Point & Figure Chart

Dictionary Says

Definition of 'Point & Figure Chart'

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

Investopedia Says

Investopedia explains '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.

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Related Definitions

  1. Box Size

    The minimum ...
  2. Reversal Amount

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  3. Support (Support Level)

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  4. Resistance (Resistance Level)

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  5. Technical Analysis

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  6. Line Chart

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  7. Daily Chart

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  8. Count

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  9. Risk

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  10. Universe Of Securities

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Articles Of Interest

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    Learn how to construct and read these price charts designed to highlight entry and exit points for longer-term positions.
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  9. Triple Screen Trading System - Part 3

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