The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

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Mechanics and Dynamics of Charting


the charts in terms of bar width, rather than height. Equivolume bars are con-
structed using high and low prices. Open and close prices are disregarded. Larger
volume over a particular interval or period will result in a wider bar. Because of
the variable bar width, the horizontal or time axis is not plotted in a linear fash-
ion, even though equivolume bars represent constant‐time based bars. As such,
geometrically based overlay indicators such as trendlines, channels, and chart pat-
terns are somewhat affected or distorted when applied to such charts. Figure 3.11
clearly depicts the non‐linear increments along the horizontal or time axis on
the daily equivolume chart of Apple Inc. Notice that the trendlines intersect the

figure 3.10 Bullish and Bearish Japanese Candlesticks.

figure 3.11 Comparing a Japanese Candlestick to an Equivolume Chart.
Courtesy of Stockcharts.com
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