In the last video, Tom showed us the daily process of updating a point and figure chart. Another main component of point and figure charting is the buy signal. Tom shows exactly what a point and figure buy signal is in this video.
In point and figure, when a current column of X’s reaches the same level as the previous column of X’s this is a double top. When the current column of X’s exceeds the previous column of X’s, we call this a double top buy signal. This is one of the most basic chart patterns in point and figure. As you can likely imply from the name, a buy signal is a positive development. We consider many other factors important in the purchase of a security, but a buy signal is definitely a pro rather than a con.
Point and figure charting is best learned in a visual method, so check out this week’s video. You will understand a point and figure buy signal more clearly after watching.