Point And Figure Charting In Forex

Just some thoughts on point & figure (p&f) charting in the forex market. Some may characterize point & figure charting as trading based upon pure price action. This is because only price, which is undeniably the most important aspect of technical analysis, is customarily included on this type of chart (in the form of X’s and O’s). Other data that can readily be found on bar and candlestick charts, like time and period opens/closes, are generally excluded on p&f charts. This leaves only the uncluttered purity of price action.

Trading from a p&f chart, like the historical EUR/USD chart shown here, generally involves a good amount of looking for breakouts. For example, whereas double and triple tops on bar charts are usually thought of as reversal patterns, they are considered breakout patterns on p&f charts.

There are some intricacies to learning how to use point & figure, but they offer a whole new technical viewpoint to the typical foreign exchange trader.

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