Point & Figure Charting by Thomas J. Dorsey
If you’re confused by candlesticks, or baffled by Bollinger Bands, then maybe Point & Figure charts are for you. Simple to construct and simple to understand, P&F charts draw clear pictures of a security’s price movement, independent of time. When the price moves, the chart moves – when the price doesn’t move, neither does the chart!
In Point & Figure Charting, Tom Dorsey presents all of the basics behind the construction and interpretation of point and figure charts. After describing how P&F charts are created, he helps to interpret the picture of market supply and demand they paint, the patterns that form on the charts and the various buy and sell signals they present. He also shows how P&F charts can be used in many areas of market study, and emphasizes the importance of examining a stock’s relative strength and market sector analysis.
But perhaps one of the most interesting topics covered in the book is the Bullish Percent concept: a Bullish Percent Index provides an indication of strength or weakness in a particular market or sector based on the percentage of stocks that are on P&F “buy” signals. Dorsey demonstrates with a few tables how the Bullish Percent Indices he tracks gave him fair warning of the bursting of the stock market bubble in the spring of 2000.
To many, Point & Figure charts provide a simpler, clearer picture of market action than standard line or bar charts. This book will help you to understand P&F charts and how you can make them work for you.
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