Point & Figure Charting for the CMT Exam: Construction, Patterns & Price Targets

Point & Figure on the CMT Exam

Point & Figure (P&F) charting is a pure price-action method that eliminates time and minor price movements. It is heavily tested on CMT Level 2 under Advanced Charting (20% weight) and also appears on Level 3.

For the full Level 2 curriculum, see the CMT Exam Guide 2026.

P&F Construction Rules

Box Size and Reversal Amount

• Box size: Minimum price change recorded (e.g., $1 or 1 point)
• Reversal amount: Number of boxes needed to reverse (typically 3-box reversal)
• Columns of X represent rising prices; columns of O represent falling prices
• No time axis — only price movements matter

Construction Steps

1. Choose box size and reversal amount
2. Record X's in a column when price rises by box size
3. Move to a new column of O's when price reverses by (reversal × box size)
4. Continue plotting — each column represents a single directional move

P&F Chart Patterns

P&F charts generate the same classical patterns as bar charts, but with unique variations:

Bullish Patterns

• Double Top Breakout: Price exceeds two prior column highs
• Triple Top Breakout: Breaks above three prior column highs (stronger)
• Ascending Triple Top: Higher highs followed by breakout
• Bullish Catapult: Combination pattern — very strong signal

Bearish Patterns

• Double Bottom Breakdown: Price falls below two prior column lows
• Triple Bottom Breakdown: Breaks three prior lows
• Descending Triple Bottom: Lower lows followed by breakdown
• Bearish Catapult: Combination breakdown pattern

Price Targets

P&F offers two unique price target methods not available with other chart types:

Horizontal Count

Measures the width of a consolidation pattern:

• Count the number of columns in the pattern
• Multiply by box size × reversal amount
• Add to the breakout level for upside target (or subtract for downside)

Vertical Count

Measures the height of the first column after breakout:

• Count the boxes in the first thrust column
• Multiply by reversal amount
• Add to the column low for upside target

P&F vs. Bar Charts

CMT Exam Tips

1. Know construction rules — box size, reversal amount, and when to move to new columns
2. Practice counting — both horizontal and vertical count methods
3. Recognize P&F patterns — double/triple top breakouts and breakdowns
4. Understand 45° trendlines — unique to P&F; they act as automatic support/resistance
5. Compare to Renko charts — another time-independent method

Practice P&F questions in our test bank. Full guide: CMT Exam 2026.