InvestorQ : How do I use the Point and figure charts (PFC) for technical analysis and what are its unique features?
Aditi Sharma made post

How do I use the Point and figure charts (PFC) for technical analysis and what are its unique features?

Answer
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Ria Jain answered.
1 year ago


Point and Figure charts (PFC) used to be in vogue in the old days but people are gradually reducing their usage of these charts. Firstly, the chart is too complex to understand. It is more like an Advance / Declines chart with the difference being the chart is depicted after deciding upon a range of expected volatility. The chart uses X and O to decipher various points in the chart. For example, the number of times the stock rises by a certain percentage is represented by an X while the number of times the stock fell by a certain percentage is represented by an O. While the concept is quite elegant, it is quite difficult to put into practice. That is one of the reasons why this chart is not popularly used in practical technical analysis by the traders and analysts. There are many more types of such charts with a number of sub-categories of charts also available. Charts play an important role as they are an elegant and easy representation of data. It is much easier to see patterns in charts than in raw numbers. For a trader in the stock markets, these charts extremely basic to decision making in the markets.