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ADVFN HomeHelpChartsPoint & Figure ChartsUnderstanding P&F ChartsIntroduction
Understanding P&F Charts
  Patterns and Lines
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  Plotting Example


Point and Figure charting served as an easy-to-draw by hand way to maintain large collections of charts in the age before computers. It is even easier to plot them now using computer. While their appearance and method of plotting may seem alien at the first sight, you'll soon discover that they in no way lost their significance in identifying patterns, trend lines and support/resistance levels.

P&F chart consists of columns of 'X's and 'O's, individually named boxes, 'X's representing upward movement and 'O's downward. It has usual vertical price scale while its horizontal scale represents time with uneven increment. In general, time scale becomes more dense when there are less price movements and less dense when there are more. The best way to understand P&F charting is to plot a chart by hand. See the next section for an example.

P&F chart has two basic parameters, box size and reversal amount. Box size is expressed in price units and determines quantification of price changes. Reversal amount is number of boxes when price movent reverses on chart, which is represented by adding new column. Each column consists of either only 'X' or 'O' boxes, with the exception of reversal=1 case described in Basic Usage. Box size selection generally depends on price range of data and larger reversal amount serves longer term patterns identification.

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