Point and Figure (PnF) Moving Averages

The Point and Figure (PnF) Moving Averages indicator provides a live, non-repainting moving average tool specifically designed for Point and Figure analysis by filtering out noise and focusing on significant price movements. This script utilizes its own internal P&F engine rather than standard platform functions to calculate averages based on column data, making it easier to identify core support and resistance levels.

Usage

The Usage section describes how the script can be used to filter market volatility and identify trend changes. Users can apply this indicator to standard time charts to see where P&F-based trends sit relative to current price action.

• Trend Identification: Users can look for crossovers between the Fast and Slow P&F moving averages to identify potential trend reversals.
• Filtering Noise: Because P&F logic only updates when price moves by a specific box size, these moving averages are less reactive to minor fluctuations than standard SMAs or EMAs.
• Support and Resistance: The smoothing effect of the P&F engine highlights areas where price has consolidated, which can serve as significant horizontal levels.

Details

The script executes a custom Point and Figure engine that operates independently of the chart's time interval. P&F charts consist of columns of Xs (rising) and Os (falling). A new column is only started when the price reverses by a specified number of boxes.

Unlike standard moving averages that calculate based on every bar's closing price, these averages are calculated based on the "Average Price" of each P&F column, defined as (Open + Close) / 2. This creates a "double smoothing" effect: first by the P&F price filtration and second by the moving average length itself. Consequently, shorter lengths are often more effective than traditional settings.

Settings

Setup

• Method: Determines how the box size is calculated. Options include User Defined (fixed value), ATR (dynamic volatility), Traditional (predefined price brackets), or Percentage.
• Atr Period: Sets the lookback period if the ATR method is selected.
• Box Size: The fixed price value for the User Defined method.
• Percentage %: The fixed percentage of the price used for the Percentage method.
• Reversal: The number of boxes required to switch columns (e.g., a 3-box reversal is standard).
• Source: Choose between using "Close" prices or "High-Low" prices to drive the P&F logic.

MA

• MA Type: Select between Exponential Moving Average (EMA) or Simple Moving Average (SMA).
• MA Source: Choose to calculate the average based on the "Average Price" of the column or the "Close Price" of the column.
• Fast/Slow Length: The number of P&F columns used to calculate the two moving averages.
• Fill between MAs: Enables or disables the background color fill between the two moving average lines.

FAQ

How does this differ from a regular Moving Average? Standard moving averages calculate data based on time (each candle), whereas P&F moving averages only calculate data based on price movement. If the price does not move enough to create a new P&F box, the moving average remains unchanged regardless of how much time passes.

Why are the moving averages not moving with every new candle? The script only updates its calculations when the Point and Figure logic registers a change in the column or price level based on your Box Size and Reversal settings.

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