THE HAndbook oF TEcHnIcAl AnAlySIScandlestick breaching this parallel uptrend line. If we project another parallel line
from Point 4, and retrace it back in time, we see that it coincides perfectly with the
trough that was formed at Point X around the end of January 2011. Although this
was done retrospectively, it is nevertheless now part of a valid rising channel. If we
continue to project another two parallel lines from Points 5 and 6, we notice that
the new channel also contains price effectively, providing resistance and support
at the channel top and bottom, respectively. This chart depicts the near perfect un-
derlying angular symmetry in the Silver market. This again shows the importance
of constructing chart patterns based on significant inflection points.
relative and absolute Volume Absolute volume is not as important as rela-
tive volume in technical analysis. It is the change in volume that provides the
fIgure 6.21 A Three‐Sigma Volume Filter on the Daily Chart of USDJPY.
Source: MetaTrader 4
fIgure 6.22 Channel Based on Tick Volume Filtered Inflection Points on the Daily
Chart of Silver.
Source: MetaTrader 4