Bell Curves: How They Are Used in Point & Figure Charting

by | Nov 26, 2012 | Videos, Technical Analysis

Bell curves are an integral part of point & figure charting, and Tom and Brendan will discuss why in this video. As promised in our previous podcast, you will be able to view some visual examples of charts in this week’s video. Tom will talk you through the charts and help make all the X’s and O’s make sense.

Bell curves should not be a totally new concept to you, but you probably haven’t used one since high school or early college! The basic concept of a bell curve becomes much more difficult to comprehend when it is applied to a point & figure chart. Point & figure charts are a main source of how money is managed at Mullooly Asset Management. Tom will show how the bell curves are applied to point & figure charts to obtain this useful information.

With bell curves, chances are that things will fall between the middle band of the curve. What needs to be monitored is when an extreme situation arises, which is when we leave the middle of the band and stray to either side. This signifies one of two things, we are over-bought or over-sold. Over-sold means that many people have been selling a stock, and the selling continued to a point where it broke through a support line and bottomed out. Over-bought means a stock has been purchased by many people and is reaching a peak in its price, which will typically end with a regression.

If this all sounds like a foreign language to you, don’t worry! In the video Brendan and Tom will go over everything with great visual examples. The examples really make these concepts easier to grasp.

Check out this week’s Mullooly Asset Management video and learn all about bell curves and their use in point & figure charting.

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