A New Way to Read Point & Figure Charts — And a Trading Lesson on Springs That Even Experienced Traders Overlook

Based on this week’s Wyckoff Market Discussion session · For educational purposes only

Every week, the Wyckoff Market Discussion (WMD) team walks through live markets using the Wyckoff methodology — reading price, volume, and structure in real time. This post is a factual recap of two moments from this week’s session, shared for educational purposes only. It isn’t a substitute for watching the full session, where every chart and the reasoning behind it are covered in far greater depth.

Point & Figure Charts Are Getting a Volume Upgrade

Point and figure charting has been a cornerstone of technical analysis for over a century, valued for stripping out time and noise to focus purely on price movement. But traditional point and figure charts have one long-standing limitation: they don’t show volume.

During this week’s session, one of our analysts previewed a new platform currently in development that combines point and figure analysis with volume data embedded directly into the chart. Each box on the point and figure grid displays a corresponding volume figure — in the example shown, a sequence of numbers like 15, 15, 15, then 6, 7, 7 — giving a more complete picture of price and volume together in a single view.

The analyst drew a direct historical parallel: this is conceptually very similar to what Richard Wyckoff and tape readers of his era were doing manually roughly a century ago, writing down the number of contracts or units traded as they built point and figure charts by hand, in real time. The new platform automates that same underlying idea.

As a working example, the analyst pulled up an intraday point and figure chart of the Invesco QQQ Trust (QQQ), used as a proxy for the Nasdaq. On that chart, a clearly defined supply zone appeared as a dark cluster of boxes — four boxes in a row showing high volume — making that resistance level easy to identify directly from the point and figure grid itself.

The platform is expected to be released by the end of the month, with a full, in-depth walkthrough planned for a future Wyckoff Market Discussion session.

Why a “Spring” Pattern Isn’t Always a Buy Signal

The second theme from this week’s session centered on the Nasdaq, which one analyst described as showing a well-defined downtrend structure. Within that downtrend, price action on the day of the session showed an attempt to test support that had the visual appearance of a spring — a brief penetration below a support level.

The analyst’s view was direct: even though the pattern looked like a spring, this was not treated as a good setup to go long. The reasoning was explicit — springs that occur within an established uptrend are a different situation than springs that occur within a downtrend, and this analyst does not trade the latter the same way. From a risk/reward standpoint, the setup was described as offering no real edge for a long position, better suited to being watched and read rather than acted on, unless a trader is specifically working on very short, intraday time frames.

A guest analyst joining the discussion added his own perspective, describing himself as naturally risk-averse by disposition. His stated approach was to wait for a genuine breakout before getting involved, rather than trying to anticipate the exact bottom. He specifically noted the risk of trying to catch what could turn out to be a “falling knife” — a pattern that looks like support holding, but instead continues lower — calling that scenario potentially quite costly if it played out.

The Common Thread

Both moments from this week’s session point to the same underlying principle in Wyckoff-style analysis: patterns alone don’t tell the full story. Volume adds context that price alone can’t provide, and the same-looking chart pattern can carry very different risk depending on the broader trend it appears in.

These are exactly the kinds of real-time judgment calls — weighing volume, trend context, and risk/reward together — that come through most clearly by watching how experienced analysts reason through live markets, week after week.

To see the full chart-by-chart breakdown and how our analysts apply these concepts to current market conditions, join us live for Wyckoff Market Discussion. You can get your first month for just £20 with the coupon code WMD20

This post is a factual summary of discussion points from this week’s Wyckoff Market Discussion (WMD) session. It is provided for educational purposes only and does not constitute financial or investment advice. Nothing in this post should be construed as a recommendation to buy, sell, or hold any security or financial instrument.