Another request I got, this time about simple rejection bars.
Here’s the scenario: On 1 hour data, if price touches a big number but doesn’t close past it, what are the odds someone could squeeze some pips out of it by trading away from the zone?
More specifically, if price makes a bullish move and the high is above a big number (using EU, 1.3500) but the close is under this price (say 1.3490), is it wise to short? What’s the color of the next bar?
Snippet of filtered relevant “trades”:
O/H/L/C on the left, the color of the bar next to it (so this test is looking at the color of the next row). The trade decision is in the short/buy column, and each of these is split in the next to columns to show what the result of executing a trade after the trigger is created is.
Doesn’t appear to be an edge, which I didn’t expect there to be. Nice statistic to know, perhaps useful in some other form.