THE HAndbook oF TEcHnIcAl AnAlysIsThe most common form of plotting a Point‐and‐Figure chart is via a fixed‐unit
move in price. But as we will see later, plotting Point‐and‐Figure charts using a
fixed‐unit move in volatility may be advantageous in certain respects.
portraying up moves and down moves: plotting the
Xs and Os
In Point‐and‐Figure charting, each unit move is referred to as a box and the amount
of each fixed‐unit move is the box size. Each new rising box is denoted by an X,
whereas each new declining box is denoted by an O. Hence, a continuous rise in
price or uptrend is represented by a column of rising Xs and a continuous decline
in price or downtrend is represented by a column of falling Os. See Figure 15.2.
box and box sizes: the minimum Condition for an advance
For a new box to be plotted, price must traverse the minimum fixed amount in
price, volatility, or percentage. If price fails to traverse the required minimum fixed
amount, no new box is plotted on the charts. The box size therefore represents the
minimum fixed amount per unit move. For example, if the current stock price is $10
and the box size is set to $2, then a new box may only be plotted once price moves
up to $12, or higher. An upside move to $11.99 is not sufficient for a new box to
be plotted. A move up from $10 to $13.99 only allows a single box to be plotted.
Figure 15.2 Rising Xs and Declining Os on a Point‐and‐Figure Chart.
Courtesy of Stockcharts.com