AlphaTRADER Academy
Cause & Effect — P&F Counts
Most analysis tells you direction. Wyckoff's horizontal P&F count tells you how far price will travel. Math, not opinion. The width of the trading range is the cause; the proportional move that follows is the effect.
"Effect must be in proportion to cause." — Richard Wyckoff
Why Point & Figure?
P&F charts strip out time. Only meaningful price moves are recorded. They expose horizontal cause-building that bar charts hide.
Two Symbols
X columns = rising prices. O columns = falling prices. Direction switches only after a defined reversal.
Box Size
Minimum price movement to plot one X or O. Stocks: $1. Forex: 10 pips. Adjusts to instrument volatility.
Reversal
Number of boxes the price must move against the column to start a new column. Standard: 3-box reversal.
The Horizontal Count Formula
The single most powerful equation in Wyckoff. Memorize it.
+ for accumulation (target above), − for distribution (target below)
Count the number of P&F columns inside the trading range, multiply by your box size and reversal, then add to the breakout level. That's where price must travel to satisfy the cause.
Each P&F column represents real money committed to absorbing supply (or distributing inventory). The wider the cause, the more position smart money built — and the more they need to unload during the markup.
Count Calculator
INTERACTIVEPlug in any range and compute conservative, standard, and aggressive targets in real time.
Price of the row from which you count (typically LPS for acc, LPSY for dist).
Visual Price Ladder
Vertical projection of the count above (or below) the breakout level. Watch it shift as you change calculator inputs.
Three Count Methods
Wyckoff used three reference levels for the count, each with different aggressiveness.
Worked Example — XAU/USD
A real-style accumulation count, step by step.
Identify the range
XAU/USD accumulation from $1,810 (SC) to $1,860 (top). Width: $50.
Choose box size & reversal
For gold daily: box = $3, reversal = 3.
Count horizontal columns at LPS row
From SC to LPS, count P&F columns at the LPS price level: 20 columns.
Apply the formula
Target = $1,840 + (20 × $3 × 3) = $1,840 + $180 = $2,020
Three target zones
Conservative $1,975 (×0.75), Standard $2,020 (×1.0), Aggressive $2,110 (×1.5). Trail stops between zones.
When Counts Work — and When They Fail
P&F counts are projections, not guarantees. These filters separate reliable from unreliable counts.
Counts work best when:
- ▸ Range is symmetric and well-defined
- ▸ Volume profile shows clear absorption
- ▸ COT confirms commercial accumulation/distribution
- ▸ HTF trend aligns with breakout direction
- ▸ Spring/UTAD test was clean (Phase C confirmed)
Counts fail when:
- ▸ Range is choppy with no clear phase structure
- ▸ Breakout happens on weak volume
- ▸ Count exceeds prior swing extreme by >3×
- ▸ Macro events override technical structure
- ▸ Multiple competing counts give wildly different targets
Test Your Understanding
4 questions — instant feedback, no scoring stored.