Point and Figure charts are made up of a series of X's and O's that represent the price movements over time.
• The X represents an increase in price
• The O represents a decline in price.
• Look at the box size. The boxes contains a stack of either X's or O's, but seldom both. You can change the scale of charts by the specified box size. The smaller the box, the smaller the time interval. The larger the box, the larger the time interval which it represents.
• View the reversal amounts. A stack of X's represent an upward trend. A stack of O's represent a downward trend. It’s important to note that a new stack forms when Forex rates reverse.
Using Forex charts to learn more about the market is an important part of any Forex trading strategy. Learn to use the software you plan to trade with, and practice plotting charts to understand the trends in Forex rates. Be sure to read up on other essential Forex strategies as well.
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