Average Column Length

Creator: Definedge

The Average column length indicator is a point-and-figure chart indicator developed by Prashant Shah.

The indicator is designed using the X, O, and vertical column properties of the Point & Figure chart.

When the average column length indicator is plotted, three lines appear below the chart. There are three length lines: the bullish length line, the bearish length line, and the combined length line.

The length of the column in the P&F charts shows the strength of the trend. A column with a high number of boxes indicates that the column is active and significant. The pattern indicates a strong trend and strong momentum.

For this indicator, the average length of bullish, bearish and total columns is calculated over a specified column.

When the bullish length line is above the bearish length line and the total column length line is rising, it indicates that the trend is strong and bullish. Furthermore, when the bearish length line is above the bullish length line and the total length line is rising, it indicates that the trend is strong and bearish.

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.