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Chart Professor: Point and Figure Charts Ignore the Noise

The Chart Professor is back to help us dive further into the stock charts you need to make smart investment decisions. This week we're talking point and figure graphs and why they can give you an edge over other traders. Watch now!

The Chart Professor is back so we can dive further into the stock charts you need to understand and analyze to make smart investment decisions.

This week Bruce Kamich, our resident Chart Professor and in-house technical analyst, helps us really understand the point and figure chart.  It's one of the oldest charts in U.S. and dates back to 1880's. A mark only is made on this chart when the stock moves a predetermined price. In the chart in this video, each "X" represents a move up. A "0" notes a reaction to the move.

And while it looks like you charting out football plays, it's worth taking the time to really understand it -- because too many investors don't.

Here are the pros and cons, per Kamich:


Pros

TheStreet Recommends

  • Just focuses on price changes - ignores "noise," volume and time
  • Breakouts and breakdowns are clearer
  • Adaptable
  • Can give longer-term price targets

Cons

  • Not popular
  • Conceptually hard to understand at first

So watch the video above now to learn more and be sure to reach out to either of us if you have any questions or want us to cover something special @ tracybyrnes @ brucekamich.

Be sure to check out our other great chart videos too:


Read more from Kamich on Real Money
and learn from the best.