Point and Figure Charts
Technical AnalysisA chart that records price in columns of X and O marks with no time axis, filtering out moves smaller than a chosen box size and reversal threshold.
A point and figure chart plots price movement without a time axis. Rising prices are recorded as a column of X marks and falling prices as a column of O marks, with a new mark added only when price moves by a defined box size, and a new column started only when it reverses by a defined number of boxes. Periods with no qualifying movement add nothing at all.
The effect is to filter out small fluctuations and time-based noise, leaving a chart of movements that met a size threshold. The trade-off is that the box size and reversal setting are choices, not properties of the market: change them and the same price history produces a visibly different chart, so any pattern read from one is conditional on those settings.