diff --git a/doc/techref/index.md b/doc/techref/index.md
index 9d6367ac055..8cbfe04cea7 100644
--- a/doc/techref/index.md
+++ b/doc/techref/index.md
@@ -14,5 +14,6 @@ fonts.md
 text_formatting.md
 patterns.md
 encodings.md
+reference_anchor_points.md
 environment_variables.md
 ```
diff --git a/doc/techref/reference_anchor_points.md b/doc/techref/reference_anchor_points.md
new file mode 100644
index 00000000000..36f6e65aef7
--- /dev/null
+++ b/doc/techref/reference_anchor_points.md
@@ -0,0 +1,55 @@
+---
+file_format: mystnb
+---
+
+# Reference and anchor points
+
+For placing plot embellishments we distinguish between reference and anchor points.
+To set these points users have to use the justification codes (add link when PR merged).
+The `offset` parameter allows to offset the anchor point from the reference point.
+
+```{code-cell}
+---
+tags: [remove-input]
+---
+"""
+Script explaining reference and anchor points.
+"""
+import pygmt
+
+size = 5
+x1 = [-size, 0, size, size, size, 0, -size, -size, 0]
+y1 = [-size, -size, -size, 0, size, size, size, 0, 0]
+x2 = [-3, -2, -1, -1, -1, -2, -3, -3, -2]
+y2 = [-1, -1, -1, 0, 1, 1, 1, 0, 0]
+codes = ["BL", "BC", "BR", "MR", "TR", "TC", "TL", "ML", "MC"]
+
+fig = pygmt.Figure()
+fig.basemap(projection="X10c/6c", region=[-size, size, -size, size], frame=0)
+
+fig.text(
+    text=codes,
+    x=x1,
+    y=y1,
+    justify=codes,
+    offset="j0.5c/0.2c+v1p,gray30",
+    font="10p,1,black",
+)
+
+fig.plot(x=x2[0:-1], y=y2[0:-1], fill="bisque")
+
+fig.plot(x=-size, y=size, style="s0.6c", fill="lightred", no_clip=True)
+fig.plot(x=x1, y=y1, style="c0.25c", fill="steelblue", no_clip=True)
+
+fig.plot(x=-3, y=1, style="s0.6c", fill="orange")
+fig.plot(x=x2, y=y2, style="c0.15c", fill="darkblue")
+
+fig.plot(x=[-5, -3], y=[5, 1], pen="0.5p,black")
+fig.plot(x=[-5, -3], y=[1, 1], pen="0.5p,black,2_2")
+fig.plot(x=[-3, -3], y=[1, 5], pen="0.5p,black,2_2")
+
+fig.text(x=-4, y=1, text="dx", offset="0c/0.2c")
+fig.text(x=-3, y=3, text="dy", offset="-0.2c/0c")
+
+fig.show(width=600)
+```