Before we understand the Points and Line chart, it is essential to under the Point and Figure charts (PFC), which forms the basis for the point and line charts. PFC is very effective in filtering out the noise of a chart. Giving more emphasis on price, these types of charts don’t take into account the time factor or the volume factor. Point and Figure charts consist of a series of only Xs and Os. While the Xs represent rising prices, Os represent declining prices. Only when a stock moves by a certain point, a new X or a new O is added to the series.

Points and Line Chart is an improved version of the PFC. The point and line chart is a much simpler price chart that only uses points and a line. The point and line chart has the merit of maximizing the benefits of the point and figure chart using its filtration criteria but will have the line chart advantages including smoothed trend display, the use of closing price, price patterns, and trend lines. Unlike PFC, which only considers price shifts, the price and line charts also consider volumes, time (or the number of days), supports & resistances, moving averages, and oscillators.