What is a 'Point & Figure Chart'
A point & figure chart is a chart that plots daytoday 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 nonsignificant 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.
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.

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