Profiting with Chart Patterns book

Volume Climax & Trend Structures
Here is a structure diagram for Volume Climax and Volume Trend. You can see on 
the Volume Climax patterns that price is reversing. Whether it is going up or down 
ahead of the volume pattern, price reverses in the other direction and that constitutes 
a Volume Climax. The illustration is annotated with gray tones around the area of the 
Volume Climax itself. 
Figure 3-25.
Volume Climax and Volume Trend Structure Diagram
At the very center of this illustration, you can see a Volume Trend pattern. We know 
it is a Volume Trend because price continued going down as volume reduced on the 
right side of the pattern.
The other thing to note about Volume Climax is that you typically do not have a target, 
except in the case of Volume Trend. Volume Trend typically marks the mid-point of 
a move, much the same way as a Measured Gap does. When you have a Volume 
Climax pattern, you know that it is a good pattern to trade but you do not know how 
far the move is going to be because there really is nothing relative to measure to.

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Chapter 3 Definitions, Structures, & Examples
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 Nirvana Systems Inc.
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Profiting with Chart Patterns
Volume Trend: ST Jude Medical.
This example of a Volume Trend occurred on ST Jude Medical (STJ). You can see 
that price is shooting way down and very hard with a lot of volume on that final bar 
at about $55. Then, volume begins to reduce on the back side of that spike. It takes 
two to four bars and is reducing in size, but the price is continuing to the downside so 
that constitutes a Volume Trend pattern.
Figure 3-26.
Volume Climax and Volume Trend Shown on the Chart for First Energy Corp.
As volume is decreasing, price is actually decreasing as well. That indicates that the 
trend is intact. This particular trade would have lasted from $53.30 to the exit at $51, 
giving us a 4% gain on that trade.
Figure 3-27.

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Chapter 
3 Definitions, 
Structures, 
& 
Examples
Profiting with Chart Patterns
3-28
nirvanasystems.com