Point & Figure

1-box reversal starts a new column with just one box of opposite movement (more sensitive, more columns). 3-box reversal requires 3 boxes of opposite movement (filters more noise, fewer columns). 3-box is standard and recommended for most traders.

Start with ATR-based box size (14-period ATR value) which automatically adapts to volatility. Alternatively, use traditional scaling (e.g., $0.50 for $20-40 stocks, $1.00 for $40-100). Test different sizes to find what works for your timeframe.

P&F removes time completely and only plots significant price movement. The X and O columns replace candlesticks, and only moves meeting the box size criteria appear. This creates a cleaner view of supply/demand.

Yes, P&F-based trading is suitable for TFSA accounts. The strategy typically involves longer holding periods (weeks to months), which is ideal for registered accounts.

Many charting platforms support P&F, including TradingView (free), ThinkorSwim, and StockCharts.com. Some brokers also offer P&F charting. You can even construct P&F manually with price data.

First targets from vertical or horizontal counts are fairly reliable (often reached 60-70% of the time in trending markets). Extended targets are less reliable. Always use stops - exit if a reversal signal occurs before target is reached.

Vertical count works better after a clear reversal from consolidation. Horizontal count works better for breakouts from extended consolidation patterns. Many traders calculate both and use the more conservative estimate.

Use P&F for: signal identification, S/R levels, price targets. Use candlestick charts for: actual entry prices, stop placement, volume analysis, gap checking. Keep both charts open when trading.

The Catapult confirms a breakout in three ways: 1) Initial triple top breakout shows demand, 2) Pullback that holds proves old resistance is now support, 3) New high shows momentum continues. This multi-confirmation makes it highly reliable.

For bullish support: start at a significant O column low, draw up at 45° (one box up for each column to the right). For bearish resistance: start at X column high, draw down at 45°. Use these as trend filters.

Scan for: recent breakouts (double/triple top in last 1-2 columns), trendline position (above bullish support), target potential (>10% to calculated target). Rank by pattern strength, relative strength, and volume. Most platforms require custom scripting.

RS P&F compares stock performance to an index. A stock giving a buy signal while RS is also positive (rising) indicates strength in a strong stock. This dual confirmation increases success rate. RS can also identify sector leadership.

Fulcrum is a defined consolidation with a U-shaped bottom and clear boundaries. Saucer is a gradual, extended rounding with no clear structure. Both suggest accumulation, but Fulcrum has clearer breakout points.

Use 1-box reversal instead of 3-box for more sensitivity. Use smaller box sizes (e.g., 0.25-0.5× ATR). Build P&F from intraday data (1-min or 5-min). Accept that signals will still lag compared to candlesticks.

Well-designed P&F systems (triple tops, catapults, trendline filters) typically achieve 50-60% win rates. Profitability comes from the price target methodology - winners often exceed targets while stops limit losers. Expect higher R-multiples than win rate alone suggests.