# Point & Figure Chart

Point and Figure (P&F) charts display 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 Xs or Os.

# Point and Figure (P&F) charts

Point and Figure (P&F) charts display 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 Xs or Os. A column of Xs is used to illustrate a rising price, while Os represent a falling price.

## Point & Figure Chart Calculation

Point and figure charts are constructed as follows:

• Price movements are plotted in columns of X's and O's.
• Each X represents a positive price movement based on a user-selected price 'box'.
• If the plot is in a column of X's and the daily high price exceeds the previous x by at least the box number, then 1 or more X 's are added to the column (an X for each box over the previous X).
• If the daily high price is above the current X, but less than the box price, the plot doesn't change.
• If you are in a column of  X's and the daily low is more than the 'reversal' amount, then you move to a column of O's.
• Each O represents a negative price movement based upon the box price.
• The O column functions similarly, but with respect to price decreases (e.g. if today's low is less than the previous O minus one box, new O's are plotted, etc.).

## Point & Figure Chart Interpretation

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 as shown in the chart below.

Point and Figure charts reduce complex price oscillations to a simple format which only displays significant price moves, providing an extremely insightful view of the price movement.