What is point and figure charting or P&F charting?
Point and figure (P&F) is a charting technique used in technical analysis, used to attempt to predict financial market prices. Point and figure charting is unique in that it does not plot price against time as all other techniques do. Instead it plots price against changes in direction by plotting a column of Xs as the price rises and a column of Os as the price falls.
You may have seen auto updating Nifty’s P&F charts at our P&F Charts page.
P&F charts are typically (not always) constructed with Xs and Os
Xs represent up movements
Os represent down movements
Price is scaled on the vertical Y-axis
No time scale along the horizontal X-axis
Time not part of construction or analysis
X and O represents a price interval – Box Size
Price changes below the box size are ignored
Column changes determined by Reversal Size
Reason for using point and figure charts:
Voice of the Market
Only move when market moves
Objective trend definition
Multiple time horizons from same data
Objective price targets & risk-reward ratios
Better for Relative Strength analysis
Ideal for scanning of stock universes
We are sharing a here nice power point presentation written by CMT Jeremy Du Plessis. You can freely download and power point presentation by clicking the button below. You need an account in Facebook to download this file.
This power point presentation will give you an introduction on how point and figure charting work. You may distribute this power point presentation to your friends, but do not forget them to refer them to our site.
You can also get access to Point & Figure charts live online in Zerodha Pi and Kite trading terminal. You need a trading account in Zerodha to access it. CLICK HERE to open a trading account in Zerodha.
Indrajit is a professional blogger and trading system developer. Amibroker expert, WordPress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.
Categories: Trading Strategy