon and fundamental analysis is leaving early in the book, known as the “F” word. What you have to say is actually captured in the way it communicates visually through the cards.
 
 There is enough reading reviews on Amazon and Google Book Search, to help you decide if you want to get the book. For those who have just started or are about to read the book, I have summarized the main concepts in the chapters of the larger and more essential to help you get faster through them.
 
 The number on the right of the title of the chapter is the number of pages contained within that chapter. Not the page number. The percentages represent the amount of each chapter consists of 456 pages in total, excluding the appendices.
 
 Introduction to technical analysis. 3.07% 14.
 1. Introduction to Point and Figure Charts. 5.70% 26.
 2. Features and Construction. 62, 13.60%.
 3. Point of understanding and letters figure. 92, 20.18%.
 4. Projected price targets. 66, 14.47%.
 5. Analysis Point and Figure Charts. 64, 14.04%.
 6. Lists of points and the figure of the indicators. 18, 3.95%.
 7. Optimization of point and figure charts. 24, 5.26%.
 8. Contribution points and the market share figure. 22, 4.82%.
 9. Advanced Techniques point and figure. 38, 8.33%.
 10. The table of examples. 20, 4.39%.
 11. Conclusion. 6, 1.32%.
 12. References and further reading. 4, 0.88%.
 
 Focus on Chapters 2, 3, 4, 5 and 9, which constitutes about 71% of the book. These chapters are relevant to the purpose of trading practice. Here are key points for these chapters focus, I am summarizing from the perspective of a retailer.
 
  2. Features and Construction. This article deals with logic chapters chart construction using Xs and Os, up and down moves, called Xs and Os boxes, box size, size of investment, variable sensitivity, gaps in the shaft Price Y, but no time on the X axis, two-dimensional graphics, volume n, supply and demand and the point of names and figure charts.
 
 Chapter 2 covers the basic attributes for the construction of points and figure charts. What appears here, which is overlooked in most books of P & M, is the emphasis on the variation of the sensitivity of the graphics to change the box size and the size of the investment. The gaps are eliminated and not on the charts at all. The volume is already embedded in the investment account’s P & F of success, without having a very graphic volume separately. There is no need to complain to the settlement price against volume-based studies. Q & M excludes full-time graphical construction. Unlike the graphics based on time (for example, Candlesticks / Heikin Ashi / OHLC, etc), where a minute / day / week / month at the performance chart different points of view that cause visual confusion.
 
 The sub-section on one-box, two-box, box of 3-and 5-box of letters of investment is what makes this chapter different. Most of the literature on the topic focuses on three-box size with the symbolic treatment of other box sizes. This Jeremy where the depth of experience is evident. 34 pages are devoted to the effect of increasing the sensitivity to price (1-box 2-box investment and investment) for the purpose of negotiation with intra-day/day reduce sensitivity to price (5-box investment ) for trade in the positions of several months or highly volatile products. A three investment chart-box is the default and is most relevant to the negotiating positions is held for weeks a month. It applies to most of the indexes / ETFs. For practical reasons given for changing the investment account, which adjusts the weighting given to the prevailing column and the volatility of the underlying statistics. This affects the intensity of continuing or terminating the price along its trend.
 
  3. Understanding Point and Figure Charts. The topics covered include: Point and Figure signals, the strength of the pattern, the differences between one-box and the patterns of three-box traps, expansion patterns, bullish and bearish patterns that Poles Conversely, Analysis congestion, signs of the trend or against the trend, trend lines on point and figure charts.
 
 clear illustrations are given in the demand pushing prices up to a column of X, while supply pushes prices down in a column of zeros. To give examples of how patterns vary with the size of the investment used. There are rules binary to ignore or trade buy / sell signals that are part of a larger, more complex patterns and patterns that catch the eye is not trained in a trade that should have been avoided in the first place. 45? Support degree bullish and bearish trend resistance lines are used to eliminate the subjectivity if a certain price level qualifies as support or resistance. Congestion analysis considers the width of pattern, where the area occupied by a pattern that determines the strength of advancement or decline of price signals to the inputs or potential outlets.
 
  4. Projected price targets. P & F price targets set in the counting of vertical and horizontal box. This section deals with the Counts in the revocation list 1-box, with graphics 3-box reversal, has close to be achieved first, the grouping of objections, denying a recount, opposing positions, combination with trend lines, unfulfilled counts, improbable and impossible account, an accountant for good or bad, Counts of letters of registration and scale of risk to reward ratios.
 
 Estimating a price target with the P & F charts is not subjective, but a clear estimate calculated based on box counts. Each box has an identical size as a square, without exception. In case sizes are uniform, the counts to identify clear objectives. They target can not be 100% accurate and increasingly they are unambiguous. The establishment of vertical and horizontal account of price targets is needed to determine the intensity of strength and weakness in the price trends. There is an oddity in graphs using three-picture investment, which allows both vertical and horizontal account in assessing the viability of a target price. Whereas in a graph of 1-box reversal is limited to only horizontal counts. Account rather than grouped around a particular price target, the stronger is the goal.
 
 What is characteristic of Jeremy’s contribution to this issue is the incorporation of Fibonacci retracement analysis of conventional P & F methods.
 
  5. Analysis Point and Figure Charts. This chapter integrates the fundamental techniques laid down in Chapters 2, 3 and 4 with practical examples of trade. The emphasis on implementation and covers the following topics: Investment Size, Choose the correct size box, select the data series, registration card of the scale, the analysis of one-box, box 2 and 3 – box reversal charts, stops at the point and figure analysis of the first and the entry points.
 
 Resize the box affects the time horizon, not to be mistaken for a period of time, as P & F charts exclude units of time (day / week / month / year). The smaller the box size, the shorter the time horizon, for example, 1-box reversal charts suit intra-day vs. three-picture graphics of the investment are intended to last for 30 offices – 60 days. All trend lines are standardized to a level of 45? degree online. This is not a rigid methodology, but steady and it is possible variability in time and discrete variable has been removed from the lists altogether. Trend lines are the most important element of any letter from P & F and should be given first priority over buy / sell signals. The more complex a bullish / bearish pattern becomes the more important it becomes. To validate the operations to prevent, in or out and evaluate continuously the target price, trend lines and have vertical height of a column and have wide horizontal row.
 
  9. Advanced Techniques point and figure. This chapter is what sets this work apart from other P & F literature. It explains how to use moving averages in point and figure charts, the need to differentiate between the moving averages on a chart of 1-safe investment compared to graph 3-box reversal, using the parabolic stop and reverse (SAR) indicator of a P & F chart and overbought / oversold in the analysis of P & F charts with Bollinger Bands.
 
 Moving averages are a direct confirmation to accept or reject a point and figure buy or sell signal. Parabolic SAR trends points to qualify for a P & F buy / sell signal as one to avoid or take to the entrance of the trade. With Bollinger Bands, there is a further refinement of the methodology in points Squeeze – volatility contraction or expansion statistic is considered significant when the length of the column of a band is equal to or lower than the previous compression.
 
 Jeremy is the first to pioneer the combination of point and figure method of moving averages, parabolic SAR and Bollinger Bands.
 
 In conclusion, Jeremy du Plessis revives a venerable old ship of pure price analysis to transform the supply / demand analysis of trade practices for current market conditions. The profundity of their ideas that gives the vision to fully understand why the price of graphs using only methods of P & F is conclusive, without other forms of cartography.

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