If I see, for example, an extended downward climate (red circles), broken up by one or two unconfirmed, blue circles, would that be considered less probable of a trade than one where there are clear separation between trends?
I’ve attached an example. I know the methodology just has me looking at the latest circle, but would a more advanced trader say the small blue circles are not a clear enough change of climate and, as a whole, looks more like a very over extended downward climate?
You make a good point and sometimes the thin dots simply show us a pause in a trend.
If you were to count the thin dots as part of the same trend, the question is how many counts as a pause vs how many counts to begin a new trend?
The way the methodology is used is simply to use the newest thick dot and sustainability figures together for your reference and it certainly works as a way of using the technology.
However, as always, there is nothing wrong with testing for example if there’s 1 thin dot in between 2 confirmed downtrends, what happens to the liklihood of the trade? Or 2 dots, or 3 etc…Or is there a difference in probability if there’s a thin dot or a thick dot in the “middle” of a trend?
Ultimately, and what’s great about trading, there could many answers, and everything can be tested and data gathered to prove it. If you’re noticing that a lot, I would suggest keeping a track so you have real data to show if there’s a correlation.
Overall, using the methodology as it is should be enough but nothing wrong with making tweaks to improve some numbers for your trading 🙂
Happy to expand on a Sharpening session coming up!