Description
The Definitive Guide to Point and Figure: A Comprehensive Guide to the Theory and Practical Use of the Point and Figure Charting Method
Point and Figure charts are one of the great secrets of the Technical Analysis world. Highly sophisticated and with a thoroughbred pedigree, they can, however, be overlooked by traders today. Jeremy du Plessis – one of the foremost Point and Figure experts in the world – returns with a fully updated second edition of this definitive guide in an effort to redress this imbalance.
Introduction:
This Book, The Definitive Guide to Point and Figure, with an extensive revision to the text and introduction of brand new techniques, demystifies the world of Point and Figure charting. It includes a detailed explanation of the history and development of the technique from its invention to the modern day, and covers the makeup of the chart patterns, why they are created, and how to interpret them.
Chapter 1 explains the history and development of Point and Figure charts and how they came to get their name. It is essential that you read this chapter as it sets the scene and explains why Point and Figure charts look the way they do, and helps you understand more about them.
Chapter 2 follows on directly from Chapter 1 and starts by explaining the characteristics that describe a Point and Figure chart. It then explains in detail how to construct one.
Chapter 3 is about understanding Point and Figure charts and the patterns associated with them. Instead of listing dozens of theoretical patterns, you are encouraged to understand how the patterns develop and what happens when they do.
Chapter 4 covers the use of trend lines on Point and Figure charts which is different from other types of charts. It deals with subjective trend lines as well as a special Point and Figure version, which is drawn objectively.
Chapter 5 covers one of the unique features of Point and Figure charts; the ability to project price targets using both the vertical and horizontal count methods. A full explanation of the calculations, as well as where and how to apply the counts, is given. Once again, different construction methods result in different ways of calculating the targets.
Chapter 6 takes you through the thought process required to draw a Point and Figure chart. It explains the implications of changing the construction parameters and then how to choose them.
Chapter 7 describes the benefits of drawing Point and Figure charts of indicators – calculated lines – such as relative strength, on-balance volume and oscillators. It explains that Point and Figure is simply a method of charting data and it should be used for drawing charts other than just price charts.
Chapter 8 discusses the case for and against optimisation, how Point and Figure parameters may be optimised and what the benefits or disadvantages are of doing so. A number of examples of optimised parameters are given and it is shown how these can be used to assist analysis.
Chapter 9 covers Point and Figure’s contribution to Market Breadth, firstly with the wellknown Bullish Percent indicator, and then introduces two other breadth indicators based on Point and Figure, Bullish Trend Percent and X-Column Percent.
Chapter 10 covers advanced Point and Figure techniques such as the use of moving averages, Parabolic SAR and Bollinger Bands on Point and Figure charts. It explains how using these techniques can enhance the readability of the charts. Finally it covers the use of horizontal histograms which show price and volume activity.
Chapter 11 is the answer to the complaint so often levelled at authors that there are not enough real-life examples in their books. Chapter 11 contains a number of chart examples from a number of markets with a brief explanation of each to help you understand how to approach a Point and Figure chart.
Chapter 12 explains how you can use the power of objective Point and Figure signals and trends to scan universes of stocks to find those giving buy signals or sell signals and therefore dividing your universe into bullish and bearish. It explains how Point and Figure of relative strength can be used to enhance the signals.
Contents:
- Introduction to Point and Figure Charts
- Characteristics and Construction
- Understanding Patterns and Signals
- Understanding and Using Trend Lines
- Projecting Price Targets
- Analysing Point and Figure Charts
- Point and Figure Charts of Indicators
- Optimisation of Point and Figure Charts
- Point and Figure’s Contribution to Market Breadth
- Advanced Point and Figure Techniques
- Chart Examples
- Dividing your Stocks into Bullish and Bearish
