Point & Figure Charts for NinjaTrader
 |
Point and figure (P&F) charts have been described as one of the simplest systems for better determining solid entry and exit points in trading. The system monitors supply and demand of each issue while keeping a keen eye on developing trends. While point and figure charting has never been on the top of the list of popular techniques used by technical analysts, there is a growing interest in P&F from all corners of the charting community.
Conventional technical-analysis charts tend to be the open-close/high-low chart. In the creation of P&F, the emphasis is only on the closing price of an issue. The developers of P&F charting were interested in trend development and thus were concerned not with the "noise" created daily by minor moves up or down, but with the larger picture and how that plays out in the areas of supply and demand.
|
The key to P&F charts is the establishment of the 'unit of price', which is the unit measurement of a price movement that is plotted on the graph. On P&F charts, there is no time axis, only a price axis. Rising stock prices are shown with X's and falling prices are shown with O's. These points appear on the chart only if the price moved at least one unit of price in either direction.
So say the closing prices moved up one price unit three times. This would appear as a column of three X's. If the price movement reverses direction, the chart shows a new column of O's, wherein an O is plotted for each unit of price movement. X's and O's never appear in the same column. The chartist, however, must establish how many price units make up a box, which is how much the price must move in the opposite direction for the chart to begin a new column
|
 |
 |
Reading P&F Charts
Now that we have had a look at how to construct a P&F chart, the next question is how do we read it. It is clearly understood by P&F experts that the law of supply and demand determines the price . If the issue is rising in price and we have an uptrend in place with at least three X's, we believe that demand has overcome supply. The reverse, when that chart gives us three O's, indicates supply has overcome demand. P&F charts show us the establishment of trends, trend reversals, and the supply and demand of charted issues.
|
Here is very good group of chart reading examples:
|
|
We are offering P&F Chart for only $39!
|
|
