What are Point and Figure Charts?
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Please recommend a ɡοοԁ book οn Charting Methods аnԁ easy software fοr stock trading. Thank Yου
Please recommend a ɡοοԁ book οn Charting Methods аnԁ easy software fοr stock trading. Thank Yου
Tags: General Trading
The basic premise behind point and figure is “the trend is your friend”. Stocks that are moving up usually continue moving up and stocks that are moving down usually continue to go down. Here is the basic info on point and figure For books and how to use point and figure in your investing, try the 3 month trial from Dorsey Wright and Associates,
Comment by Steve — March 17, 2009 @ 3:17 am
Daryl Guppy is an established author on technical trading and it was from him that I first learned about point and figure charts.
Just use the free Incredible charts software – that has point and figure charting.
And now to the real answer of what is a Point and Figure chart – from what I can remember it is a chart full of noughts and crosses.
It simply draws the same info on a chart from a different perspective.
I think it has noughts for +ve days and crosses for -ve days.
For each day the stock goes up, it scores a nought – each day it goes down it scores a cross.
It only starts a new column once if the trend changes from day to day.
Comment by flying_eagle — March 19, 2009 @ 12:44 pm
Point and figure charts do not have a time axis like regular stock charts.
A point and figure chart is a grid with each vertical line representing one dollar. As the stock price moves, the grid is filled in with X’s to represent price increases and O’s for price decreases.
I use these charts occasionally. They help me define a trend when a stock has a very choppy price pattern.
Stockcharts.com has a good explanation of these charts, and has them on their website for stocks listed in the U.S.
I have read the book ‘Point and Figure Charting’ by Thomas J. Dorsey. I would recommend that book.
Comment by bookbyte — March 19, 2009 @ 9:51 pm
The distinction of the Point & Figure chart, what makes it unique and different from all other forms of charting, is that it plots day-to-day price movements without taking into consideration the passage of time.
A column of X’s is used to illustrate a rising price, while O’s represent a falling price. Price must fall by a preset amount before the switch between X’s and O’s.
It filters out non-significant price movements, and enables the trader to easily determine critical Support & Resistance levels, which can be horizontal price lines, or diagonal trend lines.
Some good books on Technical Analysis
The Beginner’s Bible in Technical Analysis is:
Edwards & McGee”Tech. ****. Of Stock Trends”
Droke, ClifTechnical Analysis Simplified
Kahn, Michael N.Tech. ****. Plain & Simple
Kamich, Bruce M.How Technical Analysis Works
Lefevre, EdwinReminiscences of a Stock Operator
Lofton, ToddGetting Started in Futures
Lowenstein, RogerBuffet (Warren)-The Making of a Capitalist
O’Neil, William J.How to Make Money in Stocks
Oz, TonyHow to Make Money From Wall Street
Rotella, Robert P.Elements of Successful Trading, The
Schwager, JackStock Market Wizards
Comment by dredude52 — March 20, 2009 @ 4:18 pm