Technical Analysis Explained: Point and Figure Charting

When futures traders think of charts, candlesticks and bar charts typically come to mind. But there’s another time-tested charting method that offers a unique perspective on price action: point and figure charting. With origins dating back over a century, this approach doesn’t rely on time intervals but instead on price movements, which can help you see market trends in a new way. 

Let’s explore what point and figure charting is, how it’s constructed, and how it can help you identify trends, breakouts, and possible trade signals in your futures trading strategy. 

What is point and figure charting? 

Point and figure charting is a form of technical analysis that plots price movements without considering the time of those movements. Unlike candlestick or bar charts—which are structured by time intervals (e.g., each bar represents one day or one minute)—point and figure charts only update when the price changes by a specific amount, known as the “box size.” 

Each column on a point and figure chart is made up of either X’s (representing upward movement) or O’s (representing downward movement). When price moves against the trend by a predefined amount, known as the “reversal amount,” a new column begins. This structure highlights price trends and filters out minor fluctuations, allowing futures traders to focus on broader market moves. 

How point and figure charts are built 

To build a point and figure chart, two key settings are required: 

• Box size: This is the amount of price movement needed to add an X or O; for example, a $1 box size means each X or O represents a $1 price change. 
• Reversal amount: This is the number of boxes required to reverse the current trend and begin a new column; a common setting is three boxes. 

Let’s say crude oil is trading at $78. If price rises to $79, you add another X to the existing column of Xs. If price does not rise by $1 or more, you cannot add an X; but if price then drops $3 (three box sizes of $1), you begin a new column of Os. 

This method allows you to filter out “noise” and spot significant price moves more clearly than traditional charts might show. 

Why futures traders use point and figure charts 

Point and figure charting can be help you identify: 

• Trends: Clear columns of Xs or Os make it easier to recognize uptrends and downtrends. Learn how to identify trends in futures markets. 
• Support and resistance levels: Repeated price rejections can form horizontal patterns, like double or triple tops and bottoms. Learn to identify support and resistance levels.
• Breakouts and reversals: When price breaks above or below these patterns, it can signal a potential change in direction. Learn how to identify market reversals. 
• Measured price objectives: Traders can estimate potential targets based on the size of patterns before a breakout. 

For example, if you observe a triple bottom breakdown on a crude oil chart, that support level might give way to a larger downward move. Futures traders sometimes use the number of columns or boxes involved in a pattern to estimate how far the price could travel after a breakout. 

Customizing your view in NinjaTrader 

In the NinjaTrader platform, you can set up a point and figure chart by adjusting a few simple parameters: 

• Open a standard chart for your chosen futures market. 
• Change the chart style to “PointAndFigure.” 
• Set your preferred box size (e.g., 100 ticks for a $1 move). 
• Choose your reversal amount (commonly three boxes). 
• Load the desired amount of historical data. 

You can also customize the appearance to make trends easier to read—e.g., using green Xs for bullish trends and red Os for bearish ones. 

Point and figure charts can be applied to different time horizons by adjusting the box size and data range. For longer-term trend analysis, larger box sizes can be used, while smaller sizes allow for intraday perspectives. 

Using point and figure patterns in your futures trading strategy 

With point and figure patterns, there are several common patterns traders watch for: 

• Double top/bottom: This occurs when price tests a level twice and then breaks through, potentially indicating continuation. 
• Triple top/bottom: This is a more significant version of the double pattern, where a third test increases the breakout potential. 
• Catapult pattern: This is a breakout followed by a pullback and then a second breakout; it can be seen as a strong confirmation of trend continuation. 

These patterns are based purely on price behavior—no time component is involved—which can help you remove emotional decision-making and focus your trading plan on actionable levels. 

How this charting style fits in your trading toolkit 

Point and figure charting isn’t meant to replace other methods. Instead, it can serve as a complementary tool in your futures trading analysis toolkit. Whether you're swing trading Micro contracts or evaluating intraday setups, point and figure charting can provide a different lens for assessing trend strength, support/resistance levels, and breakout potential. 

If you’re looking to reduce chart clutter and stay focused on meaningful moves, this approach can offer you a simplified yet powerful perspective. 

Enhance Your Technical Analysis With Point and Figure Charts 

Point and figure charting may have old-school origins, but it still holds relevance in today’s fast-paced futures markets. Whether you're analyzing longer-term trends in crude oil or spotting intraday breakout setups, this charting style can help you stay focused on the moves that matter.