As it has turned out, this transaction was worthwhile to be made. This chart indicates that at the next to last candle a new channel comes into existence (black lines). Suddenly we can see that we have reached the channel boundary. We close the position at the level 1328. We now sell at the same price as it is the channel boundary. We have gained a figure (100 points). The balance makes +412 points. Everything went too smoothly. Therefore, it looks somewhat suspiciously. However, there is a very difficult flat before us – so many deposits already were lost because of it!

Those individuals who are very busy can work with orders.

For instance, let us examine the price inside the channel from this viewpoint. At the channel upper boundary, we put an order for the position opening during the next 6 hours. It is the order for sell at the price “A”. The stop-loss makes “A”+57points. Simultaneously we install an order for “buy” at the price “A”+57points, while the stop-loss is equal to the price “A”. It is necessary to develop the specular-reflected system at the channel lower boundary.

Unsolved contradictions in the deal opening within DeMark’s trading system

DeMark himself has pointed out drawbacks, possible mistakes and unsolved problem, inherent in his trading system. He has emphasized that none of the developed techniques can be regarded as perfect. It is quit

Opening/closing of deals in “Barishpoltz’s channels”

V. Barishpoltz’s technique is based on the work inside price channels.

1. Deals on “sell” are made to start from the trend slanted channel upper boundary.

2. Deals on “buy” are made to start from the trend slanted channel lower boundary.

According to V. Barishpoltz, the trading tactics is the following.

· A trader chooses a working currency pair (EUR/USD or any other with the corresponding “stops” and “constrictions (contractions)”.

· The chart period must be opted (e.g., 6 hours).

· No indicators are used.

· The lot under trading is arbitrary – but always constant.

· The possible (admissible) maximum number of losses is three, each making 57 points.

· The starting minimum deposit to be recommended is the margin required + 1800 (when one works with one lot of the size of 100000 of the monetary basis).

· The effectiveness is not less than 100% per month.

· The graphical layout is moving slanted channels.

The channels are charted on the basis of the three last extremes. A line is drawn through two minimums. The second line is drawn in parallel to the first one through the maximum. Otherwise, a line can be drawn through two maximums. Then the second line must be drawn in parallel to the first one through the minimum. That is, the lines are built on the basis of maximum/minimum values – i.e., a trader issues from candle shadows.

Not less than two candles after the point under examination can confirm that the latter can be identified as an extreme. Between two extremes must be not less than two candles. The only exception is that neighboring maximums/minimums can be located at the ends of one and the same long candle.

· When the channel bound is reached, the position must be opened towards the channel center. One may not open a position only against a distinct trend. A trader must judge by himself. Losses can be somewhat reduced in this way. At the same time, often one can miss the market reversal movements, potentially very profitable.

· In the opening, the “stop” makes 57 points.

· The goal is to reach the channel opposite boundary.

· When the distance from the price of opening makes 50 points (towards the direction of profit), the “stop” must be transferred into the point of opening. Further, at the distance of 50 points “constrictions (contractions)” are installed at regular intervals (at every 10th point). The “constriction (contraction)” at the distance of 30 points is possible. However, this yields just an insubstantial increase in the effectiveness. The “constrictions (contractions)” is always fulfilled towards the direction of the increase in profit but never in the opposite direction.

· If “the stop” has worked and the losses made 57 points, the position must be opened towards the opposite direction. The goal must be to regain 57 points. The “constrictions (contractions)” are based on the same principles.

· After the reversal the price can turn anew. It can reach the channel border from outside again. In this case, one must close the deal – even if at a loss. One must leave the market immediately,not waiting for a “stop”. The break in trading must make 2-3 waves. Surely, this condition is not obligatory. However, it gives to a trader the opportunity to relax. In addition, a trader can wait for the flat storm extinction (such development of the currency movement is typical exactly of the flat storm).

On the face of it, it looks rather complicated, doesn’t it? To help the reader to grasp this pattern, I have attached the corresponding illustrative examples. For instance, I have taken the chart on August, 2003 at random. Here I must mention that that month was very unfavorable for trading. In fact, one can say it was fatal for the market and trading.

There is the opportunity to draw the channel with the help of the points ##1, 2, 3. At the point #4 the “buy” price makes 1350. “The stop” is 1293.

At this level of the “stop” (1293) the resistance is realized. The damages make 57 points. The downward-directed position is opened, the “stop” being 1350. There appears “the White Dodge” (in the Chart it is marked with a blue dagger). Consequently, the channel is to be corrected according to new points (in the Chart they are marked with blue dots).

As it is mentioned above, after the reversal, the trend passes through 57 points. At the level 1236, one must “constrict” the profit from above. The distance makes 50 points from the current price. The principal goal is to reach the channel border. However, here the trader has not succeeded in doing this (just “slightly”). The position is closed at the price of 1170. The profit is 123 points. The total balance is +76 points.

The sell corresponds to the level 1205. The stop is located at 1262. At the same white candle occurs the “stop” with the upward-directed reversal. The damage makes 57 points. The balance is +19 pips. That is after one step onward, one makes two steps back. However, notwithstanding the poor situation, one must keep on smiling.

Further the trader must constrict the profit increasing continuously. After 50 points, the “stop” must be installed at the level 1300. Analogously one must work till the last candle. There the next minimum is processed. Thus, it becomes possible to plot a new channel (it is marked with the blue lines in the chart). As the deal is opened upwards, we will not “buy”. So, what will happen after this?

The price “is oscillating”. However, our “stop” in 50 points touches the candle only at the level 1375 (the point of intersection is ticked off with red). The profit makes 115 points. The balance is +134 points. Rather poorly, isn’t it? However, it is not the end yet! We still have heaps of time to gain profit (or to lose – of course, it’s a joke!). After two white candles, we draw a new channel with making use of red points. One should buy at the blue point at the level 1325.

The two white candles are like honey to our souls (rather inspiring). However, these candles don’t reach the channel bounds (the black line in the Chart). Consequently, the deal must be closed at the level 1375 (50 points below the maximum). The profit makes 50 points again. The total deposit has grown by 185 points. And this result is achieved just during the weekly trading. Isn’t time for a break and rest?

Seemingly, it would be worthwhile to “buy” at the “A” black candle. However, by now we have a new channel at our disposal (the blue one). At the boundary of this channel we buy at the price of 1305. The “stop” is located at the level 1248. The downward-directed candle doesn’t touch our “stop”. The white candle does not reach the “blue” channel upper line. We close the position with the “constricting stop” at the level about 1325. The profit makes 20 points. The sum total on the credit side is equal to +205. At the small candle “B” appears a new channel (the green lines). When this channel is broken through, we sell approximately at the price 1335. Our patience is proved to be rewarded. Now the position is closed with the profit 107 points at the price ~1228. The balance is +312 points. However, here we must buy at the same price because it is the channel boundary!

As it has turned out, this transaction was worthwhile to be made. This chart indicates that at the next to last candle a new channel comes into existence (black lines). Suddenly we can see that we have reached the channel boundary. We close the position at the level 1328. We now sell at the same price as it is the channel boundary. We have gained a figure (100 points). The balance makes +412 points. Everything went too smoothly. Therefore, it looks somewhat suspiciously. However, there is a very difficult flat before us – so many deposits already were lost because of it!

Those individuals who are very busy can work with orders.

For instance, let us examine the price inside the channel from this viewpoint. At the channel upper boundary, we put an order for the position opening during the next 6 hours. It is the order for sell at the price “A”. The stop-loss makes “A”+57points. Simultaneously we install an order for “buy” at the price “A”+57points, while the stop-loss is equal to the price “A”. It is necessary to develop the specular-reflected system at the channel lower boundary.

Unsolved contradictions in the deal opening within DeMark’s trading system

DeMark himself has pointed out drawbacks, possible mistakes and unsolved problem, inherent in his trading system. He has emphasized that none of the developed techniques can be regarded as perfect. It is quite

· When the channel bound is reached, the position must be opened towards the channel center. One may not open a position only against a distinct trend. A trader must judge by himself. Losses can be somewhat reduced in this way. At the same time, often one can miss the market reversal movements, potentially very profitable.

· In the opening, the “stop” makes 57 points.

· The goal is to reach the channel opposite boundary.

· When the distance from the price of opening makes 50 points (towards the direction of profit), the “stop” must be transferred into the point of opening. Further, at the distance of 50 points “constrictions (contractions)” are installed at regular intervals (at every 10th point). The “constriction (contraction)” at the distance of 30 points is possible. However, this yields just an insubstantial increase in the effectiveness. The “constrictions (contractions)” is always fulfilled towards the direction of the increase in profit but never in the opposite direction.

· If “the stop” has worked and the losses made 57 points, the position must be opened towards the opposite direction. The goal must be to regain 57 points. The “constrictions (contractions)” are based on the same principles.

· After the reversal the price can turn anew. It can reach the channel border from outside again. In this case, one must close the deal – even if at a loss. One must leave the market immediately,not waiting for a “stop”. The break in trading must make 2-3 waves. Surely, this condition is not obligatory. However, it gives to a trader the opportunity to relax. In addition, a trader can wait for the flat storm extinction (such development of the currency movement is typical exactly of the flat storm).

On the face of it, it looks rather complicated, doesn’t it? To help the reader to grasp this pattern, I have attached the corresponding illustrative examples. For instance, I have taken the chart on August, 2003 at random. Here I must mention that that month was very unfavorable for trading. In fact, one can say it was fatal for the market and trading.

There is the opportunity to draw the channel with the help of the points ##1, 2, 3. At the point #4 the “buy” price makes 1350. “The stop” is 1293.

At this level of the “stop” (1293) the resistance is realized. The damages make 57 points. The downward-directed position is opened, the “stop” being 1350. There appears “the White Dodge” (in the Chart it is marked with a blue dagger). Consequently, the channel is to be corrected according to new points (in the Chart they are marked with blue dots).

As it is mentioned above, after the reversal, the trend passes through 57 points. At the level 1236, one must “constrict” the profit from above. The distance makes 50 points from the current price. The principal goal is to reach the channel border. However, here the trader has not succeeded in doing this (just “slightly”). The position is closed at the price of 1170. The profit is 123 points. The total balance is +76 points.

The sell corresponds to the level 1205. The stop is located at 1262. At the same white candle occurs the “stop” with the upward-directed reversal. The damage makes 57 points. The balance is +19 pips. That is after one step onward, one makes two steps back. However, notwithstanding the poor situation, one must keep on smiling.

Further the trader must constrict the profit increasing continuously. After 50 points, the “stop” must be installed at the level 1300. Analogously one must work till the last candle. There the next minimum is processed. Thus, it becomes possible to plot a new channel (it is marked with the blue lines in the chart). As the deal is opened upwards, we will not “buy”. So, what will happen after this?

The price “is oscillating”. However, our “stop” in 50 points touches the candle only at the level 1375 (the point of intersection is ticked off with red). The profit makes 115 points. The balance is +134 points. Rather poorly, isn’t it? However, it is not the end yet! We still have heaps of time to gain profit (or to lose – of course, it’s a joke!). After two white candles, we draw a new channel with making use of red points. One should buy at the blue point at the level 1325.

The two white candles are like honey to our souls (rather inspiring). However, these candles don’t reach the channel bounds (the black line in the Chart). Consequently, the deal must be closed at the level 1375 (50 points below the maximum). The profit makes 50 points again. The total deposit has grown by 185 points. And this result is achieved just during the weekly trading. Isn’t time for a break and rest?

Seemingly, it would be worthwhile to “buy” at the “A” black candle. However, by now we have a new channel at our disposal (the blue one). At the boundary of this channel we buy at the price of 1305. The “stop” is located at the level 1248. The downward-directed candle doesn’t touch our “stop”. The white candle does not reach the “blue” channel upper line. We close the position with the “constricting stop” at the level about 1325. The profit makes 20 points. The sum total on the credit side is equal to +205. At the small candle “B” appears a new channel (the green lines). When this channel is broken through, we sell approximately at the price 1335. Our patience is proved to be rewarded. Now the position is closed with the profit 107 points at the price ~1228. The balance is +312 points. However, here we must buy at the same price because it is the channel boundary!

As it has turned out, this transaction was worthwhile to be made. This chart indicates that at the next to last candle a new channel comes into existence (black lines). Suddenly we can see that we have reached the channel boundary. We close the position at the level 1328. We now sell at the same price as it is the channel boundary. We have gained a figure (100 points). The balance makes +412 points. Everything went too smoothly. Therefore, it looks somewhat suspiciously. However, there is a very difficult flat before us – so many deposits already were lost because of it!

Those individuals who are very busy can work with orders.

For instance, let us examine the price inside the channel from this viewpoint. At the channel upper boundary, we put an order for the position opening during the next 6 hours. It is the order for sell at the price “A”. The stop-loss makes “A”+57points. Simultaneously we install an order for “buy” at the price “A”+57points, while the stop-loss is equal to the price “A”. It is necessary to develop the specular-reflected system at the channel lower boundary.

Unsolved contradictions in the deal opening within DeMark’s trading system

DeMark himself has pointed out drawbacks, possible mistakes and unsolved problem, inherent in his trading system. He has emphasized that none of the developed techniques can be regarded as perfect. It is quit

On the face of it, it looks rather complicated, doesn’t it? To help the reader to grasp this pattern, I have attached the corresponding illustrative examples. For instance, I have taken the chart on August, 2003 at random. Here I must mention that that month was very unfavorable for trading. In fact, one can say it was fatal for the market and trading.

There is the opportunity to draw the channel with the help of the points ##1, 2, 3. At the point #4 the “buy” price makes 1350. “The stop” is 1293.

At this level of the “stop” (1293) the resistance is realized. The damages make 57 points. The downward-directed position is opened, the “stop” being 1350. There appears “the White Dodge” (in the Chart it is marked with a blue dagger). Consequently, the channel is to be corrected according to new points (in the Chart they are marked with blue dots).

As it is mentioned above, after the reversal, the trend passes through 57 points. At the level 1236, one must “constrict” the profit from above. The distance makes 50 points from the current price. The principal goal is to reach the channel border. However, here the trader has not succeeded in doing this (just “slightly”). The position is closed at the price of 1170. The profit is 123 points. The total balance is +76 points.

The sell corresponds to the level 1205. The stop is located at 1262. At the same white candle occurs the “stop” with the upward-directed reversal. The damage makes 57 points. The balance is +19 pips. That is after one step onward, one makes two steps back. However, notwithstanding the poor situation, one must keep on smiling.

Further the trader must constrict the profit increasing continuously. After 50 points, the “stop” must be installed at the level 1300. Analogously one must work till the last candle. There the next minimum is processed. Thus, it becomes possible to plot a new channel (it is marked with the blue lines in the chart). As the deal is opened upwards, we will not “buy”. So, what will happen after this?

The price “is oscillating”. However, our “stop” in 50 points touches the candle only at the level 1375 (the point of intersection is ticked off with red). The profit makes 115 points. The balance is +134 points. Rather poorly, isn’t it? However, it is not the end yet! We still have heaps of time to gain profit (or to lose – of course, it’s a joke!). After two white candles, we draw a new channel with making use of red points. One should buy at the blue point at the level 1325.

The two white candles are like honey to our souls (rather inspiring). However, these candles don’t reach the channel bounds (the black line in the Chart). Consequently, the deal must be closed at the level 1375 (50 points below the maximum). The profit makes 50 points again. The total deposit has grown by 185 points. And this result is achieved just during the weekly trading. Isn’t time for a break and rest?

Seemingly, it would be worthwhile to “buy” at the “A” black candle. However, by now we have a new channel at our disposal (the blue one). At the boundary of this channel we buy at the price of 1305. The “stop” is located at the level 1248. The downward-directed candle doesn’t touch our “stop”. The white candle does not reach the “blue” channel upper line. We close the position with the “constricting stop” at the level about 1325. The profit makes 20 points. The sum total on the credit side is equal to +205. At the small candle “B” appears a new channel (the green lines). When this channel is broken through, we sell approximately at the price 1335. Our patience is proved to be rewarded. Now the position is closed with the profit 107 points at the price ~1228. The balance is +312 points. However, here we must buy at the same price because it is the channel boundary!

As it has turned out, this transaction was worthwhile to be made. This chart indicates that at the next to last candle a new channel comes into existence (black lines). Suddenly we can see that we have reached the channel boundary. We close the position at the level 1328. We now sell at the same price as it is the channel boundary. We have gained a figure (100 points). The balance makes +412 points. Everything went too smoothly. Therefore, it looks somewhat suspiciously. However, there is a very difficult flat before us – so many deposits already were lost because of it!

Those individuals who are very busy can work with orders.

For instance, let us examine the price inside the channel from this viewpoint. At the channel upper boundary, we put an order for the position opening during the next 6 hours. It is the order for sell at the price “A”. The stop-loss makes “A”+57points. Simultaneously we install an order for “buy” at the price “A”+57points, while the stop-loss is equal to the price “A”. It is necessary to develop the specular-reflected system at the channel lower boundary.

Unsolved contradictions in the deal opening within DeMark’s trading system

DeMark himself has pointed out drawbacks, possible mistakes and unsolved problem, inherent in his trading system. He has emphasized that none of the developed techniques can be regarded as perfect. It is quit

The price “is oscillating”. However, our “stop” in 50 points touches the candle only at the level 1375 (the point of intersection is ticked off with red). The profit makes 115 points. The balance is +134 points. Rather poorly, isn’t it? However, it is not the end yet! We still have heaps of time to gain profit (or to lose – of course, it’s a joke!). After two white candles, we draw a new channel with making use of red points. One should buy at the blue point at the level 1325.

The two white candles are like honey to our souls (rather inspiring). However, these candles don’t reach the channel bounds (the black line in the Chart). Consequently, the deal must be closed at the level 1375 (50 points below the maximum). The profit makes 50 points again. The total deposit has grown by 185 points. And this result is achieved just during the weekly trading. Isn’t time for a break and rest?

Seemingly, it would be worthwhile to “buy” at the “A” black candle. However, by now we have a new channel at our disposal (the blue one). At the boundary of this channel we buy at the price of 1305. The “stop” is located at the level 1248. The downward-directed candle doesn’t touch our “stop”. The white candle does not reach the “blue” channel upper line. We close the position with the “constricting stop” at the level about 1325. The profit makes 20 points. The sum total on the credit side is equal to +205. At the small candle “B” appears a new channel (the green lines). When this channel is broken through, we sell approximately at the price 1335. Our patience is proved to be rewarded. Now the position is closed with the profit 107 points at the price ~1228. The balance is +312 points. However, here we must buy at the same price because it is the channel boundary!

As it has turned out, this transaction was worthwhile to be made. This chart indicates that at the next to last candle a new channel comes into existence (black lines). Suddenly we can see that we have reached the channel boundary. We close the position at the level 1328. We now sell at the same price as it is the channel boundary. We have gained a figure (100 points). The balance makes +412 points. Everything went too smoothly. Therefore, it looks somewhat suspiciously. However, there is a very difficult flat before us – so many deposits already were lost because of it!

Those individuals who are very busy can work with orders.

For instance, let us examine the price inside the channel from this viewpoint. At the channel upper boundary, we put an order for the position opening during the next 6 hours. It is the order for sell at the price “A”. The stop-loss makes “A”+57points. Simultaneously we install an order for “buy” at the price “A”+57points, while the stop-loss is equal to the price “A”. It is necessary to develop the specular-reflected system at the channel lower boundary.

Unsolved contradictions in the deal opening within DeMark’s trading system

DeMark himself has pointed out drawbacks, possible mistakes and unsolved problem, inherent in his trading system. He has emphasized that none of the developed techniques can be regarded as perfect. It is quit

As it has turned out, this transaction was worthwhile to be made. This chart indicates that at the next to last candle a new channel comes into existence (black lines). Suddenly we can see that we have reached the channel boundary. We close the position at the level 1328. We now sell at the same price as it is the channel boundary. We have gained a figure (100 points). The balance makes +412 points. Everything went too smoothly. Therefore, it looks somewhat suspiciously. However, there is a very difficult flat before us – so many deposits already were lost because of it!

Those individuals who are very busy can work with orders.

For instance, let us examine the price inside the channel from this viewpoint. At the channel upper boundary, we put an order for the position opening during the next 6 hours. It is the order for sell at the price “A”. The stop-loss makes “A”+57points. Simultaneously we install an order for “buy” at the price “A”+57points, while the stop-loss is equal to the price “A”. It is necessary to develop the specular-reflected system at the channel lower boundary.

Unsolved contradictions in the deal opening within DeMark’s trading system

DeMark himself has pointed out drawbacks, possible mistakes and unsolved problem, inherent in his trading system. He has emphasized that none of the developed techniques can be regarded as perfect. It is quite difficult to predict the price movement in the market. Unforeseeable circumstances of all kinds can arise. DeMark states that events can develop according to the three principal scenarios.

1. There happens the breaking through the oppositely-directed TD-line. As the result, a new signal becomes generated. It contradicts to the original one. Under these conditions, a new breaking gives warning of the beginning of a new, opposite tendency. Coming it force, it substitutes for the previous one. Most often the tendency in price ceases to exist exactly in this way. The price guideposts, calculated with the help of this tendency, become nullified (abolished) – see Chart 1.30.

Chart 1.30. (For view the picture see notes in end of article)

One should pay attention to the following fact. The price guidepost is prescribed by the price projector (rated price level) #1 after the downward-directed breaking through the (A-B) TD-line. However, there is not enough time for it to be realized because the upward-directed breaking through the (C-D) descending TD-line of supply. This is why the price guidepost based on the downward-directed breaking through the (A-B) TD-line of demand becomes invalid.

Thus, he example given by DeMark does not indicate the beginning of a new, oppositely-directed tendency. It just clearly exposes drawbacks of TD-points and TD-lines, the notions of which are introduced by this author.

Masterforex-V Trading Academy approach to this problem

a). There is a flat because the lowest boundary A is not downward-broken.

b). Any flat can be either a figure of reversal (the double-triple bottom) or a figure of the trend continuation as well.

2. In the second case of the trend development, the signal for the TD-line breaking through is false from the very beginning. Otherwise, an unexpected event can abruptly disturb the balance between the demand and supply. This causes the price reversal immediately after the breaking. The situation becomes clear the next day after the event – when the first deal price is registered. Here the two variants are possible.

a). The TD-line in force is descending. At the moment of opening the price can go below this TD-line broken earlier. Further the falling down will be continuing. Otherwise, the price can jump downward at the opening. Thus, a gap in prices becomes formed. To the moment of closing the price will drop below TD-line.

b). The TD-line in force is ascending. The next day the price of opening/closing can rise above the ascending TD-line again. A gap in prices becomes formed. The prices keep on rising (see Charts 1.31, 1.32). Under these conditions, it is very doubtful that the price breaking is true. A trader is interested in diminishing the risk of losses conditioned by such an unexpected turn of events. For this purpose, one can give a stop-loss order the next day immediately after opening of trading.

Chart 1.31. (For view the picture see notes in end of article)

The prices have risen above (A-B) TD-line of supply. Notwithstanding this fact, the next day the price at the moment of opening is lower than the price of closing at the day of breaking. Further the price keeps on decreasing. It falls lower than the descending (A-B) line. The price dynamics of this kind nullifies the breaking.

Chart 1.32. (For view the picture see notes in end of article)

The next day after the breaking through the (A-B) TD-line of supply, the prices have stopped falling. The next day the price at the moment of opening has turned out to be at the previous level. The price further ascending movement above the (A-B) line has started from that previous level. Thus, the price breakout has turned out to be invalid.

Drawbacks of the trend slanted channel classical theory

1. Any technique of plotting slanted channel lines is rather subjective. That is, two slanted channels, plotted by two traders at the same chart, for sure will never coincide with one another. T. DeMark was the first to point out to this specificity.

2. E. Neiman has enumerated a cluster of drawbacks, inherent in the classical theory of trend slanted channels. Such disadvantages are the following.

· The direction of the trend in force contradicts the trend direction predicted by the analytical methods (especially under the condition of the trend reversal).

· When a trend is detected, it is difficult to estimate the price of opening issuing just from a single general figure. In the given case, lines of support/resistance are helpful.

· Trend lines and models, plotted in different time intervals, can also entail contradictive conclusions. For instance, the weekly- and daily trends can indicate themselves as the “bull” and “bear” ones, respectively.

The third group of weaknesses of the classical theory of trend slanted channels is conditioned by the following fact. The 3rd point of the slanted channel makes the 5th wave according to Elliot theory – i.e., it the point of beginning of the market reverse movement.

D. Swagger has pointed out to the 4th group disadvantages of the trend slanted channel theory.

Surely, trend channels and corridors are helpful. However, often their significance is exaggerated. One can easily overestimate the trend line reliability if such lines are plotted post factum. They often lose the sight of the following circumstance. In the process of development of the “bull”/”bear” trend, trend lines often have need for correction. That is, sometimes the trend line breakout can serve as an early (advanced) warning of the tendency reversal. At the same time, there are equal chances that the breaking can result just in the trend line correction. For instance, Chart 3.11 represents by itself the continuation of Chart 3.4 for the next 2 months. In Chart 3.11, the lowest trend line can be plotted issuing from all the data available. The upper line is the continuation of the trend line from Chart 3.4. The latter is drawn on the basis of price data available before June. The breaking through this line in June has not caused the tendency reversal. This breakout just has made the trend line correction necessary.

Chart 3.11. The ascending trend line correction – Silver; June, 1993. (For view the picture see notes in end of article)

Chart 3.12. The ascending trend line correction – EUR/USD; June, 1991 (For view the picture see notes in end of article)

Chart 3.14. The descending trend line double correction. Continuous futures per French bond index at MATIF exchange. (For view the picture see notes in end of article)

As one can see, Chart 3.14 is the continuation of Chart 3.13 for the next 4 months. In Chart 3.14, the lowest trend lines are copied from Charts 3.6, 3.13. They correspond to the trend lines before May and June, respectively. The breaking through these lines has not caused the tendency reversal. This breakout just has made the trend line correction necessary. This example demonstrates that sometimes the trend line must be subjected to correction