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1989issue C061-9

Point-and-figure setup and session-average entry windows

A commodity entry is specified as two functions: a multi-week point-and-figure setup, then a same-session signal from a session-average and an indicator-cluster. Once the setup is in force, a directional-filter admits only agreeing signals inside the overlap-window, and the next cluster is the exit if the entry zone does not hold.

  • Specify a commodity entry as a multi-week setup plus a same-session signal, and require those two functions to come from different analytical forms.
  • Build the setup only from daily point-and-figure recurring-reversal levels, a breakout-pullback, and equal-increment-angle lines, without price-objective methods.
  • Time the signal from a session-average baseline and from indicator-cluster zones, reading price above the level as strength and price below as weakness.
  • Let the directional-filter admit only same-direction signals inside the overlap-window. If the cluster does not hold, the next cluster is the exit and the procedure stands aside.
Entries in this reading3 entries
Current trackPoint and figure chart37 readingsRule-based entry174 readingsMoving average449 readings

A setup and a signal

A commodity entry is specified as two separate functions. The first is a setup: a directional hypothesis lasting several days to weeks that must exist before any same-session order is considered. The second is a signal: a short-horizon timing condition that can fire only after that setup already exists.

The setup is built on a horizon of several weeks to months, while entry signals are generated with same-session techniques. Both conditions may be true together for several minutes to several hours. That brief interval is the overlap-window.

Setup and signal are required to come from different analytical forms so that the directional map and the session timing rule are not the same indicator used twice.

Reading the daily point-and-figure map

Daily point-and-figure construction uses a chosen box size and reversal count. Advances plot as columns of X marks and declines as columns of O marks. Moves smaller than the box are ignored, as are intra-session fluctuations. The chart records only price moves large enough to fill a chosen box or reverse a chosen number of boxes.

Point-and-figure review is limited to three conditions. A recurring-reversal is a price level that has already turned the market more than once and is treated as candidate support or resistance. A breakout-pullback waits for the first move out of a range to retrace, then considers a trade opposite that retracement. Equal-increment-angle lines complete the list. Price-objective methods are not used.

Because price change drives both axes of a point-and-figure chart, support and resistance angle lines are drawn by counting boxes rather than by matching a time scale to a price scale. An equal-increment-angle is a support or resistance line drawn by counting the same number of price boxes on both chart axes.

Timing with the session-average

The same-session signal combines a daily average, or pivot, treated as a moving-average baseline with additional momentum traces. That daily level is the session-average. Relative to it, prices above the level are read as strength, prices below as weakness, and a crossing as a possible change of direction.

Zones where two or more of those traces meet or pass nearby are an indicator-cluster. Those zones are treated as candidate entry areas.

The overlap-window and the next cluster

Once a longer-horizon setup is in force, only signals that agree with that direction are eligible. The directional-filter therefore limits both how many session signals may be taken and which side of the market they may occupy.

If price does not hold at the clustered entry zone, the next cluster defines the exit. After that invalidation the procedure stands aside until a later overlap-window forms.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
3 of 30 in the Point and figure chart track
19891-5 pp.Next on Point and figure chartTwo-scale point-and-figure trendlines and stop placementThe case study begins on a longer-horizon one-by-three chart and then checks a one-by-one chart covering a slightly different window so congestion and breaks can be read at two scales.
All readings on this track · 30 readings
  1. 1988Constructing trend definitions with filters and lines
  2. 1989Reversal count as the clock on point-and-figure charts
  3. 1989Point-and-figure setup and session-average entry windows
  4. 1989Two-scale point-and-figure trendlines and stop placement
  5. 1989Adjusted net asset value, tighter reversals, and written stops on a fund point-and-figure chart
  6. 1990Stack option odds after point-and-figure signals
  7. 1991Constructing a point-and-figure downtrend-break
  8. 1991Constructing point-and-figure box and reversal charts
  9. 1991Constructing a close-tested one-two ladder on a point-and-figure chart
  10. 1992Point-and-figure, breadth, and volume as falsifiable hypotheses
  11. 1992Three-gate stock selection with ranks and point and figure
  12. 1993Constructing combined stochastics and point-and-figure relative strength
  13. 1997Point-and-figure box scale and reversal construction
  14. 2000Cotton weekly point-and-figure: late-stage decline, named weekly close
  15. 2000Constructing point-and-figure charts for support, resistance, and breakouts
  16. 2001Swiss franc: seasonal permission and a weekly point-and-figure breakout
  17. 2001Constructing point-and-figure boxes and reversals
  18. 2002Point-and-figure construction: box, live column, and three-box reversal
  19. 2003E-mini point-and-figure box-size and a descending-triangle breakout
  20. 2003A reconstruction critique of point-and-figure daytrading
  21. 2004Point-and-figure column moving-average crossovers
  22. 2005Box-series transforms for trend and channel work
  23. 2006Constructing bearish point-and-figure support breaks
  24. 2008Point-and-figure forex breakouts and triangles
  25. 2012From tactile charts to written trade rules
  26. 2013Combine a Point and figure chart and Moving-average crossover inside one System optimization procedure
  27. 2015Point-and-figure time and volume limits are conventions to test
  28. 2016Measurement-first critique of indicator defaults
  29. 2017Point-and-figure construction, reversals, and column-based overlays
  30. 2019A 2019 charting case as a three-check trend classroom
By fieldEntry and exit rules206 readingsBy year198983 readings
All 37 readings tagged Point and figure chart
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