"Point And Figure" Trading Explained For Beginners (Supply And Demand Trading Course) | Summary and Q&A

TL;DR

Point and Figure charts are a useful tool for day trading, scalping, and swing trading, providing a visual representation of supply and demand in the market.

Key Insights

• 📈 Point and Figure charts provide a visual representation of supply and demand, helping traders identify trends and trend reversals.
• 🕴️ The box size and reversal amount can be customized to suit individual trading styles and market conditions.
• 💁 Support and resistance levels can be spotted on the chart, providing valuable information for trading decisions.
• 😥 Point and Figure charts offer a clear and organized way to filter out market "noise" and focus on long-term price movements.

Transcript

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Questions & Answers

Q: How do Point and Figure charts differ from candlestick charts?

While candlestick charts show price changes over time, Point and Figure charts focus solely on price movements, disregarding time intervals.

Q: How do Point and Figure charts represent supply and demand?

When demand exceeds supply, the chart shows a column of X's, indicating higher prices. Conversely, a column of O's represents more supply than demand and lower prices.

Q: How are the box size and reversal amount determined?

Traders can set the box size, which represents the minimum price change needed to continue a trend. The reversal amount is the number of boxes price must move for a new column to form.

Q: How can one use Point and Figure charts to find support and resistance levels?

Support levels are identified as horizontal rows of O's, indicating a level where demand overcomes supply. Resistance levels, on the other hand, are marked by horizontal rows of X's, suggesting supply overpowering demand.

Summary & Key Takeaways

• Point and Figure charts are a different way of representing price changes, focusing on supply and demand rather than time.

• The chart consists of columns of X's (uptrend) and O's (downtrend) and helps identify trends and trend reversals.

• The box size and reversal amount are customizable inputs that determine the size and movement required for each X or O.