Recently I have seen a video explanation on Point and Figure Charting and I am going to discuss about Why P&F Rocks. My post can be helpful for those who are painfully lacking in just how cool P&F actually is. If you haven’t checked out P&F before I’ll provide a short summary. P&F is one type of chart that give you an idea about Supply and Demand (or Support/Resistance if you prefer) by eliminating time from the x-axis, as a substitute of drawing a new bar only when an important price turnaround occurs.
You can consider it as a type of renko chart where the similar colored bars are ‘stacked’ on each other and the reversal is typically more than one bar. My purpose is to give you a basic exactly how to draw a P&F chart. The P&F text out there uses P&F charting as a breakout approach, and there is a lot of books that explain this and the dozens of chart patterns that indicate buys and sells.
It will help you to get the safest places to enter a trade, which happen to match with the most risk-free entries.