Point and Figure charts are one of the great secrets of the Technical Analysis world. Highly sophisticated and with a thoroughbred pedigree, they can, however, be overlooked by traders today. Jeremy du Plessis - one of the foremost Point and Figure experts in the world - returns with a fully updated second edition of this definitive guide in an effort to redress this imbalance.This second edition, with an extensive revision to the text and introduction of brand new techniques, demystifies the world of Point and Figure charting. It includes a detailed explanation of the history and development of the technique from its invention to the modern day, and covers the makeup of the chart patterns, why they are created, and how to interpret them.Throughout, readers are encouraged to understand Point and Figure charts from first principles, rather than just remember the names of a series of patterns. It is the first major work for 50 years to discuss in depth the original 1-box reversal method of Point and Figure charting and contrast it with the more popular 3-box reversal method. Further, the explanation of how to use Point and Figure charts to project targets and calculate risk-reward ratios is the most comprehensive ever seen.Also featured in the second edition are:- A step-by-step analysis of the FTSE 100 Index using the 3-box method, as well as the NASDAQ Composite Index, using the 1-box method- A detailed discussion of optimising techniques- An in-depth chapter on Analysing Point and Figure charts, extensively rewritten from the first edition- A new explanation of how Point and Figure parameters are chosen and the implications of choosing them- Two new Point and Figure construction methods never seen before- Point and Figure's contribution to market breadth, with a look at bullish percent and two brand new indicators- Full discussion of Point and Figure gaps and how they provide valuable information about the chart- Lesser known, more advanced techniques such as the use of moving averages, parabolic SAR and Bollinger Bands on Point and Figure charts- Price and volume activity histograms and how they provide information about support and resistanceAll this is illustrated with numerous colour charts and observations from years of trading experience.According to du Plessis, Point and Figure charts are the 'voice of the market'. This book helps you listen to, and understand, that voice.Part of the Market Technicians Association (MTA) Required Reading list.Shortlisted for the 2013 Technical Analyst Book of the Year Award

About the AuthorPreface to the Second EditionPreface to the First EditionIntroductionIntroduction to Technical Analysis1. Introduction to Point and Figure ChartsHistory and developmentWhere did Point and Figure charts get their name?The use of Point and Figure charts over the yearsThe voice of the market2. Characteristics and ConstructionCharacteristics of Point and Figure chartsPoint and Figure construction3-box reversal charts5-box reversal charts2-box and other reversal chartsSummary so farThe move from intra-day to end-of-day - The great controversyEnd-of-interval time-frame Point and Figure chartsLog scale Point and Figure chartsSummary3. Understanding Patterns and Signals1-Box and 3-Box Reversal ChartsPoint and Figure signalsThe strength of the patternThe breakout and pullbackTerminology clarification1-box and 3-box patternsTrapsBroadening patternsBullish and bearish patterns that reversePolesOther PatternsCongestion analysisSignals with the trend or against the trendSummary4. Understanding and using Trend linesTrend line breaks45° Bullish support and bearish resistance linesTrend lines and signal rulesSummary5. Projecting Price TargetsCounts on 1-box reversal chartsCounts on 3-box reversal chartsThings you should know about Point and Figure countsCounts on other box reversal chartsCounts on log scale chartsDe Villiers and Taylor 3-box horizontal countsRisk and rewardAnother way of projecting targets - Fibonacci retracementsSummary6. Analysing Point and Figure ChartsImplications of changing the construction parametersChoosing your chart parametersDrawing your first Point and Figure chartShowing gapsOther ways of determining box sizeAnalysis of 3-box reversal chartsAnalysis using 1-box reversal chartsAnalysis of 2-box chartsStoplosses on Point and FigureLow-risk entriesSummary7. Point and Figure Charts of IndicatorsPoint and Figure of relative strengthPoint and Figure of on-balance volumePoint and Figure of oscillatorsSummary8. Optimisation of Point and Figure ChartsThe case for and against optimisationApproaching Point and Figure optimisationOptimising for specific patternsConclusion9. Point and Figure's Contribution to Market BreadthIntroductionA caveatBullish PercentBullish Trend PercentX-Column PercentOther Market Breadth Indicators based on Point and FigureMarket Breadth on other marketsSummary10. Advanced Point and Figure TechniquesMoving averages on Point and FigureParabolic stop and reverse (SAR) on Point and FigureBollinger Bands on Point and FigureActivity histogramsSummary11. Chart ExamplesSpot Euro Dollar (daily) 0.01 x 1Spot Euro Dollar (60 minute) 0.01 x 1Gold PM Fix 5 x 1Gold PM Fix 5 x 3Brent Crude Index (IPE) 2% x 1Brent Crude Index (IPE) 1% x 3MIB 30 Index 1% x 3Nikkei 225 Index 100 x3Hang Seng Index 100 x3DJ Euro Stoxx 50 1% x3Infineon Technologies AG 2% x 3IBM 1% x 3Compuware Corporation 1% x 1Intel Corporation 0.25 x 3American Express Company 1.5% x 3Three month sterling interest rate future (June 2005) (60 minute) 0.025 x 1Gold 15 x 3US 10 year yield 0.025 x 3Brent CrudeSummary12. Dividing your Stocks into Bullish and BearishConclusionReferences and Further ReadingAppendix A - Construction of 2-Box Reversal ChartsExample of a 10 x 2 Point and Figure chartAppendix B - Construction of 1-Box Reversal High/Low ChartsExample of a 10 x 1 Point and Figure chart using high/low pricesAppendix C - Construction of Log Scaled ChartsIndex