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All trading basics

The Point & Figure Chart

This type of chart is somewhat rare, in fact most charting services do not even offer the point and figure chart. This is a chart that plots day-to-day increases and declines in price. Increases are represented by a rising stack of X's while decreases are represented by a declining stack of O's. These types of charts were traditionally used for intraday charting (a stock chart for just one day), mainly because it can be long and tedious to create P&F charts over a longer period of time manually.

The idea behind P&F charts is that they help you to filter out less-significant price movements and let you focus more on the most important trends. Below is an example of a Point and Figure chart for AT&T (T):

This chart was supplied by Barchart.com

Now that we've taken a look at three different types of charts used by technical analysts, let's take a tour of various indicators.