Article Point and Figure Charting: Part 1 – The Basics

T2W Bot

Staff member
1,503 117
Point and Figure (P&F) charting has been around for well over a century, occupying a bit of a niche. It tends to be an area that some get quite heavily into, while a fair percentange of the non-users look at it now and again and regard it as something they?d quite like to get the hang of but never seem to get round to it. As what it does for traders today is far more important than whether Dow used it in 1903 (in my view at least) that?s it for the history lesson.
P&F charts go left to right, with columns of X’s and O?s showing periods when the price was climbing or dropping. That?s not all that dissimilar to most other chart styles ? where P&F deviates somewhat is in the fact that a column can last anything from a day to weeks, months, even years whilst your candlestick chart will draw a new candle every day. The P&F chart only swaps to a new column if the price is deemed to have changed direction by a significant amount ? what constitutes ?significant? can be decided by the user...

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expensif

Active member
155 0
I love point and figure method. It is so simple, yet so powerful.

Much easier than any other technical analysis method.

I think the best Point and Figure charting software is by far "Bull's-Eye Broker", and the price is really low for such a advanced software. With the built in scans you can easily find good profitable trades.
 

fie

Newbie
1 0
Hi Dave, I would like to approach the study of Point & Figure charts, and I would like to try your software (pfscan).
Would it be possible to have a copy?
Thanks so much
Best Regards
 
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piphoe

Legendary member
10,038 194
I've taken quick look at P&F charts from time to time but never intrigued enough & never enough time due to other avenues I've explored to delve into it. The charts look so weird.

Does it provide any unique useful info that can't be gleaned elsewhere with more conventional charting of candles/bars?

i guess what i'm asking is does it work still?
 

timsk

Legendary member
7,611 2,383
. . . i guess what i'm asking is does it work still?
Hi pip,
I thought much the same as you for a very long time and only really made the effort to get a solid grounding in PnF after reading Marc Rivalland on Swing Trading. He is/was very influential here in the U.K. - witnessed by the trading styles of barjon and tomorton.

In answer to your 'does it work' question - the answer is an emphatic yes, if (and it's a big if), you believe in any type of technical analysis. Personally, these days, I prefer Renko - which is very similar to PnF in many ways. If anything, it's a little simpler, but may miss some of the subtleties that PnF picks up. If you want to investigate it, I suggest you make friends with dentist007 and Moneylender over on the Trading with p/f thread.

I would describe it as a very 'clean' and 'pure' form of TA, devoid of all the hocus-pocus surrounding the numerous shapes, configurations and patterns associated with candlesticks. IMO, it's well worth devoting the time and effort to see whether or not it works for you.
Tim.
 

Dentalfloss

Legendary member
63,404 3,726
pandf has no time based inputs.........that is your edge
ditto Renko and 3 line break
They allow you to filter the data

candles/bars are time based and are a blunt instrument......
 
 
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