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The document proposes a programmatic way to generate point and figure charts for analyzing stock market data. It details how point and figure charts work and how the tool can be customized and integrated with proprietary trading formulas. Instructions are provided on installing and running the open source Python software.

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pallavagt2232
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35 views2 pages

Talk

The document proposes a programmatic way to generate point and figure charts for analyzing stock market data. It details how point and figure charts work and how the tool can be customized and integrated with proprietary trading formulas. Instructions are provided on installing and running the open source Python software.

Uploaded by

pallavagt2232
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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A programmatic way to generate point and

figure charts for stock market price Data.


In this paper I propose a programmatic way to generate point and figure charts. Point and figure
charts provide a way of plotting stock market data without considering the time scale. Hence for
the price action trades it provides a mechanism which can depict the trend, trend reversal in a
definitive way. There are several established formulas available which are used to set the price
target for a taken trade. There are also ways which traders use to place stop loss as well. Hence in
a nutshell, among the traders and investors point and figure charting technique is popular. Many
trading decisions are made by observing the chart generated in point and figure way. The goal of
this tool is to provide a way by which traders can do the necessary calculations automatically.
Most of the time and for most of the people trading is a discretionary process. For the dedicated
and experienced traders it is a business. They use their proprietary formulas which are not
available in the market. Nowadays many mechanical traders prefer and want automatic
execution of orders at the exchange with the use of application programming interfaces. The tool
is customizable and made in such a way that they can integrate their proprietary formulas with
the help of a programmer and use it to make different trading decisions. The project is an open
source project. Either with little programming knowledge of python or with the help of a
programmer it can be customized as per the trading needs of an individual.

In connection to real time usage:

•It has been successfully tested with the Zerodha Kite Api, Quandl data feed and Globaldatafeeds
historical api.
and
• The goal is to take advantage of the programmatic way of trading which is gaining popularity
day by day.

In point and figure charts rising prices are represented in terms of ‘X’s and falling prices are
represented in terms of ‘O’s. Each ‘X’ or ‘O’ occupies a box. When price goes on rising by a
certain value or percentage during an existing uptrend, a new ‘X’ is added over the previous ‘X’,
thus forming a column of ‘X’s. When price goes on falling by a certain value or percentage
during an existing downtrend, a new ‘O’ is added below the previous ‘O’, thus indicating the
continuation of the downtrend. If price goes in the opposite direction by a certain value or
percentage, then if reversal occurs. The value or percentage defines the ‘box-size’
Each column of rising ‘X’s represents an uptrend, whereas each column of falling ‘O’s
represents a downtrend. There are specific as well as discretionary guidelines to determine
price targets[2].
It can be observed that each box contains either a ‘X’ or an ‘O’. The size of the box is
predefined in terms of price points.

How to use the software?


1. Install python, preferably 3.7.
2. You have to clone the git repository on your computer.
3. You have to navigate to the directory and open the ‘dhelm_pnf_chart_gen_settings.xlsx’
file in the setting folder and provide the necessary parameters.
4. Run the command python dhelm-pnf-chart-generator.py

The necessary output will be generated.

The traders who want to customize the software can do so with working knowledge of python or
can do so by hiring a programmer.

That’s all and thank you.

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