Point and Figure (PnF) Momentum

The Point and Figure (PnF) Momentum indicator provides a live, non-repainting momentum oscillator based on a custom-built Point and Figure engine. This tool effectively filters out minor price noise and time-based distractions, allowing traders to measure the rate of change and trend strength specifically within PnF-filtered price movements.

Usage

The tool can be used to identify trend exhaustion or potential reversals by monitoring the momentum of PnF columns. When the momentum line or histogram crosses above zero, it indicates that the current PnF price is higher than it was a specified number of columns ago, suggesting bullish strength. Conversely, a cross below zero indicates bearish momentum.

Traders can utilize the different box size methods to tune the sensitivity of the PnF engine. For example, using a "User Defined" box size allows for fixed threshold filtering, while "ATR" or "Percentage" modes allow the indicator to adapt to current market volatility or price levels.

Details

Unlike standard momentum indicators that compare prices across a fixed number of bars (time), this indicator compares prices across a fixed number of PnF columns. Because PnF columns only form when significant price movement occurs, this momentum calculation is inherently tied to price action rather than time.

The script features a built-in PnF engine that handles reversals and box filling without relying on TradingView's integrated chart types, ensuring the output can be displayed as an oscillator below any standard time-based candle chart.

Settings

SETUP

• Method: Selects the calculation method for box sizes (User Defined, ATR, Traditional, or Percentage).
• Atr Period: Sets the period for the Average True Range if the ATR method is selected.
• Box Size: Sets a fixed price value for each box when using the User Defined method.
• Percentage %: Sets the box size as a percentage of the current price when using the Percentage method.
• Reversal: The number of boxes required to form a new column in the opposite direction (standard is 3).
• Source: Determines whether "Close" prices or "High/Low" prices are used to calculate PnF movements.

MOM

• Length: The number of PnF columns back to compare for the momentum calculation.
• Display as: Choose between a "Line" or "Histogram" visual output for the oscillator.

FAQ

How do I use this indicator?

You can apply the Point and Figure (PnF) Momentum to your chart and use the zero-line crossovers or divergences to gauge the strength of the current price trend.

What is the best box size method?

The "ATR" method is often preferred for volatile assets as it adjusts to market conditions, while the "Traditional" method follows classic PnF charting rules based on specific price brackets.

Where can I access this tool?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.