[theory6453]

To follow up on P&F, do you have a high-level threshold for P&F where you move from traditional box down to percentage P&F chart? (i.e. - Price > $10 use traditional P&F; Price < $10 use percentage method) Is there an in-between method? Is there a price range where you might look at both.

With P&F charts I look at multiple box sizes and percentage and traditional scaling, much the same as with line charts I look at monthly, weekly and daily charts, and use the log and linear scales to get different perspectives. So I'd suggest looking at both if you can, but if you want a standard setting for an at a glance look that works well across all kinds of stocks then a 1% box size by 3 reversal is a good starting point.

A good free learning tool is the Dorsey P&F University which has six lesson sections with quiz questions at the end of each section to make sure you've understood what you've learnt.

On an another note, I was re-reading Stan's section on sell stops last night. His advice was to set the stop just below the nearest round number (i.e. - $17 7/8) Now, of course, this was back in the 80s when stocks were tracked in eighths of a point. Do you have a guideline that you follow to adhere to this rule that is more up-to-date? To your point earlier, depending on the price of the stock, $0.12 could be quite significant and maybe there is a tighter rule we could be following now that stocks are traded in much smaller fractions of a point.

Per PnF University Lesson 1: Stock prices only. Commodities and ETFs will have different ranges...

If Stock= $0 - $5 then Box Size= .25
If Stock= $5 - $20 then Box Size= .50
If Stock= $20 - $100 then Box Size= 1.00
If Stock= $100 - $200 then Box Size= 2.00
If Stock= $200+ then Box Size= 4.00