History of Point and Figure Technical Analysis.

The premise of Point & Figure charting is to provide a logical, organized and sensible way of recording the supply and demand relationship in any particular security or sector. When it is all said and done, if there are more buyers in a particular security than there are sellers willing to sell, the price will rise. On the other hand, if there are more sellers in a particular security than there are buyers willing to buy, then the price will decline. If buying and selling are equal, the price will remain the same. This is the irrefutable law of supply and demand. The same reasons that cause price fluctuations in produce such as potatoes, corn and asparagus cause price fluctuations in securities. - taken from the book "Point and Figure Charting" by Tom Dorsey.

The chart above depicts the first style of Point & Figure charts. Over the years, they have evolved. Today, the price is located on the vertical axis and the "figures" are replaced with X's and O's. X's represent demand and are always moving up the chart while O's represent supply and are always moving down the chart.

This methodology was prominent in the 1960's but then dropped out of favor. This form of technical analysis is unique and to become a craftsman requires study. By attending this on-line University you are well on your way to becoming a craftsman. You will learn more about this in Lesson 1.