Nikhil asks “do you follow Point and Figure charts also? Did you try this type? what's your experience? with them?
Are not they less 'noisy' than normal bar/candlesticks charts?”
My Notes: Since this a question that I can answer easily, I picked it up for a reply as soon as I read it.
All technical tools work as promised provided the trader follows the tools, consistently. Then, point and figure charts are as good or as bad as most other technical methods. The skill lies with the trader.
I do not track point and figure charts. I have experimented with them earlier. I realized that I was comfortable with standard O_H_L_C charts and classical chart patterns. Point and figure charts also have their own pattern recognition methods. Any one method of analysis is good enough.
Point and figure charts have a distinct disadvantage, which was not so much of an issue earlier, but is now a clear drawback. These charts do not show gaps. Thus, overnight gaps are not visible. For intraday or even swing traders who use intraday charts, this becomes a major problem. Twenty years ago, intraday trading was not popular so the issue of gaps was not important. Now, if you are any kind of intra day trader , I cannot understand how you can use point and figure charts for such trading.
Reader comments are welcome.