how to calculate point and figure p f charts
point and figure charts don t require calculation but they do require at least two variables to be set one variable is the box size the box size can be a specific dollar amount such as 1 a percentage such as 3 of the current price or it can be based on average true range atr which means the box size will fluctuate based on volatility the reversal amount also needs to be set the reversal amount is typically three times the box size for example if the box size is 1 the reversal amount is 3 the reversal can be set at anything the trader desires such as one times the box size or 5 5 times the box size an optional variable is whether to use high and low prices for the underlying asset or to use closing prices using high and low prices will mean the creation of more x s and o s while using only closing prices less movement being calculated compared to high and lows will mean fewer x s and o s are created 