Point and Figure Charts

A P&F Chart
A Point & Figure Chart

Point and Figure (P&F) charts date back to at least 1880's and differ from other stock charts as it does not plot price movement from left to right within fixed time intervals. It also does not plot the volume traded. Instead it plots unidirectional price movements in one vertical column and moves to the next column when the price changes direction. It represent increases in price by plotting X's in the column and decreases in price by plotting O's. Each X and O represents a box of a set size or price amount. This box size determines how far the price must move before another X or O is added to the chart, depending on the direction of the price movement. Thus if the box sixe is set at 15, the price must move 15 points above the previous box before the next X or O is plotted. Any movement below 15 is ignored. For this reason, very little plotting occurs during stagnant market conditions while a considerable amount of plotting may occur during volatile market conditions.

The chart also has a box reversal amount that determines how many boxes must occur in the opposite direction before it is seen as a reversal. Only once the price is seen as having reversed is a new column started. In a 3 box reversal requires the price to move three boxes (of 45 points if each box represents 15 points) against the current direction before it is seen as a reversal.

Some traders argue that P&F charts are one of the best charting techniques for accurately determining entry and exit signals as they present a clear indication of support and resistance lines, as well as clear trend lines. P&F charts also trace its own set of chart patterns, such as the fulcrum, the saucer, and the V base.

OHLC Bar Charts

OHLC Bar Charts
OHLC Bar Charts

>Bar charts consist of bars, which are vertical lines with the bottom representing the low price (L) of the time-frame and the top representing the high price (H). The bars also have a horizontal dash on the right side of the bar to indicate the close price (C) for the time frame and some have a horizontal dash on the left side to indicate the open price (O).

However, not all bar charts use a horizontal dash on the left side to indicate the open price. When the open price is indicated, the bar is called a OHLC chart as it plots the open, high, low and close; when the bar chart ...

Japanese Candlestick Charts

Candlestick Charts
Candlestick Charts

Candlestick charts have become popular in the West since the 1980s but they date back from the 1700s. The evolution of candlestick charts are generally attributed to the trading principles of a Japanese rice trader named Munehisa Homma who traded rice in 18th century Japan.

In candlestick charts plot the open price and the close price for the period to form the solid body of the candlestick. The high price and the low price are plotted as the upper and lower shadow, respectively. In this respect, they display the same information as OHLC bar ...

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