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The Definitive Guide to Point and Figure: A Comprehensive Guide to the Theory and Practical Use of the Point and Figure Charting Method by Jeremy du Plessis

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Chapter 3: Understanding Patterns and Signals

Before you can use Point and Figure charts effectively, you need to understand what the charts are telling you. Because no time is involved in their construction, the chart can show one thing only: uncontaminated supply and demand. Uncontaminated, because the chart is not showing anything else – no time, no volume, nothing else which may distort the true interaction of the demand from buyers or supply by sellers. Remember, a Point and Figure chart does not change unless the price changes by the pre-determined amount. The passage of time, which causes all other chart types to ‘move’, makes no difference to a Point and Figure chart. Remember also that, in order to move the price, volume is required, ...

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