Point and Figure (PnF) MACD

31 ene 2020

This is live and non-repainting Point and Figure Chart MACD tool. The script has it’s own P&F engine and not using integrated function of Trading View.

Point and Figure method is over 150 years old. It consist of columns that represent filtered price movements. Time is not a factor on P&F chart but as you can see with this script P&F chart created on time chart.

P&F chart provide several advantages, some of them are filtering insignificant price movements and noise, focusing on important price movements and making support/resistance levels much easier to identify.

P&F MACD is calculated and shown by using its own P&F engine.

If you are new to Point & Figure Chart then you better get some information about it before using this tool. There are very good web sites and books. Please PM me if you need help about resources.

Options in the Script

Box size is one of the most important part of Point and Figure Charting. Chart price movement sensitivity is determined by the Point and Figure scale. Large box sizes see little movement across a specific price region, small box sizes see greater price movement on P&F chart. There are four different box scaling with this tool: Traditional, Percentage, Dynamic (ATR), or User-Defined

4 different methods for Box size can be used in this tool.
User Defined: The box size is set by user. A larger box size will result in more filtered price movements and fewer reversals. A smaller box size will result in less filtered price movements and more reversals.

ATR: Box size is dynamically calculated by using ATR, default period is 20.

Percentage: uses box sizes that are a fixed percentage of the stock's price. If percentage is 1 and stock’s price is $100 then box size will be $1

Traditional: uses a predefined table of price ranges to determine what the box size should be.
Price Range Box Size
Under 0.25 0.0625
0.25 to 1.00 0.125
1.00 to 5.00 0.25
5.00 to 20.00 0.50
20.00 to 100 1.0
100 to 200 2.0
200 to 500 4.0
500 to 1000 5.0
1000 to 25000 50.0
25000 and up 500.0

Default value is “ATR”, you may use one of these scaling method that suits your trading strategy.

If ATR or Percentage is chosen then there is rounding algorithm according to mintick value of the security. For example if mintick value is 0.001 and box size (ATR/Percentage) is 0.00124 then box size becomes 0.001.

And also while using dynamic box size (ATR or Percentage), box size changes only when closing price changed.

Reversal : It is the number of boxes required to change from a column of Xs to a column of Os or from a column of Os to a column of Xs. Default value is 3 (most used). For example if you choose reversal = 2 then you get the chart similar to Renko chart.

Source: Closing price or High-Low prices can be chosen as data source for P&F charting.

P&F MACD Part
Fast Length: Fast Length for P&F MACD , default value is 12

Slow Length: Fast Length for P&F MACD , default value is 26

Signal Smoothing: Signal Length, default value is 9

Source: Moving averages on P&F charts are based on the average price of each column. Bar chart moving averages are based on each close price. Average price means “(ClosePrice + OpenPrice) / 2”. You can choose Close Price or Average Price as source. Default is Average Price.

There are 2 Alerts:
If PNF MACD line crossover the signal line
If PNF MACD line crossunder the signal line
While adding alert “Once Per Bar Close” option should be chosen.