Point and Figure Chart
A point and figure (P&F) chart is a method of charting price movements that uses columns of X symbols (rising prices) and O symbols (declining prices) to record only significant price changes that meet a defined box size, filtering out minor fluctuations and ignoring time entirely. It is one of the oldest methods of charting price history used in U.S. financial markets.
Point and figure charting dates to the late 19th century, when it was used by U.S. market operators to track price movements in a concise and noise-filtered format before electronic data was available. Unlike bar charts or candlestick charts, which plot a data point for every time period (day, hour, minute), a point and figure chart advances only when price moves by at least a specified amount — the box size — in a given direction. If price is rising, an X is added to the current column; if it reverses by a specified reversal threshold (typically three boxes), a new column of O symbols begins moving in the opposite direction. Time plays no role in the chart's construction.
The filtering property of point and figure charts was historically valued for its ability to strip away the noise of minor intraday and day-to-day price fluctuations and present the larger structure of price movement in a concentrated format. Technical analysts have studied point and figure chart formations in the historical record of U.S. equities, describing specific column patterns and formations that recurred across different securities and time periods. These historical descriptions — including patterns such as double tops, triple bottoms, and catapult formations — are part of the documented technical analysis literature compiled by analysts including A.W. Cohen and Thomas Dorsey.
One distinctive feature of point and figure analysis is the concept of price counts — a method of estimating potential price magnitude from historical consolidation patterns based on the width of a formation multiplied by the box size. These count methods were developed by practitioners observing historical patterns in U.S. equity charts over many decades. As with all technical analysis projections, price counts are historical observations about the proportions of past moves, not reliable predictions of future price targets.
Point and figure charts are less commonly displayed in mainstream retail trading platforms than bar or candlestick charts, but remain available on specialized technical analysis platforms and are covered in depth by the CMT Association's educational curriculum. They represent one of the most historically grounded approaches to visualizing price structure, with a continuous lineage in U.S. equity market analysis spanning more than 125 years.
The box size and reversal amount selection in point and figure charting directly determines the level of noise filtered out and the sensitivity of the resulting chart. A small box size relative to the stock's typical daily range will produce a densely detailed chart recording many small reversals, while a larger box size will condense the same price history into fewer, broader formations. Practitioners selecting parameters for U.S. equity point and figure analysis typically calibrate the box size to a percentage of the stock's price or to its historical average true range, seeking a balance between detail and clarity that is appropriate for their analytical time horizon.