Point and Figure Charts
Point and Figure (P&F) charts are one of the oldest charting methods, dating back to the late 1800s. Instead of plotting price against time, P&F uses columns of Xs (rising prices) and Os (falling prices). A column changes direction only when prices reverse by a specified amount. P&F filters out noise dramatically and is loved by long-term investors and counter-trend traders for spotting clean support, resistance and breakout signals.
Key takeaways:
- P&F charts plot price moves as Xs (up) and Os (down) without time on the x-axis.
- Two key parameters: box size (price move per X or O) and reversal amount (how many boxes to reverse the column).
- Box-size selection matters: small boxes capture noise; large boxes capture only major moves.
- Common signals include double tops, double bottoms, triple tops, and bullish/bearish catapults.
- P&F is excellent for support-resistance analysis and price targets via vertical/horizontal counts.
How P&F charts are constructed
Choose a box size (e.g. ₹5) and a reversal (e.g. 3 boxes). Start a column of Xs as price rises. Each ₹5 rise adds another X. When price falls by 3 × ₹5 = ₹15 from the high, a new column of Os begins. This continues, alternating columns as price reverses by the reversal amount.
Why P&F removes time
Traditional charts spread noise across the time axis. P&F skips the noise entirely — quiet periods produce no new boxes, while volatile periods may generate several columns in a single day. The result is a focused view of only meaningful price changes.
Classic P&F signals
- Double top breakout: A column of Xs exceeds a prior column’s high by one box — bullish.
- Double bottom breakdown: A column of Os falls below a prior column’s low by one box — bearish.
- Triple top/bottom: Three previous tops/bottoms broken — stronger version of the double pattern.
- Bullish/bearish catapult: Combination of multiple breakouts indicating powerful momentum.
Price targets via P&F counts
P&F offers two ways to project price targets:
- Vertical count: Take the column length from a breakout, multiply by box size and reversal, and add to the breakout price.
- Horizontal count: Use the width of a base pattern to project upward by the same number of columns.
Choosing box size and reversal
| Time horizon | Box size | Reversal |
|---|---|---|
| Intraday | 0.1% of price | 3 |
| Swing (daily) | 0.5% of price or ATR/2 | 3 |
| Positional (weekly) | 1% of price | 3 |
Limitations and best practices
- P&F ignores volume, which is valuable context. Overlay or cross-check with volume tools.
- Signals can lag in fast-moving markets because reversals need multiple boxes.
- Apply P&F mainly to liquid stocks and indices for cleaner patterns.
- Use as a confirmation tool alongside trend lines and moving averages.
Frequently asked questions
Are P&F charts still relevant?
Yes. Many professional traders use P&F for long-term S/R analysis and target projection.
Can I use P&F intraday?
Yes, but with smaller box sizes. The signals can be choppy on very small time frames.
Where can I plot P&F charts?
Most modern charting platforms — including Lemonn, TradingView and major broker apps — support P&F.
Do P&F price targets always work?
No method works always. P&F targets are probabilistic; combine with risk management.
