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| The Point and Figure (or P&F) charting method was invented by Charles Dow, the co-founder of the Wall Street Journal, in the late 1800s. However, the technique was further refined by other technical analysts, such as Victor de Villiers, in the early 1900s. P&F charts are a type of technical analysis chart used in trading to plot price movements without regard to time. Instead of using a traditional X and Y axis to plot prices over time, they use X's and O's to represent price changes. The X represents an uptick in price, and the O represents a downtick in price. These charts can help traders identify trends and patterns, including support and resistance levels, price targets, and trend reversals. P&F charts are known for their ability to filter out market noise, help traders avoid false signals, and get a clearer picture of the overall trend of an asset. |
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 Point n Figure (PnF Charts) - Technical Analysis from A to Z
Point & Figure ("P&F") charts differ from traditional
price charts in that they completely disregard the passage of time and only display
changes in prices. Rather than having price on the y-axis and time on the x-axis, P&F
charts display price changes on both axes. This is similar to
Kagi,
Renko, and
Three Line Break charts.
There are several chart patterns that regularly appear in P&F charts.
These include Double Tops and Bottoms, Bullish and Bearish Signal formations, Bullish and Bearish Symmetrical
Triangles, Triple Tops and Bottoms, etc.
Renko - Technical Analysis from A to Z
Renko charts are similar to
Three Line Break charts except that in a Renko chart, a line
(or "brick" as they're called) is drawn in the direction of the prior move only if prices
move by a minimum amount (i.e., the box size).
The bricks are always equal in size. For example, in a 5-unit Renko chart, a 20-point rally is displayed as four,
5-unit tall Renko bricks.
Basic trend reversals are signaled with the emergence of a new white or black brick.
A new white brick indicates the beginning of a new up-trend. A new black brick indicates the beginning of a new down-trend.
Chart Patterns - Technical Analysis from A to Z
A basic principle of technical analysis is that security prices move in trends.
We also know that trends do not last forever. They eventually change direction, and when they do,
they rarely do so on a dime. Instead, prices typically decelerate, pause, and then reverse.
These phases occur as investors form new expectations and, by doing so, shift the security's supply/demand lines.
The changing of expectations often causes price patterns to emerge. Although no two markets are identical,
their price patterns are often very similar. Predictable price behavior often follows these price patterns.
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