Point & Figure Counting
Chapter 1's Law of Cause and Effect said a wider, longer trading range implies a larger subsequent move. Point & Figure (P&F) counting is how Wyckoff practitioners turn that idea from a vague intuition into an actual number — a price target you can write down before the move happens.
What a Point & Figure chart is, briefly
A P&F chart plots price using columns of X's (rising) and O's (falling), with no time axis at all — a new box only gets added when price moves by a fixed increment (the "box size"), and a new column only starts when price reverses by a minimum number of boxes (the "reversal amount," most commonly 3 boxes). Time and small noise are filtered out entirely; all that remains is price movement of a meaningful size.
That property — filtering out time — is exactly what makes it suited to counting "cause." A trading range that takes three weeks to build and one that takes three months to build the same width produce the same P&F count, because the count only cares about how much price ground was covered sideways, not how long it took.
The horizontal count
To project a target out of a trading range, count the number of boxes across the width of the range on the P&F chart — from roughly where the range begins forming (the SC/BC area from Chapters 3–4) to where it resolves (the breakout point). That horizontal box count is the raw measure of "cause."
The reversal amount (typically 3) is in the formula because a 3-box reversal chart requires 3× the box size worth of movement to even register a new column — so each column already represents 3 boxes' worth of the "cause" being applied, and the standard convention keeps that multiplier in the vertical projection.
A worked example
Say a stock builds an accumulation range on a $1-box, 3-box-reversal P&F chart. The range spans 25 columns wide before the breakout, and the breakout occurs at $60.
That $135 isn't a guarantee — it's a minimum objective implied by the size of the cause built. Price can (and often does) exceed it, especially if a new range forms partway up and adds further cause via re-accumulation (Chapter 9). It can also fall short if the trend runs out of demand early — the count describes potential, not certainty.
Where to start and stop the count
This is the part with the most judgment involved, and it's why two Wyckoff practitioners can get two different targets from the same chart:
The practical habit worth building: take both counts and treat the conservative one as your minimum expectation and the full count as an upside case, rather than committing to a single number as if it were precise.
The vertical count — a secondary method
There's a second, less commonly used P&F counting method that measures a single strong, uninterrupted column (a sharp SOS move, for instance) rather than a whole range's width, and projects forward using that column's box count. It's used far less often than the horizontal count because a trading range's width is generally considered a more reliable measure of built-up cause than one fast column's move — but it's worth knowing it exists if you see it referenced elsewhere.