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

(sohrab1953) #1

Mechanics and Dynamics of Charting


■ (^) Rising prices may take on a potentially bullish appearance with prices accelerat-
ing as they rise (or rising evenly) in a convex‐type fashion, resembling an upward
parabolic move (or steadily rising prices) on linear or arithmetically scaled charts
See Figures 3.21 and 3.22.
Figure 3.23 highlights the discrepancies between linear‐ and ratio‐scaled chart-
ing when drawing price channels based on identical price inflection points. Geo-
metrically based barrier overlays give rise to inconsistencies when compared using
figure  3.19 Comparing Uptrend Line Penetrations on Linear and Ratio Charts on
the SPDR Dow Jones Industrial Average.
Courtesy of Stockcharts.com
figure 3.20 Comparing Downtrend Line Penetrations on Linear and Ratio Charts on
the U.S. Natural Gas Fund.
Courtesy of Stockcharts.com

Free download pdf