• : January 25, 2021
  • : Prashant Shah


BOOST: A Multi-timeframe trading system

Major advantage of Point & Figure chart system is that it is objective in nature and gives us opportunity to design different types of systems or patterns that we observe in markets.
Below is an idea of a trade system or pattern on multiple timeframes.

Concept:

A stock should be in uptrend on higher timeframes, or it should be at a significant support level. Trend should be bullish on all other timeframes and it should be near bullish breakout level so that we can analyse the chart and plan a trade.

Defining concept on P&F chart

Let’s design it on Point & Figure charts:
  1. At support level on higher timeframes

“‘O’ at same level” condition shows that price is at a support level – Please read our Newsletter dated 13th April 2020 for more details.




I would add Weak breakout condition also in this. Below is an image explaining bullish Weak Breakout pattern.



After Double-bottom sell pattern, bears could not take price down by more than 2-boxes and column reversed to ‘X’. It is a bullish swing failure pattern and indicates that bears are weak. Support was breached but bulls managed to take price above the support level.

 2.Price in uptrend on all timeframes

If price is in a column of ‘X’ – it is in uptrend. Simple yet very useful pattern


 

 3. Probable breakout on lower timeframe

Double-top buy is a bullish breakout pattern. There is a pattern called ‘Not Double-top buy’.



Not Double top buy pattern shows us the list of stocks which are in column of ‘X’ but double-top buy pattern has not been triggered as yet.


The length of column of ‘O’ can also give us idea about initial risk. We can trade the pattern if initial risk is affordable. Probable breakout pattern will give us opportunity to asses risk, analyse chart and decide if we want to trade the breakout.

BOOST:

Box-value
Let’s select four different box-values that defines the horizon:
0.25% x 3 on Daily chart for short-term. 1% x 3 on Daily chart for Medium-term.
2% x 3 on Daily chart for Intermediate-term. 3% x 3 on Daily chart for Long-term.

Conditions

System for support on higher timeframes 3% and 2% = ‘O’ at same level or Weak breakout.
System for uptrend in all timeframes = Price is in column of ‘X’.
System for Probable breakout on lower timeframe 0.25% = Not Double-top buy.
Name of the strategy is BOOST – ‘BO’ for Breakout, O for ‘O’ at same level, ‘S’ for Support and ‘T’ for Trend

Thi
s will help you to remember the strategy.

Below is a table showing conditions against each box-value.




 

Scanner:

We need to create three systems for this:

1) System for Higher timeframes 2% and 3%

Steps
  • Go to System Builder -> P&F System builder
  • Select P&F chart -> Add -> Add below patterns
  1. O at same level
  2. Weak Breakout Bullish
  3. Last column is X
Expression: 1  or  2 or 3
  • Give name to the system: Support or Trend (Higher box-value)
 
2) System for Medium-term timeframe 1%
 
Steps:
  • Go to System Builder -> P&F System builder
  • Select P&F chart -> Add -> Add pattern ‘Last Column is ‘X’.
  • Expression: 1
  • Give name to the system: Last column is X
  • Save the system.

3) System for Lower box-value 0.25%
 
Steps:
  • Go to System Builder -> P&F System builder
  • Select P&F chart -> Add -> Add pattern ‘Not Double-top buy’.
  • Expression: 1
  • Give name to the system: Not Double-top buy
  • Save the system.


How to scan BOOST strategy

Steps
  • Click on Matrix Menu
  • Go to P&F System Matrix
  • Select Group name
  • Select appropriate conditions for each box-value. Check below image:
 


Run the scan

You will see a table with score against each box-value.
  • If score is 1, stock qualifies for the condition selected for that box-value.
  • If score is 0, stock is not qualified.



If total score is 4, stock is qualified for all conditions and you will be able to see that in the remark column.

We can sort that column and check the list of qualified stocks and probable breakout candidates.



You can also export this list and check stocks having score of 3 to check which condition was missed. They can also be interesting candidates.


Purpose of this post is to make you think laud at design such type of strategies on multiple timeframes.

We discussed bullish BOOST strategy. Can you design bearish strategy with exactly opposite conditions? Try it – treat it as an assignment and let us know if you need help.