The Advantages of Point and Figure Charts
Point and figure charts have several advantages over simple line graphs showing the movement of prices. Primarily they remove the effect of noise, concentrating on the high and low prices of each share during each day. They can also compress several days into one, depending on whether share movement is fast or sluggish, thereby compressing the horizontal axis (time) unevenly. Surprisingly, there are situations where this can prove useful. However, their greatest advantage is that they make spotting support levels, resistance levels and upward and downward trends very easy to spot.