Point & Figure Chart
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.![]() |
|
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. |
Related Definitions
Articles Of Interest
-
Which Direction Is The Market Heading?
The easy and underused NYSE Bullish Percent Index provides insight into market conditions. -
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. -
Testing Point-And-Figure Patterns
Learn the patterns that will help you pinpoint and profit from breakouts. -
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. -
Low Expense Top Performing ETFs
A technical look at the four ETFs that rank highest for five-year performance, lowest expense ratio and total net assets. -
Break Into Forex In 12 Steps
Learn how to get started in forex trading. -
Market Summary For June 7, 2013
The major U.S. indices were mixed this week as modest improvements in employment numbers struggled to offset stagnant wages and a slightly higher unemployment rate. -
Stocks With Bullish MACD Crossovers
One of the most popular trading indicators is the MACD, and right now it's flashing a bullish signal in these four stocks. -
The Top Trade Setups In Tech
Check out these trade setups in four technology stocks to take advantage of strong market conditions, while still controlling risk. -
Guide to Pairs Trading
Pairs traders wait for weakness in the correlation, and then go long on the under-performer while simultaneously going short on the over-performer, closing the positions as the relationship returns ...

Free Annual Reports