Kagi Chart
A Kagi chart is a line chart that changes direction only when price reverses by a set amount and ignores time. The line turns thick (yang) when price breaks above a prior high and thin (yin) when it breaks below a prior low.
Kagi charts look like a continuous, zig-zagging line that sometimes thickens and sometimes thins. They come from 19th-century Japan and, like Renko and Point & Figure, care only about meaningful price moves. The changing thickness is their special feature: it shows when supply or demand has taken control. This entry explains reversal amounts, yin and yang lines and how to read the signals.
- Category
- Technical Analysis
- Reading time
- 4 min
- Also called
- Kagi charts, Kagi line chart
- Updated
Kagi charts in plain words
Kagi charts are based only on price and ignore time, much like Point & Figure charts.1
They are line charts that change direction when price moves by a required reversal amount; Steve Nison dates them to late 19th-century Japan.1
The line changes thickness — yang and yin — when price breaks above a prior high or below a prior low.1
How a Kagi chart works, step by step
Set the reversal amount
Fixed points, a percentage or ATR. See Average True Range.
Choose the data
Closing prices or the high-low range.
Extend the line
Keep going while price moves in the same direction.
Reverse on enough movement
Draw a short horizontal step, then turn.
Thicken or thin
Thick above a prior high, thin below a prior low.
Trade the switch
Thin-to-thick is bullish; thick-to-thin bearish.
Worked examples
Example 1 — No reversal yet
Line unchangedReversal amount 20 points. The rising line reaches 1,951; price then falls to 1,935.
| Decline | 1,951 − 1,935 = 16 points |
| Reversal? | No — less than 20 |
The rising line will not reverse until price falls to 1,931 or lower.1
Example 2 — Reversal
Down linePrice falls further to 1,928.
| Decline | 1,951 − 1,928 = 23 points |
| Chart | Line turns down |
A move of at least the reversal amount turns the Kagi line in the new direction.1
Example 3 — Yin to yang
Buy signalA thin (yin) line rises from 1,900 and breaks the prior shoulder high at 1,940.
| Break above prior high | 1,940 |
| Line becomes | Thick (yang) |
Lines change thickness when prices break above a prior high or below a prior low.1
Kagi vs Renko vs Point & Figure
| Aspect | Draws | Signal feature |
|---|---|---|
| Kagi | A continuous line | Thickness change |
| Renko | Fixed bricks | Brick colour. See Renko Chart |
| Point & Figure | X and O columns | Column breakouts |
| All three | Ignore time | Filter small moves |
How traders use Kagi charts
Trend changes
Yin-yang switches as signals. See Trend.
Noise filtering
Ignoring moves below the reversal amount.
Support and resistance
Shoulders and waists mark levels. See Support and Resistance.
Confirmation
Checking signals from other charts.
Advantages and disadvantages
Advantages
- Filters noise.
- Thickness makes trend shifts visible.
- Shows key highs and lows clearly.
Disadvantages
- Unfamiliar to most traders.
- Ignores time and volume.
- Signals depend on the reversal amount.
Going deeper
Read as far as you need. Each level builds on the one before it.
Closing or high-low data
Beginner
The reversal amount can be applied to closing prices or the high-low range; the range gives more reversals and more sensitivity.1
Shoulders and waists
Intermediate
Short horizontal steps at tops are called shoulders and at bottoms waists; breaking them changes the line's thickness.
A family of time-free charts
Advanced
Kagi charts come from Japan and, like Point & Figure charts, evolve only when price moves; Renko and Three Line Break follow the same idea.1 On a Point & Figure chart, too, no price movement means no change at all.2 See Three Line Break Chart.
Common mistakes
Reversal amount too small
Too many whipsaws.
Expecting time information
Kagi has no date axis.
Trading every thickness change
Combine with trend context.
Mixing data types
Close-only and high-low charts differ.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Kagi charts are time-free line charts.
- The line reverses only after a set price move.
- Thick (yang) lines follow breaks above prior highs.
- Thin (yin) lines follow breaks below prior lows.
- They come from 19th-century Japan.
Frequently asked questions
Where does the name Kagi come from?
What reversal amount should I use?
Are Kagi charts good for beginners?
Further learning
- Renko Chart
Another Japanese time-free chart.
- Point and Figure Chart
The Western equivalent.
- Three Line Break Chart
A close relative.
- ZigZag Indicator
A similar filtering idea on price charts.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Kagi Charts (opens in a new tab) Checked .
- StockCharts ChartSchool. Introduction to Point & Figure Charts (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.