feature point and figure charting

7/31/2019 Feature Point and Figure Charting

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FEATUREFEATUREFEATUREFEATUREFEATURECICICICICI Understanding and Using Point and Figure ChartsUnderstanding and Using Point and Figure ChartsUnderstanding and Using Point and Figure ChartsUnderstanding and Using Point and Figure ChartsUnderstanding and Using Point and Figure ChartsBy Wayne A. Thorp, CFAWithout a dou bt, software and Web

sites have mad e the lives of numerous

investors easier by speed ing the analy-sis process. One area th at has seen no-

table improvement is chart creation.

Instead of having to spend time each

day manual ly updat ing char t s

wh ich limits the nu mber of securities

one can r ealistically trackinvestors

can now create an endless array of

charts in a matter of seconds with

todays technical analysis and chart-

ing services. Reviews of the top soft-

wa re- and Web-based technical analy-

sis and charting serv ices can be foun d

in the Computerized Investing archivesat the AAII Web site (ww w.aaii.com/

cimember/ ).

The advent of compu terized chart-

ing resources has also led to the emer-

gence of some relatively obscure cha rt

types, such as cand lestick, equivolum e,

and point and figure. This article

serves as an introduction to point and

figure charting and also covers re-

sources for creating and learning m ore

abou t these charts.

Supply and DemandSupply and DemandSupply and DemandSupply and DemandSupply and DemandOne of the basic principles

of economics is the law of

supply and demand. I t

states that in a free market

wh en there are more buyers

than sellersdeman d out-

strips supplyprices will

rise, all else being equal.

Point and figure charts at-

tempt to capture th e battle

between supply and de-

mand.

Point and figure charts

have been in existence for

more th an 100 years, but it

took the advent of computer

software and Web sites to

bring them into the main-

stream. Their u sefulness lies

in their ability to filter out

market noiseshort-term

pr ice fluctuations that occur

du ring longer, more established trend s.

They differ from more conventional

charts such as open-high-low-closecharts in that they ignore the p assage

of timethey are on ly affected by sig-

nificant p rice movemen ts. Figu re 1 is

an example of a point and figure chart

for Moodys Corporation (MCO) that

covers the period of January 4, 2002,

through June 6, 2003. At first glance,

you m ay notice that this chart is quite

different from the oft-used line or bar

charts. First, the chart is made up of

colum ns of Xs and OsXs rep resent

rising prices and Os repr esent falling

prices. Put another way, Xs representdemand and Os supply. The move-

men t from colum ns of Xs to Os and

back again creates patterns that m ay

be used to m ake buy and sell decisions.

Also, note that there are num bers and

letters dispersed among the Xs and

Os. Since point and figur e charts are

not impacted by th e passage of time,

per se, numbers and letters are used to

represent mon ths. The first box entered

in a month is represented by the num -

bers one through nine for January

through September and A, B, and C fo

the dou ble-digit mon ths of OctoberNovember, and December. So a 1

wou ld be u sed to ind icate the first poin

of January and B would represen

November.

There are two key items you need to

addr ess before you can begin creating

your ow n p oint and figure chartsthe

box size and reversal amoun t.

Box SizeBox SizeBox SizeBox SizeBox SizeThe box size is based on the scale

you w ish to use for a particular secu

rity or index and represents the valugiven to each boxX or Oon the

chart. It is the min imum pr ice chan ge

needed to continue the curren t trend

i.e., to add another X to the top of a

column of Xs or to add another O to

the bottom of a column of Os. This i

an imp ortant decision because a m ove

of $3 for a $10 stock is more d ram ati

than a $3 move on a $100 stock. Each

box corresponds to a $1 stock price

move in our examp le in Figure 1. Fur

$54

$53 X

$52 X X

$51 X 8 O X

$50 X X X O X X O X X 5

$49 X O X O X O X O X O X O X O X 4

$48 X O X O X O X O X O X O X O X O X

$47 X 6 O 7 O X 9 O X O X O X

$46 X O X O X O X O

$45 X O X O X O 3$44 5 O X O X B 1 X

$43 X O X O X O X O 2

$42 X 4 O X A O X O X

$41 X O X O O X O X

$40 X O 2 X C O

$39 1 O X O 3

$38 O X O X

$37 O O X

$36 O

02 03

Figure 1.Figure 1.Figure 1.Figure 1.Figure 1.Point & Figure Chart for Moodys Corporation (1/ 4/ 2002 to 6/ 6/ 200 3)Point & Figure Chart for Moodys Corporation (1/ 4/ 200 2 to 6/ 6/ 200 3)Point & Figure Chart for Moodys Corporation (1/ 4/ 2002 to 6/ 6/ 200 3)Point & Figure Chart for Moodys Corporation (1/ 4/ 200 2 to 6/ 6/ 200 3)Point & Figure Chart for Moodys Corporation (1/ 4/ 200 2 to 6/ 6/ 200 3)


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thermore, since point and figure charts

are used to filter out noise in the

market, you will want to be sure thatyou are filtering out just enough mo-

mentary price reversals, yet at the same

time allowing some to p ass through so

that you can identify when a signifi-

cant reversal is taking p lace.

As you u se point and figure charts,

you may find that different box sizes

work better for your trading style or for

a particular security. Traditionally,

however, box sizes have been broken

dow n into the following levels:

Share PriceShare PriceShare PriceShare PriceShare Price Box SizeBox SizeBox SizeBox SizeBox SizeBelow $5 ............................. $0 .25Between $5 and $20 ............ $0 .50Between $20 and $100 ....... $1.0 0Over $100 .......................... $2.0 0

Reversal MethodReversal MethodReversal MethodReversal MethodReversal MethodThe other key to th e analysis of point

and figure charts is how you m ove from

one column to an other, called the re-

versal method. The reversal amoun t

determines how many boxes the price

must reverse course by in order to move

to a new colum n an d switch from Xsto Os, or vice versa. While this can be

left to the individu al creating the chart,

the typ ical reversal is the th ree-box

or three-point reversal. This meth-

odology is thought to eliminate spu ri-

ous price fluctuations and focus only

on significant pr ice movem ents.

Based on the traditional parameters

show n her e, if a stock is trading below

$5 with a box size of $0.25, it would

take a price moveup or downof

$0.75 to generate a three-box (three-

point) reversal. The box size for stocks

trad ing below $5 is $0.25, so a th ree-

box reversal would take at least three

$0.25 price moves to necessitate a sh ift

to a new column of Xs or Os. The

same principle applies no m atter the

box size.

Depend ing on the software p ackage

or Web site you are using to create point

and figure charts, you may have the

ability to sp ecify the box size as w el

as the reversal amou nt.

Hav ing established the param eter

for the essential elemen ts of a poin

and figure chart, you mu st then look

at which price(s) you will use to plo

your char t. Purists generally use the

high and low prices for the period(day, week, month , etc.), while other

may focus strictly on a single price

such as the close. This decision may

be driven by the data source you are

usingw hether or n ot it offers high

and low p rices or merely the closing

price. Depend ing on the p rice(s) you

use, you m ay get different results. Fo

this reason, it is also important to

find out the method used by a soft

ware package or Web site to create

point and figure charts.

When creating point and figurecharts, you remain in the same col

umn of Xs or Os as long as price

continue to rise or fall, respectively

For example, if a chart is in a colum n

of Xs and prices are rising, you

wou ld need to identify wh ether th

price raised one fu ll box or m ore. I

you are basing your decisions on

high and low prices and not the clos

ing price, this is done by looking a

the high p rice for the day . If the pric

did rise by at least one box, you w ould

add an X to the top of the colum n. Athat point, you are done for the day. A

long as prices continue to rise (or do

not fall); the low pr ice is disregard ed. I

the high p rice rose by one box but the

low p rice was several box sizes below

it, you still only plot the one box in

crease. As long as prices continue in

their current p ath, you are only inter

ested in one d irection p er period.

If, however, the next day the price

does not rise by at least one box (stay

ing with ou r example of being in a col

umn of Xs), you must look to see

wh ether the price reversed by three o

more boxes. If it did not, nothing i

add ed to the chart for that day. This i

an example of point and figure chart

filtering out insignificant price

movements; it also differs from ba

charts, wh ere we w ould still plot a ba

even if prices do not m ove. If and w hen

the price reverses down ward by thre

Action Action

Point Point

Date Open High Low Close #1 #2

1/2/2003 41.50 43.70 41.48 43.70 44 401/3/2003 43.95 43.12 44 40

1/6/2003 44.11 42.85 44 40

1/7/2003 42.86 41.88 45 41

1/8/2003 42.61 41.52 45 41

1/9/2003 41.90 40.61 45 41

1/10/2003 40.48 39.50 40 44

1/13/2003 42.70 41.35 39 43

1/14/2003 42.23 41.25 39 43 $44 X

1/15/2003 41.93 41.25 39 43 $43 1 O 2

1/16/2003 42.85 41.77 39 43 $42 O X

1/17/2003 42.55 42.01 39 43 $41 O X

1/21/2003 42.65 42.07 39 43 $40 O

1/22/2003 42.20 41.58 39 43

1/23/2003 42.50 41.85 39 43

1/24/2003 42.25 40.88 39 43

1/27/2003 41.63 39.88 39 43

1/28/2003 41.37 40.36 39 43

1/29/2003 41.65 40.65 39 43

1/30/2003 41.36 40.93 39 43

1/31/2003 41.99 40.92 39 43

2/3/2003 43.11 41.88 39 43

2/4/2003 42.71 41.54 44 40

Price ($)

Figure 2.Figure 2.Figure 2.Figure 2.Figure 2.Plotting Moodys Action PointsPlotting Moodys Action PointsPlotting Moodys Action PointsPlotting Moodys Action PointsPlotting Moodys Action Points


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2July/August 2003

or more boxes, you would shift one

colum n to the right and begin p lotting

a new column of Os.

Point and Figure: Step-By-StepPoint and Figure: Step-By-StepPoint and Figure: Step-By-StepPoint and Figure: Step-By-StepPoint and Figure: Step-By-StepAlthough computerized tools can

create point and figur e charts for you,

it is always necessary to understandthe underlying process. For this rea-

son, we will show you how to m anu-

ally construct a point and figur e chart.

Figure 2 shows the high and low

prices for Mood ys Corporation for the

period of Janu ary 2, 2003, to February

4, 2003, as well as the point and figu re

chart constructed using this data . Dates

that are bolded and italicized iden tify

where a shift takes place from a col-

um n of Xs to a colum n of Os, or vice

versa.

When m anually creating a point andfigur e chart, it is helpful to determ ine

the action points for each period

(also show n in Figure 2). For a chart in

a column of Os, the first action p oint is

the price that is one box lower than the

last. If the low pr ice falls to th is point

or below, w e add to the colum n of Os

dow n to the low price for that period.

The second action p oint wou ld be the

pr ice at which a three-box (three-point)

reversal occurs. This point is three

boxes above the lowest O. If the high

price for the day reaches this point,assuming another O was not add ed to

the column, we w ould then sw itch to a

new colum n of Xs.

When you are in a colum n of Xs, the

first action point is the pr ice that is one

box above th e last X. The other action

pointwhere the three-point reversal

takes placeis the price that is three

boxes below the h ighest X. If this level

is reached, w e switch to a new column

of Os.

Now , lets walk throu gh the plotting

of data from select days in Figure 2.

January 2: When you begin p lotting

a p oint and figure chart, you first mu st

decide w hether you are in a colum n of

Xs or a column of Os. There are a

couple of different methods to use

use the p rior day s close as your refer-

ence point or u se the first day s open-

ing price. Once you select the reference

point, the closing p rice on the first day

you are plotting will dictate whether

you begin p lotting Xs or Os. Note that

this is the only time opening and clos-

ing prices are considered .

For this example, we use the opening

pr ice on Janua ry 2, 2003$41.50as

as the reference point. Compar ing the

closing price on that day$43.70tothe reference point, we see that the

price increased, meaning w e begin our

point an d figure chart by p lotting Xs.

When plotting a point and figure

chart, it is easier to deal in wh ole num -

bers, so the high and low prices for

each day are rounded upw ard or down-

wardlow prices are rounded up to

the next whole number and high p rices

are roun ded dow n. Therefore, $43.70,

the high price, is rounded dow n to 43,

and this is the point where w e plot the

first X of our point and figure chart.How ever, since this is the first p lot in

Janu ary w e use a 1 instead of an X. We

are now d one for the day.

January 3: Since we are in a colum n

of Xs, the first action point is where

we w ould ad d another X to the current

column , in this case 44one box above

43. The other action p oint is 40, which

is three boxes below the current X at

43. The high for the day is $43.95,

rounded down to 43. Since this is be-

low the first action point, we do not

plot anoth er X. Instead , we look at thelow p rice for the day to see if a three-

box reversal has taken p lace. The low

price$43.12, rounded up to 44is

higher than the second action p oint at

40, so we d o nothing for the day.

January 6: The first action point is

that level that is one box above the high-

est X in the current column44 (43 +

1). The high price for the d ay, roun ded

dow n, is 44. Since this equa ls the first

action point, we stay in the same col-

um n and add an X at the 44 level.

January 9: After ad ding a new X to

the current column on January 6, no

action was taken on January 7 or 8.

The first action point is now 45 (44 +

1). The high price for the d ay, roun ded

down, is 41no additional Xs are

add ed to the column. The second ac-

tion p oint is 41 (44 3). The low price

for the day is $40.61, which we roun d

up to 41. Since the low for the day

equals the second action point, a three

box reversal has taken place. There

fore, we sh ift one column to the righ

and start a colum n of Os that begins a

43, one box below the h ighest X of the

previous column, and goes down to

41.

January 10: Now that we are in acolum n of Os, we w ant to kn ow if the

price fell. The first action p oint is the

level where we would ad d another O

to the curren t column; in this case, the

box below th e lowest O at 41 is 40. Th

second action point is where a three

box reversal wou ld take p lace and i

three boxes abov e the low est O: 44 (4

+ 3). The low price of the day, $39.50

round ed u p to 40, equals our first ac

tion point. Therefore, we stay in the

column of Os and add another O to

the bottom of the current column at 40February 3: Since point and figure

charts are only concerned with sig

nificant price movements, do not be

surprised if days or even w eeks go by

with no activity on the chart, as wa

the case between Janu ary 10 and Janu

ary 31. We are still in a column of O

with the lowest at 40. Looking at the

action points for th e day, the first is 39

(one box lower than the lowest O at 40

and the second is 43 (three boxes above

the lowest at 40). The low p rice for the

day, $41.88 round ed u p to 42, is abovethe first action point, so w e move on to

the high price for the day: $43.11

round ed d own to 43. This equals the

second action point, so we shift to a

new column of Xs that begins at 4

and goes up to 43, with a 2 at 43 to

represent February.

Computerizing Point & FigureComputerizing Point & FigureComputerizing Point & FigureComputerizing Point & FigureComputerizing Point & FigureAlthough w e have shown h ow you

wou ld man ually create point and fig

ure charts, realistically you w ould u se

a software p ackage or Web site to cre

ate them for you, allowing yoursel

more time to perform actual analysis

There are severa l tools available to aid

you in this pursu it.

StockCharts.comStockCharts.comStockCharts.comStockCharts.comStockCharts.comWhile a re la t ive newcome

to the a rena of Web-based

charting, the StockCharts Web site


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C24

(www.stockcharts.com) has trans-

formed itself into a lead er in the field.

Not on ly does it offer a w ide array ofcharting optionsincluding p oint and

figureit also offers chart scanning ca-

pabilities and an extensive educational

area dealing with charting and techni-

cal analysis. The site offers both free

access as well as expanded features

with a var iety of subscription op tions

ran ging in p rice from $9.95 to $30.95 a

month.

Two types of point and figure charts

are offered: text-based classic charts

and Java-based dynamic charts.

While the classic charts can be viewed

with any Web browser, you mu st have

a Java-enabled Web browser to view

dyn amic charts.

Free access at the Web site allows

you to p lot up to three years of data on

a chart; subscribers can plot data go-

ing back to 1990. Subscribers also have

the benefit of being able to save the

charts they create for future viewing.

One d raw back with the classic chart i

that you are limited to predefined time

periods over which the data can be

plotted. While slightly cumbersome

the dyn amic charts provide a sliding

bar where you can specify the exac

time period you want charted. With

both types of point and figure chartsyou can specify the reversal amoun

for a chart as w ell as the box size. By

default, the dynamic charts use the

high/ low range in creating the charts

wh ich is the method w e used to creat

the Moodys chart. With the classi

point and figure charts, you have the

option of using the high/ low range o

the closing p rice.

Once you have created your poin

and figure chart, you have a nu mber o

additional analysis tools and feature

at your disposal. With the classiccharts, users can app ly price overlay

such as trading bands, automati

trendlines, and moving averages

While these features are not availabl

with the d ynam ic charts, users can plo

their own trendlines within the Jav

applet. The site also autom atically gen

erates point and figure alerts for any

chart you create. These alerts are avail

able on the classic charts and are mean

Figure 4.Figure 4.Figure 4.Figure 4.Figure 4.StockCharts.com Predefined Point and Figure ScansStockCharts.com Predefined Point and Figure ScansStockCharts.com Predefined Point and Figure ScansStockCharts.com Predefined Point and Figure ScansStockCharts.com Predefined Point and Figure Scans

Figure 3.Figure 3.Figure 3.Figure 3.Figure 3.StockCharts.com Point and Figure AlertStockCharts.com Point and Figure AlertStockCharts.com Point and Figure AlertStockCharts.com Point and Figure AlertStockCharts.com Point and Figure Alert


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2July/August 2003

Figure 5.Figure 5.Figure 5.Figure 5.Figure 5.StockCharts.com Multiple-Expression ScansStockCharts.com Multiple-Expression ScansStockCharts.com Multiple-Expression ScansStockCharts.com Multiple-Expression ScansStockCharts.com Multiple-Expression Scans

Figure 6.Figure 6.Figure 6.Figure 6.Figure 6.

MarketScreen.com Point and Figure ChartMarketScreen.com Point and Figure ChartMarketScreen.com Point and Figure ChartMarketScreen.com Point and Figure ChartMarketScreen.com Point and Figure Chart

to alert you to changes in the supp ly/

dem and relationship of the stock point.

Figu re 3 is an examp le of a point an d

figur e alert for Mood ysin th is case,

a bu llish ascend ing triple-top br eakout

alert.

Another u nique feature is the rela-

tive strength chart, w hich is also avail-able only w ith the classic charts. This

point and figure chart compares one

ticker to anoth er. The pr ice of the first

symbol is divided by the price of the

second and then scaled to create the

chart.

Beyond charting, the StockCharts

Web site offers stock scans, wh ich a re

formulae applied to the sites universe

of stocks, mutu al fun ds, and indexes

that retu rn a list of tickers that m atch

the filter criteria of the scan. These scans

are broken d own into groupstechni-cal ind icator scans, cand lestick pattern

scans, and point and figure pattern

scans. There are currently 17 pre-

defined point and figure pattern scans;

see Figure 4 for a listing of th ese scans.

As this figure also shows, the site of-

fers a link to the list of tickers m atching

each scanas of the end of the last

trading daybroken down by ex

change. From this list, you can acces

charts for each of the passing tickers.

Subscribers to the site can a lso creat

their own scans and save them (Extra

subscribers only). Basic subscribers can

create single-expression scans, while

Extra! subscribers can create mu ltiple

expression scans (Figure 5). Once you

have created a scan, you can view any

where from 10 to 999 of the passing

tickers, depending on you r subscrip

tion level.

Finally, for those who are new to

point an d figure charting or technica

ana lysis, StockCharts.com offers some

of the best edu cational content available for free on the Internet in thi

area. The sites Char t School offers an

overview of technical analysis as w el

as discussions of popu lar chart typ e

(including point and figure charts

and technical ind icators. Tutorials are

also available on how to use the vari

ous elemen ts of the StockCharts Web

site.


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C26

Figure 8.Figure 8.Figure 8.Figure 8.Figure 8.

DW A Trading Summary for SubscribersDW A Tradi ng Summary for SubscribersDW A Trading Summary for SubscribersDW A Tradi ng Summary for SubscribersDW A Tradi ng Summary for Subscribers

MarketScreen.comMarketScreen.comMarketScreen.comMarketScreen.comMarketScreen.comThe MarketScreen Web si te

(ww w.m arketscreen.com), as its nam e

implies, is focused on p roviding stock

screening and mar ket alerts. In a simi-

lar fashion to StockCharts.com, the

MarketScreen site offers point and fig-

ure charting and market scans both for

free and on a subscription basis.

From a charting standpoint, the

MarketScreen Web site allows users to

specify both the box size and reversal

amount. Unfortunately, users do not

have the ability to specify a custom

time frame for a chartseveral choices

for predefined durations go back as far

as five years. Users can sp ecify whether

they want to use daily, weekly, or

monthly data. Those with subscrip-

tions to the site, which cost $49.95 a

month or $439.95 a year, can savecharts for futur e viewing.

This site also uses high/ low pr ices

to create its point and figure charts.

However, comparing the Moodys

poin t and f igure char t f rom

MarketScreen in Figure 6 to that of

StockCharts.com in Figure 3 and the

point and figure chart created man u-

ally in Figur e 1, you can see that they

all differ slightly, irrespective of the dif-

fering tim e frames. While they all use

high/ low prices, there is obviously

room for interpretation w hen creating

such charts. Keep th is in m ind w hen

viewing different point and figure

charts for the same security.

The Mar ketScreen site also offers lit

erally hundreds of market scans o

screens covering such areas as price

and volume activity, moving averages

chart patterns, sup port and resistanclevels, technical indicators, and fun

damental factors. The site prov ides fre

access to scan results based upon end

of-day da ta from three, four, five, and

six trad ing days prior. A subscription

is required to access intraday result

as well as end-of-day resu lts for each

of the last three trading d ays. There are

over 30 point an d figure p attern scan

available, with the resu lts of each bro

ken dow n by exchangeNasdaq, New

York, and Americanas well as by

market capmicro, small, mid, and

large.

The lists of passing companies pro

vide links to charts, quotes, news items

and SEC filings for each company. Sub

scribers can also create and save thei

own scans (Figure 7) and view the re

sults on both an intraday and end-of

day basis.

Figure 7.Figure 7.Figure 7.Figure 7.Figure 7.Saving Scans in MarketScreen.comSaving Scans in MarketScreen.comSaving Scans in MarketScreen.comSaving Scans in MarketScreen.comSaving Scans in MarketScreen.com


7/7

2July/August 2003

Dorsey W right & Associa tesDorsey W right & Associa tesDorsey W right & Associa tesDorsey W right & Associa tesDorsey W right & Associa tesFor many years, the Dorsey Wright &

Associates (DWA) Web si te

(www.dorseywright.com) was the only

site offering point and figure charts,

and it continu es to be the sole site de-

voted exclusively to the discipline of

point and figure. The companysfounder, Thomas Dorsey, is often cred-

ited with bringing point and figure

charting back from the brink of obscu-

rity and is the author of Point and

Figu re Char ting: The Essential App li-

cation for Forecasting and Tracking

Market Prices (second edition, John

Wiley & Sons, 2001), a must-read for

those interested in point and figure

charting.

The site is primarily fee-based, w ith

individu al subscriptions ranging from

$25 to $45 a m onth . A free three-weektrial is also available.

Upon entering the site, subscribers

are presented with a summ ary of the

last completed trading dayincluding

the point and figure chart activity of

key market ind exes and sectors, as well

as a calendar of recent and pending

economic releases (Figure 8). If you

have created any portfolios, you can

access them from th is page as well.

The DWA site offers some basic

screening capabilities. The on-line

query allows users to choose from anu mber of criteriainclud ing relative

strength, percent oversold/ overbought,

market capand view those stocks

and mu tual fun ds that m atch their cri-

teria. These qu eries can th en be saved

for future u se. With the sites pattern

repor ts, you can view those securities

forming both bullish and bearish point

and figure p atterns.

For point and figure charting, the site

uses the high/ low price and allows

users to specify the box size and rever-

sal amou nt (Figure 9). Users can also

specify the num ber of years they w ant

Figure 9.Figure 9.Figure 9.Figure 9.Figure 9.DW A Point and Figure ChartDW A Point and Figure ChartDW A Point and Figure ChartDW A Point and Figure ChartDW A Point and Figure Chart

charted , with data going back to 1986

wh en available.

Beyond the point and figure chart,

the site provides information regard -

ing weekly mom entum, sector status,

and the latest chart pattern. Once you

have created a chart, you can export a

PDF document to print or save to yourcomputer. Users can also create and

save notations for the char ts they cre-

ate as w ell as set action price alerts. If

the action pr ice you specify is between

the high and low price for the day, you

will receive a notification via E-mail.

Each stock tracked by the DWA d a-

tabase has a daily commentary report

as well as an evaluation that rates the

technical attributes of the stock.

The sites Point & Figur e Un iversity

is free to all registered u sers and cur-

rently offers six lessons ran ging from

the basics of point and figu re charting

to its use in market and sector timing

At the end of each lesson there is a tes

that allows you to d etermine your ar

eas of weakness. The site details plan

to launch live on-line classes in the

futur e, although no timetable is given

ConclusionConclusionConclusionConclusionConclusionPoint and figure charts give inves

tors a unique p erspective when view

ing p rice activity. By eliminating time

from the equation and focusing only

on significant p rice movements, they

allow investors to focus on the interac

tion between the sup ply and d emand

of a given securitythe d riving forc

behind secur ity prices.

Wayne A. Thorp, CFA, is associate ed

tor of Computerized Investing and

AAIIs financial analyst.

feature point and figure charting

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