Ask Colin

On the Ask Colin page you say use 2% of the price for the Point and figure box size. But in the E171 subject notes you say 2% of the midpoint of the range of the chart. Which is right and what do you do near the margin of the range?

The difference is that when I wrote the ask Colin answer, I kept it simple, because the readers are usually beginners.

The E171 (Specialised Techniques in Technical Analysis subject at the Securities Institute of Australia) subject notes are different - they are for serious students. So, there I talk in far more detail and more specifically. You should rely on E171 information.

I was a little vague on what you do as the price moves to the margins of the range, because this is really mainly "art" rather than "science" - or relies on experience, which is difficult to teach. Also, each situation tends to be different. What I do is to move up or down the scale of box sizes given in the E171 notes. If a bigger or smaller box size makes things clearer, I will probably start using both. Sometimes I will use three box sizes, for different time frames on the same stock.