RULE-BASED TRENDLINES IMPROVE DISCIPLINE. How to use point & figure trend lines in candlestick charts.

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1 TIPS. 05 SKYSCRAPER. Jin Mao Tower, Shanghai. The third tallest building in the RPC on the scale of 421 metres high. RULE-BASED TRENDLINES IMPROVE DISCIPLINE. How to use point & figure trend lines in candlestick charts.

2 RULE-BASED TRENDLINES IMPROVE DISCIPLINE. by Philipp Kahler 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 philipp.kahler@

3 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.

4 To get the trend lines on your candlestick chart you have to do the following steps: Watch video to see how you can do this quite easily in Tradesignal. 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. 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. 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.

5 Double click an area in your new Candlestick chart (lower pane of the chart) to expand this part of the chart (see figure 3). Fig. 3: Expanded candlestick chart containing exact (point & figure-based) trendlines. It s now fast and accurate analysis every time I open my workspace. Take care, take profit, Philipp Kahler Senior Quantitativ Analyst at Intalus 2013 Intalus www. Distribution allowed under a Creative Commons Attribution-Noncommercial license: Tradesignal is a registered trademark of Tradesignal GmbH. Unauthorized use or misuse is specifically prohibited.

6 How to find the best performers out of hundreds of stocks in seconds. How to create your own equity basket. How to create and trade an optimal portfolio. How to identify and profit well from a short trade. RULE-BASED TRENDLINES. PROFIT FROM THESE TRADING TIPS AND VIDEOS TOO. TIPS. 01 SCAN FOR THE BEST. SCAN FOR THE BEST. How to find the best performers out of hundreds of stocks in seconds. TIPS. 02 SPEED UP YOUR DECISIONS. TIPS. 03 CONTROL YOUR RISK. AUTO-ADJUST POSITION SIZE. SPEED UP YOUR DECISIONS. How to creat your own equity basket. AUTO-ADJUST POSITION SIZE. How to create and trade an optimal portfolio. MORE KNOW-HOW AND VIDEOS HERE TIPS. 04 HIGHLY EFFICIENT SHORTING. HIGHLY EFFICIENT SHORTING. How to identify and profit well from a short trade.

7 RULE-BASED TRENDLINES. 05 Tradesignal is a registered trademark of Tradesignal GmbH. Unauthorized use or misuse is specifically prohibited. TR DING TIPS. 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. NOT ALREADY A TRADESIGNAL USER? CLICK HERE b FREE TRIAL AND ORDER YOUR FREE TRIAL TODAY.