Point & Figure Chart

What is a 'Point & Figure Chart'

A point & figure chart is a chart that plots day-to-day price movements without taking into consideration the passage of time. Point and figure charts are composed of a number of columns that either consist of a series of stacked X's or O's. A column of X's is used to illustrate a rising price, while O's represent a falling price. As you can see from the chart below, this type of chart is used to filter out non-significant price movements, and enables the trader to easily determine critical support and resistance levels. Traders will place orders when the price moves beyond identified support/resistance levels.

Point & Figure Chart


BREAKING DOWN 'Point & Figure Chart'

Additional points are added to the chart once the price changes by more than a predefined amount (known as the box size). For example, if the box size is set to equal one and the price of the asset is $15, then another X will be added to the stack of Xs once the price surpasses $16. Each column consists of only one letter (either X or O) - never both. New columns are placed to the right of the previous column and are only added once the price changes direction by more than a predefined reversal amount.

RELATED TERMS
  1. Box Size

    The minimum price change that must occur before the next mark ...
  2. Count

    A type of technical analysis that uses point and figure charts ...
  3. Reversal Amount

    The amount of price movement required to shift a chart to the ...
  4. Weekly Chart

    A chart where each data point is comprised of the price movement ...
  5. Line Chart

    A style of chart that is created by connecting a series of data ...
  6. Discounted Cash Flow (DCF)

    Discounted cash flow (DCF) is a valuation method used to estimate ...
Related Articles
  1. Forex Education

    Tic-Tac-Toeing Your Way To Better Returns

    Point-and-figure charts eliminate the noise surrounding a stock to help you determine where it's headed.
  2. Active Trading

    Point And Figure Charting Basics

    Learn how to construct and read these price charts designed to highlight entry and exit points for longer-term positions.
  3. Markets

    Financial Tables: Mutual Fund Table

    Take a look at the mutual fund table below: Columns 1 & 2: 52-Week High and Low. These are the mutual fund's highest and lowest over the previous 52 weeks (1 year). This typically does not ...
  4. Active Trading Fundamentals

    Market Breadth: Point & Figure Internal Indicators

    Brief History Before the dawn of computers, the point-and-figure (P&F) technique of charting was popular among market strategists on Wall Street. Back then, with P&F charting, a pencil ...
  5. Trading Strategies

    Technical Analysis: Chart Types

    By Cory Janssen, Chad Langager and Casey MurphyThere are four main types of charts that are used by investors and traders depending on the information that they are seeking and their individual ...
  6. Options & Futures

    Testing Point-And-Figure Patterns

    Learn the patterns that will help you pinpoint and profit from breakouts.
  7. Investing Basics

    Stocks Basics: How to Read A Stock Table/Quote

    Any financial paper has stock quotes that will look something like the image below: Columns 1 & 2: 52-Week High and Low - These are the highest and lowest prices at which a stock has traded ...
  8. Markets

    Financial Tables: Stock Tables/Quotes

    Open any financial paper and you will see stock quotes that look something like the image below. In this section, we'll explain how to make sense of these tables so that you can use the information ...
  9. Markets

    Financial Tables: Options Table

    Finally, let's take a look at the Options table: Column 1: Strike Price. This is the stated price per share for which underlying stock may be purchased (for a call) or sold (for a put) by the ...
  10. Retirement

    Bond Basics: How To Read A Bond Table

    Column 1: Issuer - This is the company, state (or province) or country that is issuing the bond. Column 2: Coupon - The coupon refers to the fixed interest rate that the issuer pays to the ...
RELATED FAQS
  1. Point and Figure Charting Using Count Analysis

    See how traders use count analysis on point and figure charts, and learn why this method differs from more traditional types ... Read Answer >>
  2. How do you the calculate Sharpe ratio in Excel?

    Learn how to use Microsoft Excel to calculate the Sharpe ratio, an investing tool useful for assessing the relationship between ... Read Answer >>
  3. Can you calculate the marginal tax rate in Excel?

    Learn how to approximate taxes owed and if Excel and marginal tax rate data provide an accurate number for personal tax calculation. Read Answer >>
  4. What's an easy way of calculating gross sales in Excel?

    Use Excel to calculate gross sales, display sales data, and establish a template that allows for extensive sales calculations ... Read Answer >>
  5. How can I use Excel as my business's general ledger?

    Follow these steps to set up a general ledger accounting system in Excel. A small business can use Excel as a substitute ... Read Answer >>
  6. How do you calculate r-squared in Excel?

    Calculate R-squared in Microsoft Excel by creating two data ranges to correlate. Use the Correlate formula to correlate both ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center