Point and Figure Charts: How to Read Them, Box Size, Reversals and Price Targets

By Nummius · October 18, 2026

A point and figure chart plots only meaningful price changes. It ignores time and volume completely: a column of Xs records a rise, a column of Os records a fall, and nothing new is drawn until price moves by a set amount. The result is a chart that filters out small fluctuations and makes support, resistance and breakouts unusually easy to see. It is one of the oldest charting methods still in use, with roots in the late 1800s, and it remains popular because its rules are objective. This guide covers how to read point and figure charts and how to use them for price targets.

How a point and figure chart is built

Two settings define every point and figure chart:

• Box size: how much price must move to add one X or one O. With a $1 box, every $1 of movement adds a box.
• Reversal amount: how many boxes price must move against the current column before a new column starts. The classic setting is a 3-box reversal.

The rules are simple. While price keeps rising, add Xs to the current X column, one per box. When price falls by at least the reversal amount from the highest X, move one column to the right and start a column of Os. While price keeps falling, add Os. When it rises by the reversal amount from the lowest O, start a new X column.

Because there is no time axis, a quiet month might add nothing at all, while one volatile day might add several columns.

Choosing the box size

The box size controls how much detail the chart shows. Smaller boxes show more swings and more signals; larger boxes show only the major trend. Common approaches:

• Fixed box: the same dollar amount at every price level, for example $1.
• Traditional scale: the box grows with price. One widely used scale uses $1 boxes for stocks priced between $20 and $100 and $2 boxes between $100 and $200.
• Percentage box: each box is a percentage of price, for example 1% or 2%, which behaves like a logarithmic scale and suits long histories.
• Volatility box: the box is based on the Average True Range, so it adapts to how much the instrument normally moves.

There is no correct box size, only one that suits your timeframe. Pick one and keep it, because changing the box changes every signal on the chart.

Classic buy and sell signals

Point and figure signals come from columns breaking past earlier columns of the same kind:

• Double top breakout (buy signal): an X column rises one box above the top of the previous X column.
• Double bottom breakdown (sell signal): an O column falls one box below the bottom of the previous O column.
• Triple top breakout and triple bottom breakdown: the same idea, with two earlier columns at the same level. These take longer to form and are usually considered stronger, because the level was tested more often.
• Ascending triple top and descending triple bottom: breakouts where the earlier tops (or bottoms) were stepping in the direction of the breakout.

A signal is not a recommendation to trade; it is an objective statement that supply or demand won at a specific level. Many traders only take signals in the direction of the main trend.

Trend lines on point and figure charts

Point and figure charts use 45-degree trend lines, drawn diagonally through the boxes rather than connecting highs or lows:

• Bullish support line: drawn up and to the right at 45 degrees, starting one box below the lowest O of a significant low.
• Bearish resistance line: drawn down and to the right at 45 degrees, starting one box above the highest X of a significant top.

Price above the bullish support line is commonly treated as a long-term uptrend; a close through it is a warning that the trend may be changing.

Price targets: horizontal and vertical counts

Point and figure charts are best known for their price objectives. There are two methods.

The horizontal count

The horizontal count measures the width of a congestion area, the sideways base before a breakout. The idea is that a wider base supports a bigger move.

1. Identify the congestion area, from the first column of the base to the column of the breakout.
2. Count the number of columns across it.
3. Multiply the count by the box size and by the reversal amount.
4. For an upside target, add the result to the lowest point of the base. For a downside target, subtract it from the highest point of a top.

The vertical count

The vertical count uses the height of the first strong column off a low instead of the width of the base. Count the boxes in that column, multiply by the box size and the reversal amount, and add the result to the low of the column. A column of 7 Xs rising from $40 with a $1 box and a 3-box reversal gives 7 × $1 × 3 = $21, a target of $61.

Treat both counts as estimates. They are useful for judging whether a trade has enough room to the upside for a sensible risk-reward ratio, not as promises. Price frequently stops short of the count, and sometimes overshoots it.

Strengths and weaknesses

How to use point and figure charts in practice

1. Start top-down. Use sector tools such as a relative rotation graph to decide which groups are strong.
2. Check the P&F chart for structure. Is price above its bullish support line? Is it forming a base?
3. Wait for a signal such as a double or triple top breakout from the base.
4. Use the count as a reality check. If the count target is barely above the entry, the trade may not be worth it.
5. Set the stop and size the position. A common stop is one box below the last O column; then size with a position size calculator.

Point and figure charts in Nummius

Nummius includes point and figure charts with horizontal count targets calculated for you, next to the regular candlestick charts and indicators. Point and Figure charting is part of the Core plan, which has a 14-day free trial; see the pricing page.

Key takeaways

• Xs record rises, Os record falls, and only moves of a full box count.
• Box size and reversal amount define the chart; choose them deliberately and keep them.
• Double and triple top breakouts and bottom breakdowns are the classic signals.
• Horizontal and vertical counts give price targets that work best as estimates, not promises.

This article is for educational purposes only and is not financial advice. Point and figure price targets are estimates based on past price action and are frequently not reached. Trading involves risk, including the loss of principal.