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  • Table of Contents
    • Overview
      • Why Analyze Securities?
      • Technical Analysis
      • Fundamental Analysis
      • Random Walk vs. Non-Random Walk
      • Asset Allocation and Diversification
      • John Murphy's 10 Laws of Technical Trading
      • John Murphy's "Charting Made Easy" eBook
      • Technical Analysis 101
        • TA 101 – Part 1
        • TA 101 – Part 2
        • TA 101 – Part 3
        • TA 101 – Part 4
        • TA 101 – Part 5
        • TA 101 – Part 6
        • TA 101 – Part 7
        • TA 101 – Part 8
        • TA 101 – Part 9
        • TA 101 – Part 10
        • TA 101 – Part 11
        • TA 101 – Part 12
        • TA 101 – Part 13
        • TA 101 – Part 14
        • TA 101 – Part 15
        • TA 101 – Part 16
        • TA 101 – Part 17
      • Irrational Exuberance
      • Cognitive Biases
      • Arthur Hill on Goals, Style and Strategy
      • Arthur Hill on Moving Average Crossovers
      • Multicollinearity
      • "The Trader's Journal" by Gatis Roze
        • Stage 1: Money Management
        • Stage 2: Business of Investing
        • Stage 3: The Investor Self
        • Stage 4: Market Analysis
        • Stage 5: Routines
        • Stage 6: Stalking Your Trade
        • Stage 7: Buying
        • Stage 8: Monitoring Your Investments
        • Stage 9: Selling
        • Stage 10: Re-Examine, Refine, Re-Enhance
        • Additional Reading
      • Bob Farrell's 10 Rules
      • Richard Rhodes' Trading Rules
      • Donchian Trading Guidelines
      • Why and How To Use Correlation
    • Chart Analysis
      • What Are Charts?
      • Support & Resistance
      • Trend Lines
      • Gaps and Gap Analysis
      • Introduction to Chart Patterns
      • Chart Patterns
        • Broadening Top or Megaphone Top
        • Double Top Reversal
        • Double Bottom Reversal
        • Head and Shoulders Top
        • Head and Shoulders Bottom
        • Falling Wedge
        • Rising Wedge
        • Rounding Bottom
        • Triple Top Reversal
        • Triple Bottom Reversal
        • Bump and Run Reversal
        • Flag, Pennant
        • Symmetrical Triangle
        • Ascending Triangle
        • Descending Triangle
        • Rectangle
        • Price Channel
        • Measured Move—Bullish
        • Measured Move—Bearish
        • Cup With Handle
      • Chart Types
        • Arms CandleVolume
        • CandleVolume
        • Elder Impulse System
        • EquiVolume
        • Heikin-Ashi Candlesticks
        • Kagi Charts
        • Renko Charts
        • Three Line Break Charts
        • MarketCarpets
        • Relative Rotation Graphs (RRG Charts)
        • Seasonality Charts
        • Yield Curve
      • Candlestick Charts
        • Introduction to Candlesticks
        • Candlesticks and Traditional Chart Analysis
        • Candlesticks and Support
        • Candlesticks and Resistance
        • Candlestick Bullish Reversal Patterns
        • Candlestick Bearish Reversal Patterns
        • Candlestick Pattern Dictionary
      • Point and Figure Charts
        • Point and Figure Basics
          • Introduction to Point & Figure Charts
          • Point & Figure Scaling and Timeframes
          • P&F Trend Lines
        • Classic Patterns
          • P&F Bullish Breakouts
          • P&F Bearish Breakdowns
          • P&F Signal Reversed
          • P&F Catapults
          • P&F Triangles
          • P&F Bull & Bear Traps
        • P&F Price Objectives
          • P&F Price Objectives: Breakout and Reversal Method
          • P&F Price Objectives: Horizontal Counts
          • P&F Price Objectives: Vertical Counts
        • Point & Figure Indicators
        • P&F Scans and Alerts
          • P&F Pattern Alerts
      • Chart Annotation Tools
        • Andrews' Pitchfork
        • Stock Market Cycles
        • Fibonacci Retracements
        • Fibonacci Arcs
        • Fibonacci Fans
        • Fibonacci Time Zones
        • Quadrant Lines
        • Raff Regression Channel
        • Speed Resistance Lines
    • Technical Indicators & Overlays
      • Introduction to Technical Indicators and Oscillators
      • Technical Indicators
        • Accumulation/Distribution Line
        • Alligator Indicator
        • Aroon
        • Aroon Oscillator
        • ATR Bands
        • ATR Trailing Stops
        • Average Directional Index (ADX)
        • Average True Range (ATR) and Average True Range Percent (ATRP)
        • Balance of Power (BOP)
        • Bollinger BandWidth
        • %B Indicator
        • Chaikin Money Flow (CMF)
        • Chaikin Oscillator
        • Chande Trend Meter (CTM)
        • CMB Composite Index
        • Commodity Channel Index (CCI)
        • ConnorsRSI
        • Coppock Curve
        • Correlation Coefficient
        • DecisionPoint Price Momentum Oscillator (PMO)
        • Detrended Price Oscillator (DPO)
        • Distance From Highs
        • Distance From Lows
        • Distance To Highs
        • Distance To Lows
        • Distance From Moving Average
        • Ease of Movement (EMV)
        • Force Index
        • Gopalakrishnan Range Index
        • High Low Bands
        • High Minus Low
        • Highest High Value
        • Linear Regression R2
        • Lowest Low Value
        • Mass Index
        • MACD (Moving Average Convergence/Divergence) Oscillator
        • MACD-Histogram
        • MACD-V
        • MACD-V Histogram
        • Median Price
        • Money Flow Index (MFI)
        • Negative Volume Index (NVI)
        • On Balance Volume (OBV)
        • Percentage Price Oscillator (PPO)
        • Percentage Volume Oscillator (PVO)
        • Performance Spread
        • Price Relative/Relative Strength
        • Pring's Know Sure Thing (KST)
        • Pring's Special K
        • Rate of Change (ROC)
        • Relative Strength Index (RSI)
        • Relative Volume (RVOL)
        • RRG Relative Strength
        • StockCharts Technical Rank
        • Slope
        • Standard Deviation (Volatility)
        • Stochastic Oscillator (Fast, Slow, and Full)
        • StochRSI
        • Traffic Light
        • TRIX
        • True Range
        • True Strength Index
        • TTM Squeeze
        • Typical Price
        • Ulcer Index
        • Ultimate Oscillator
        • Vortex Indicator
        • Weighted Close
        • Williams %R
      • Technical Overlays
        • Anchored VWAP
        • Bollinger Bands
        • Chandelier Exit
        • Double Exponential Moving Average (DEMA)
        • Hull Moving Average (HMA)
        • Ichimoku Cloud
        • Kaufman's Adaptive Moving Average (KAMA)
        • Keltner Channels
        • Linear Regression Forecast
        • Linear Regression Intercept
        • Moving Averages—Simple and Exponential
        • Moving Average Ribbon
        • Moving Average Envelopes
        • Parabolic SAR
        • Pivot Points
        • Price Channels
        • Triple Exponential Moving Average (TEMA)
        • Volume-by-Price
        • Volume-Weighted Average Price (VWAP)
        • ZigZag
    • Market Indicators
      • Introduction to Market Indicators
        • Market Indicator Dictionary
      • Advance-Decline Line
      • Advance-Decline Percent
      • Advance-Decline Volume Line
      • Advance-Decline Volume Percent
      • Arms Index (TRIN)
      • Bullish Percent Index (BPI)
      • DecisionPoint Intermediate-Term Breadth Momentum Oscillator (ITBM)
      • DecisionPoint Intermediate-Term Volume Momentum Oscillator (ITVM)
      • DecisionPoint Swenlin Trading Oscillator (STO)
      • High-Low Index
      • High-Low Percent
      • McClellan Oscillator
      • McClellan Summation Index
      • Net New 52-Week Highs
      • Percent Above Moving Average
      • Pring's Bottom Fisher
      • Pring's Diffusion Indicators
      • Pring's Inflation and Deflation Indexes
      • Pring's Net New High Indicators
      • Put/Call Ratio
      • Record High Percent
      • Volatility Indices
    • Market Analysis
      • Dow Theory
      • Sector Rotation Analysis
      • Intermarket Analysis
      • The DecisionPoint Chart Gallery
      • DecisionPoint Rydex Asset Analysis
      • Wyckoff Analysis Articles
        • Wyckoff Market Analysis
        • Wyckoff Stock Analysis
        • The Wyckoff Method: A Tutorial
      • Elliott Wave Analysis Articles
        • Introduction to Elliott Wave Theory
        • Identifying Elliott Wave Patterns
        • Guidelines for Applying Elliott Wave Theory
    • Trading Strategies & Models
      • DecisionPoint Trend Model
      • Trading Strategies
        • Bollinger Band Squeeze
        • CCI Correction
        • CVR3 VIX Market Timing
        • Faber's Sector Rotation Trading Strategy
        • Gap Trading Strategies
        • Harmonic Patterns
        • Hindenburg Omen
        • Ichimoku Cloud Trading Strategies
        • The 'Last' Stochastic Technique
        • MACD Zero-Line Crosses With Swing Points
        • Moving Average Trading Strategies
          • Finding Support and Resistance in Moving Averages
          • Guppy Multiple Moving Average: An MA Ribbon Designed to Tip the Market’s Hand
          • How To Trade Price-to-Moving Average Crossovers
          • Trading the Bounce: Finding Support and Resistance in Moving Averages
          • Trading the Death Cross
          • Trading Using the Golden Cross
          • Using the 5-8-13 EMA Crossover for Short-Term Trades
        • Moving Momentum
        • Narrow Range Day NR7
        • Percent Above 50-day SMA
        • Percent B Money Flow
        • The Pre-Holiday Effect
        • RSI(2)
        • Six-Month Cycle MACD
        • Slope Performance Trend
        • Stochastic Pop and Drop
        • Swing Charting
        • Trend Quantification and Asset Allocation
    • Index & Market Indicator Catalog
      • Advance-Decline Indicators
      • Cboe Indices and Indicators
      • CME Futures and Spot Prices
      • DecisionPoint Sentiment Indicators
      • Dow Jones Breadth Indicators
      • Dow Jones Global Indices
      • Dow Jones Select Indices
      • Dow Jones Titans Indices
      • Dow Jones US Indices
      • Economic Indicators
      • ICE Futures and Spot Prices
      • Intellidex Indices
      • MSCI Indices
      • New 52-week Highs and Lows for Exchanges
      • NYSE Arca Equity Indices
      • NYSE Equity Indices
      • Philadelphia Indices
      • S&P 500 Sector and Industry Groups
      • S&P GSCI Indices
      • StockCharts AD Percent
      • StockCharts AD Volume Percent
      • StockCharts Bullish Percent Index
      • StockCharts High-Low Index
      • StockCharts High-Low Percent
      • StockCharts Percent Above Moving Average
      • StockCharts Pseudo Symbols
      • StockCharts Record High Percent
      • StockCharts Theoretical Indices
      • US Treasury Yields
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On this page
  • Moving Averages
  • Bollinger Bands
  • Volume-by-Price
  • The Takeaway
  • Further Study

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  1. Table of Contents
  2. Chart Analysis
  3. Point and Figure Charts

Point & Figure Indicators

PreviousP&F Price Objectives: Vertical CountsNextP&F Scans and Alerts

Last updated 10 months ago

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Chartists can apply , , and to Point & Figure (P&F) charts. While the formulas remain unchanged, indicators on P&F charts are calculated slightly differently than those on bar charts. Instead of daily or weekly closing prices as the database, P&F charts use the average price of each column. Despite this difference, these indicators can be used like on bar charts.

Moving Averages

Moving averages on P&F charts are based on the average price of each column. In contrast, bar chart moving averages are based on each period's close. A 10-day simple moving average (SMA) on a bar chart would be the average of the last 10 closing prices. On a P&F chart, a 10-period SMA would be the average price of the last 10 column averages.

A one-period SMA provides an easy example for starters. If an X-Column extends from 43 to 50, the one-period SMA would be 46.5 {(43 + 50)/2 = 46.5}.

The chart below shows Agilent with eight Xs extending from 43 to 50 in the most recent X-column. The blue one-day SMA is in the middle of that column (between the 4th X and the 5th X).

A five-period SMA on a P&F chart would be the average for the last five columns. The chart below shows Agilent with a 1-period SMA (blue) and a 5-period SMA (red). Just like bar chart moving averages, these two moving averages lag price. The longer the moving average is, the bigger the lag.

Double smoothing means shorter moving averages can be used. Taking the average of the column smooths the price once. A moving average greater than two periods smooths the price a second time. With P&F charts, a five-period SMA is a five-period SMA of a one-period SMA. This double smoothing means chartists can use shorter moving averages with P&F charts. A five-day SMA on a P&F chart may produce signals similar to a 50-day SMA on a bar chart.

There are at least three possible moving average signals.

  1. Identify the direction of the moving average. A rising moving average is bullish, and a falling moving average is bearish.

Bollinger Bands

Bollinger Bands are standard deviation bands placed above and below a moving average. Bollinger Bands (20,2) is based on the default setting—20 periods to calculate the moving average and 2 for the standard deviation. The upper band is placed two standard deviations above the moving average, and the lower band is two standard deviations below the moving average. Because P&F moving averages are double-smoothed, you may need to shorten the moving average period to five or 10. It depends on the price characteristics of the underlying security. Some trial and error may be required to find the right fit.

Bollinger Band analysis and signals are the same for P&F and bar charts. There are three basic signals. Narrowing bands indicate a consolidation that can lead to a breakout—up or down. As with bar charts, this narrowing does not provide a direction clue. Look for the next P&F signal to establish direction.

Bollinger Bands provide a natural filter for moving average breaks. Since price moves above and below moving averages frequently on P&F charts, Bollinger Bands can be used to filter these signals.

Volume-by-Price

Volume-by-Price shows the amount of volume for a particular price range. This is perfect for P&F charts because each box represents a specific price range. Volume-by-Price bars are shown horizontally on the left side of the chart to match the specific price range. This volume is subdivided into positive and negative volumes. Volume is positive (green) when price moves higher within the range. Volume is negative when price moves lower within the range.

Volume-by-Price can be used to identify support or resistance zones. Long Volume-by-Price bars at or above current prices can be viewed as a potential resistance zone.

Conversely, long Volume-by-Price bars at or below current prices can be considered a potential support zone.

The Takeaway

Even though the basic calculations are the same, indicators based on P&F charts are slightly different than their bar chart cousins. It may take some time to understand and understand how these indicators react to price movements in P&F charts. However, the time spent understanding them could pay off as P&F charts give a different perspective of price action.

As with all indicators, it's important to confirm indicator signals with P&F signals. For example, a bullish moving average crossover should be confirmed with a P&F breakout, such as a double or triple top breakout.

Further Study

Look for . A move above the moving average is bullish, while a move below it is bearish.

Use two moving averages to generate signals. A bull signal is triggered when the shorter moving average crosses above the longer moving average. A bear signal triggers when the shorter moving average crosses below the longer moving average. You can read more on moving averages in our

A five-period moving average with Bollinger Bands set two standard deviations above and below provides an extra price hurdle. A move above the upper band shows strength, indicative of an uptrend. Conversely, a move below the lower band shows weakness and is more indicative of a downtrend. Bollinger refers to this as “walking the bands.” You can read more on Bollinger Bands in our

You can read more about volume-by-price in our

Thomas Dorsey's examines the basic ideas and key patterns of P&F charts. Dorsey keeps his analysis straightforward; as a relative strength disciple, he devotes a complete chapter to relative strength concepts using P&F charts. These concepts are tied in with market indicators and sector rotation tools to provide investors with all they need to construct a portfolio. Additionally, Dorsey incorporates lessons on how to use P&F charts with ETFs.

price to cross the moving average
detailed ChartSchool article.
detailed ChartSchool article.
detailed ChartSchool article.
Point & Figure Charting
moving averages
Bollinger Bands
Volume-by-Price
A one-period moving average is overlaid on a P&F chart.
A P&F chart with a one-period and five-period simple moving average overlay.
Moving average crossovers in a P&F chart.
P&F charts showing narrowing Bollinger Bands before a breakout.
Example of P&F chart with a move above the upper band (walking up the upper band), which indicates a strong uptrend.
Volume-by-Price bars on a P&F chart showing potential resistance level.
Volume-by-Price bars on a P&F chart showing potential support level.
P&F chart from StockCharts.com with a one-period moving average overlay
P&F chart from StockChart.com with a one-period and five-period moving average overlay
P&F chart from StockCharts.com showing moving average crossovers
P&F chart from StockCharts.com showing narrowing Bollinger Bands before a breakout
P&F chart with an example of prices walking up the upper band indicating a strong uptrend
P&F chart from StockCharts.com with Volume-by-Price overlay identifying a resistance level
P&F chart from StockCharts.com showing a potential support level