What is a Point and Figure Chart?
Quick Answer: A point and figure chart plots price in X and O columns based on box-sized moves, removing time to emphasize trend and breakout levels.
Understanding Point and Figure Charts
Point and Figure (P&F) charts plot price without time, focusing on box-sized moves. X-columns represent rising price; O-columns represent falling price. They filter noise and emphasize trend and breakout levels.
Using P&F Charts
Traders set box size and reversal amount (commonly 3 boxes). Signals include double-top breakouts (bullish) and double-bottom breakdowns (bearish). Add trend lines along columns to visualize momentum shifts.
Target Projection
P&F vertical counts project price objectives by multiplying boxes by box size. Use them to set logical take-profit zones.
Considerations
Because P&F ignores intraday swings, it suits swing and position traders. Combine it with standard charts for entry timing and risk planning.
Parameter Dependence
Different box sizes generate different signals. Backtest to ensure consistency with your pair's volatility.
Related Terms
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