Point and figure chart

A point and figure chart is used for technical analysis of securities. Unlike most other investment charts, point and figure charts do not present a linear representation of time. Instead, they show trends in price.The aim of point and figure charting is to filter out the "noise" (unimportant price movement) and focus on the main direction of the price trend.Point and figure charts are usually used for longer term price movements. Having said that they can be used to day trade by clearly identifying the key points of supply and demand. They are very effective at keeping you on the right side of the market. Point and figure charts can do a really good job to spot very good trading opportunities on a trade and trend market. Point and figure charts are close relatives to three line break, renko and kagi charts which all do not have a fixed timeframe. This makes you trade only the important moves of the market, minor moves are discarded because of the limited gain potential. If you want more information about Japanese reversal charts have a look at the website of MarketTide.com
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A price-only chart that takes into account only whole integer changes in price, i.e., a 2-point change. Point and figure charting disregards the element of time and is solely used to record changes in price.

A graphic representation of price movement using vertical rows of "x"s to indicate significant up ticks and "o"s to reflect down ticks. Such charts do not reveal minute price fluctuations, only trends once they have established themselves.