Stockworm - Tour > Point and figure charting

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Point and figure charts

Point and Figure charts reduce complex price oscillations to a simple format which only displays significant price moves. This underlying algorithm is relatively simple, but the technique provides an extremely insightful view of the price movement.

In point and figure plots, price movements are plotted in columns of x's (increasing price) and o's (decreasing price). Each x represents a positive price movement which is the size of a price 'box' and each o represents a negative price movement of 1 box. To go from a column of x's to a column of o's, the price must decrease by a number of boxes known as the 'reverse' number (the converse is true for going from o's to x's).

Because point and figure charts do not explicitly display time on the x-axis (just columns which represent price movements), it is customary to replace x's or o's with a key for each month (1-9 for January-September, a-d for October-December) to help track the time.

Customizing point and figure charts

Point and figure charts can be easily customized through a user-friendly point and figure settings form. The table below summarizes the customizable features:

Date range

Charts are plotted over an arbitrary date range. You select the starting and ending dates and Stockworm will automatically update the chart to reflect your preferences. The starting date for point and figure charts is typically 'auto-selected' meaning that the starting date will be computed by the point and figure algorithm and thus will be dependent on the volatility of the stock price.

Size

You can magnify the width and height of the point and figure chart independently up to 400% of the default size, so that you can clearly see all of the details on your chart.

Box size computation

You can select between ranged boxes (the box size depends on the current price range), fixed size boxes, and percent boxes (the box size is a percent of the current price). You can further tweak the actual values used in computing each of these box sizes.

Box reversal

You can customize the number of boxes which it takes to reverse the current trend.

Saved views

Once you have point and figure settings that you would like to revisit later, you can always save these settings using a pulldown menu in the navigation component on the left hand side of the page.