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What is Point & Figure charting?
A charting method that records only meaningful price changes and ignores time.
Point & Figure (P&F) is one of the oldest charting methods in the markets, and one of the clearest. It records price movement as columns of X's (rising prices) and O's (falling prices). Small, meaningless wiggles are ignored. Only moves big enough to matter make it onto the chart.
What makes it different
Most charts, such as candlesticks and line charts, plot price against time. A new candle appears every minute, hour or day whether or not anything happened. A quiet afternoon takes up as much room as a dramatic one.
A P&F chart has no time axis. A new mark is added only when price moves by a set amount, called the box size. The chart changes direction only when price reverses by a set number of boxes, called the reversal amount. If price drifts sideways in a narrow range all day, the chart doesn't change at all.
That one design choice has big consequences:
- Noise is filtered out. Small back-and-forth moves never reach the chart, so what remains is the real supply and demand.
- Support and resistance are obvious. Levels where buyers or sellers stepped in line up as rows of matching tops or bottoms.
- Signals are objective. A buy or sell signal either happened or it didn't. Two people looking at the same P&F chart will agree on what it says.
A short history
P&F charting predates the candlestick charts most Western traders use today. Traders in the 1890s kept "figure charts" by hand, writing prices in columns, and the method first appeared in print in 1898. In 1947, A.W. Cohen of Chartcraft introduced the three-box reversal method that is still the standard, and Thomas Dorsey's 1995 book brought it to a new generation.
The rules have barely changed in over a century, which says something about how well they capture the way markets move. Read the full story in The history of Point & Figure.
What you'll learn here
This knowledge base covers the classic method from the ground up:
- Getting started: how to read the columns, choose a box size and reversal, and plot a chart yourself.
- Buy and sell signals: every classic pattern, from the simple Double Top to Catapults, Triangles and Traps.
- Trends, targets and context: trend lines, price objectives, relative strength and market breadth.
- Putting it to work: using P&F intraday, managing risk, and the most common mistakes to avoid.
Start with Reading X's and O's.
For education only. Nothing here is investment advice or a recommendation to buy or sell any security.