No. PnF charts don't use Time. They only use Price. 0.50, 0.75 and 1.00 are the box sizes (increments) of the charts.
PnF charting takes practice and hard work to know what trades to take, and which to pass on. What they do for everyone immediately whether you understand them or not is NEVER GO LONG ON A STOCK IN A DOWNTREND UNTIL THE STOCK HAS AT LEAST SURPASSED ITS LAST X COLUMN. Just that alone will prevent you from buying falling knives without a fighting chance for success.
Price is price, regardless of the form in which it is displayed. Holy Grail probably uses a multi-frame reference to take trades which agree on the higher and lower PnF range box frames. If you mentally overlay a minute or range bar on the PnF chart, you will see what he is talking about (I have obviously been spending way too much time looking at charts over the past three years, LOL). The key to trading success is using a method which makes sense to you, you're comfortable with and will allow you to make split-second decisions. If this is what works for Holy Grail, and he wants to share it with the ET Community, more power to 'em. Good trading.
Stops are easy. It is at the point where you are wrong. To be wrong a bullish pattern has to turn into a bearish pattern, or a bearish pattern has to turn into a bulish pattern. If I buy a double top buy signal I am not wrong in that decision until a bearish pattern exists. You have to look at your previous o column to determine where it would become bearish. If that is a long way away you don't take the trade. I just posted a chart of aes and said I would not take that trade at that point for that reason.
OK, here is the BEAUTY of pnf charts. Here is a chart of alcoa. This chart has 8 years of information all on one chart. Every top of an x column is resistance, and every bottom 0 column is support. This is why time is of little use to me. You couldn't see this amount of information on a monthly candlestick chart.
In terms of targets I base it on support and resistance, but I am a little strange in what I call support and resistance. Many people say once support is breached it now becomes resistance and vice versa. I agree with that, but I feel it is not strong resistance and I pretty much discount it. To me strong resistance is the last high of a completed x column, and any new x column will try to exceed the previous x column. So what is my mininum target? The high of the last x column.
Great thread - thanks, HG! A quick question if I may, HG, or anyone else who cares to answer: On intrady charts with bars, right now (due to learning something new) I'm using 1 min charts. On eSignal, I can set PnF charts up and specify Box Size and Reversal. Let's say I want my box size to be .02 (2 cents). Now, would I just plug 3 into the box for Reversal? Does this then mean price would have to move .06 (6 cents) for a Reversal? Can yuo give me an example to clarify this if possible? I'm a bit confused on this one, so any help would be great - thanks!
Yes, if you set up each box size of .02 with a 3 box reversal you will only need .06 cents to change a column of x's to O's. Now if you have a 95 dollar stock this would not be a good idea, but for a stock trading at 3 dollars this could be a viable box size for intraday.