Point and Figure Chart
A Point and Figure (P&F) Chart is a price-only charting method that records upward price movements as columns of X marks and downward movements as columns of O marks, using a fixed box size and reversal amount, with no time axis, to filter noise and highlight pure price trends.
Point and Figure charting originated in the nineteenth century among traders who tracked price in physical notebooks, placing X marks for each upward price movement and O marks for downward movements. The method predates candlestick charting's introduction to Western markets and remains valued for its ability to eliminate the distortion of time from price analysis.
Two parameters define every P&F chart: the box size and the reversal amount. The box size is the minimum price increment that qualifies for a new mark. A box size of 10 points on Nifty 50 means a price move must cover at least 10 full points before it is recorded. The reversal amount is expressed as a multiple of the box size — most commonly three boxes. A three-box reversal means the chart switches from an X column to an O column only when price moves at least 30 Nifty points in the opposite direction from the most recent box added.
This two-parameter filter eliminates market noise below the reversal threshold and concentrates the chart on significant price swings. A minor intraday oscillation of 15 points in both directions would produce no marks on a 10-point, three-box P&F chart — precisely the filtering effect practitioners seek.
Pattern recognition on P&F charts uses formations directly analogous to bar and candlestick patterns but expressed in columns. A simple Double Top Buy signal occurs when a new X column rises above the high of the previous X column. A Double Bottom Sell signal occurs when an O column falls below the low of the previous O column. More complex patterns — Spread Triple Tops, Bearish Signal Reversal, Low Pole — carry progressively higher implied reliability according to P&F technicians.
P&F price targets are calculated using the Vertical Count method or the Horizontal Count method. Vertical Count takes the number of X marks in a column and multiplies by the box size and the reversal amount to project a price target from the base. Horizontal Count uses the width of a base formation multiplied by the box size and reversal amount.
On NSE-listed stocks, P&F charts are popular among longer-term swing traders and investors who prefer to identify structural trend changes without being distracted by daily volatility. Standard settings for large-cap Nifty 50 stocks use 0.25 percent of price as the box size with a three-box reversal, which adapts as the absolute price level changes.