XO Zone

Creator : Definedge

The XO Zone 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.

The XO Zone Indicator provides a measure of bullish and bearish momentum. However, no statistical calculations are applied such as summation, average, or multiplication. It calculates it by looking at the bullish and bearish points in the price pattern.

An “X” represents a bullish print on a P&F chart, whereas an “O” represents a bearish print. Thus, this indicator is a price-based indicator plotted on a chart.

The number of “X’s” and “O’s” in the pattern is calculated using the indicator, and their difference is displayed below the chart.

The green zone in the XO Zone indicator shows that bullish prints outnumber bearish prints, which suggests a bullish trend. In the XO Zone indicator, the red zone indicates that bearish prints are greater than bullish prints, which indicates a bearish trend.

In the commentary box of the indicator, it is also indicated at what price the bullish zone will turn to the bearish zone or the bearish zone will turn to the bullish zone.

Prashant Shah introduced this indicator in his book on P&F charts which is available for free on Shelf.

Click here to learn more about this indicator.

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 on 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.