point and figure (P&F) chart

Pictorial device used almost exclusively for showing changes in the prices of bonds, commodities, stocks, and such. It ignores time, and focuses only on changes: if the price does not change (increase or decrease) it does not record anything, no matter how long the no-change period lasts. P&F charts are drawn on a graph paper where each square (called 'box') represents a unit of price, say 5 cents. The vertical axis shows the price scale, the horizontal axis has no scale when the chart is being filled in but days or months are marked as required after the completion. To begin, the square corresponding to the current price (as measured on the vertical scale) of the item is marked off in the left-most column. Every time the price increases by the unit (called 'box size'), a symbol (typically the letter 'X') is placed in the appropriate box. If the price keeps on rising, one box is placed on top of the previous one for each box size increase. For price decreases another symbol (typically the letter 'O') is employed and a new column is started, and for each unit fall in price a new 'O' is added below the previous one. Every time the price movement reverses, a new column is started and the process continues.