Description of The Complete Guide to Point-and-Figure Charting
The aim of this book is to explain point-and-figure charting to European investors and traders, and to show why it is the most reliable technical tool for timing entry and exit points in stocks, indices and other securities.
The book is written for all levels of trader, from the novice to the experienced. It starts by explaining the basics of point-and-figure, and by showing its advantages over other types of chart. Readers are then given step-by-step instructions on how to start a point-and-figure chart from simple price data, and how to add to it day-by-day using simple rules based on end of day highs and lows. The emphasis is on simplicity and clarity.
The section on chart interpretation introduces the basic buy and sell signals, and goes on to explain the more complex signals, in each case illustrating the pattern, and the precise entry and exit points, with colour charts from FTSE stocks and indices. It also shows how trend lines are incorporated into a chart.
The latest point-and-figure trading techniques are covered in depth. The authors show how to: use horizontal and vertical counts to estimate the size of price moves, use stop-orders to protect positions, use pyramiding to maximise profitable trends, and use swing trading in combination with p&f. They also show how to adapt your trading style to the amount of capital you have available and to your risk tolerance.
In the later sections of the book, the authors concentrate on optimisation of p&f trading and the avoidance of the most common trap - 'over-fitting' - and on analysis of the profitability of p&f trading. They demonstrate conclusively that point and figure, correctly applied, produces consistent and reliable profits across a variety of markets.
In summary, Heinrich Weber & Kermit Zieg's book is the definitive guide to the theory and application of point-and-figure charting. It is especially welcome for UK and European traders, since it uses recent charts of FTSE and European securities as examples, and includes hitherto unpublished research on p&f's applicability to European securities.
'This book covers far more than the basics of P&F. It provides a recent reliability test of the method, and actually looks at trading rather than just signal spotting. As such it would be a natural 'primer' for new users, whilst providing plenty for the more experienced type.'
Dave Baker, PFscan Charting Software
'This book covers far more than the basics of P&F, provides a recent reliability test of the method, and actually looks at trading rather than just signal spotting. As such it would be a natural 'primer' for new users, whilst providing plenty for the more experienced type.' Simon Brinsford
If you want to learn point & figure charting, this book is the way to do it. The text concentrates on the three box reversal method, which is the simplest and most popular kind. The authors reduce the learning process to a series of simple steps and take you through practical examples.
The book is a masterpiece of clarity. There is enough repetition to reinforce what you have learnt, but no waffle. There is no author's ego intruding here. The book is streets ahead of an earlier similar volume, and its various US competitors.
The text's accessibility is enormously enhanced by the full colour illustrations. I welcome UK/European focus with recent examples. The other books are US-biased.
Most important of all is the precision of the worked examples, with yellow highlighting to indicate trend lines and similar. Such accuracy is rare in books on technical analysis.
The book really stands up as a self-instruction course, and not many others do that. Although I am surprised to hear myself saying it, the luxury of the heavy duty, photographic paper used through the text made reading so much more pleasurable and easy.It must have been costly to produce.
This book is suitable for beginners, for whom it sets technical analysis in a broad context, but also for experienced technicians who want to branch into point & figure. As a bonus, it gives up to date recommendations on best software - which I know from experience is tricky with point & figure - and - not to be ignored by beginners - on how to draw charts by hand.
All this from a balanced joint authorship of academic and practitioner, both masters of the craft.
Point & figure charting is not everybody's cup of tea, and its simple signals can be fallacious, but it does allow the trader to apply stop losses appropriately and I value the method's focus on uncluttered supply and demand, which is what financial market dynamics are all about.
With no vested interest, I unashamedly admit that this is my favourite investment book published this year, and puts most treatments of technical analysis in the shade. Hugh Thomas
Contents of The Complete Guide to Point-and-Figure Charting
About the authors
Preface
Introduction
- Why Point-and-Figure?
1. Drawing point-and-figure charts
- Background
- How to draw the charts
- Computerised charting
2. Interpreting the charts
- Buy and sell formations
- Trend lines
3. Trading applications
- Judging the distance of a move
- The use of stop orders
- Risk and Position size
- Pyramiding made simple and profitable
- Swing Trading
- Day-trading, speed trading, scalping and market making
- Extending the Point-and-Figure technique to include other markets
- About positions, commissions and brokers
- Tips from experienced traders
4. New optimisation techniques
- Optimisation techniques - making the good better
- Optimisation with a standard software package
- How to benefit from optimisations
5. Profitability analysis - does Point-and-Figure charting really work?
- Why point-and-figure is a good trading system
- Introduction to the historical studies
- The profitability of Point-and-Figure stock trading - the original research
- The profitability of Point-and-Figure commodity futures trading - the original research
- Later commodity profitability research
- Profitability of Point-and-Figure commodity trading 1996-1997
- Profitability of Point-and-Figure stock trading 1994-1996
- Zieg-Weber study on European stocks 1988-2002
6. Technical notes
- The conflict between technical analysis and academic research
- More about scaling
- Description of the program environment used
Appendices
- Quick reference guide to buy and sell signals
- Glossary
- Recommended websites
- Bibliography
Index
About Heinrich Weber and Kermit Zieg
Heinrich Weber is a partner and risk manager of DeTraCo, an active Eurex member firm. He develops risk models and financial forecasting applications with AleaSoft, the European leader in the use of neural networks for the prediction of energy prices.
Kermit Zieg is a Full Professor of Finance and Investments at Florida Institute of Technology's National Capital Region campus in Alexandria, Virginia, where he keeps his finger on the pulse of the markets through active trading. His two major areas of trading and research interest are point-and-figure charting and options.
Shopping basket
