Waves 2.1, differing h values

I’m not sure that the question of which h value is correct is one that can be solved. Still, it’s important to know which one is ‘in control’ and which one is acceptable to use. To answer this question, I think you can get around it by using some form of the “wave mutation” and “HTFs”.

Outlining the thought process:

1.There is no such thing as a swing that isn’t, at a minimum, h-transient for the h value of 1.

2.Of course, trading this way is extremely if not straight out impossible. Therefore, you have to find a high enough h value (such as the one that offers the 97/3 ratio) that creates good sized swings.

3. The issue with using higher h values is the existence of the double top and bottoms. Or to be more specific, the existence of double tops and bottom occurring within the h zone and thus creating a swing that perhaps should be considered, but is not due to it’s speed. (yes I know RB deals with this =p )

4. Solving this using standard TFs stems from the question of knowing which TF is in control, or which h value is in control.

5. One can, of course, disregard the bump in the double top/bottom as the statistics would already account for not trading these opportunities, but it can be a bit dicing when attempting to trade away from an H zone before it has completed. It seems to be that the most passive/safe way to play with this trade style is to pick mid trends, rather than the ends. Of course, this creates the issue of safe exit and safe SL ratio..

6. If I picked an h value of 40, I believe roughly 20% of the transient bars will be next to another bar of the same wave type (aka, 2 top t-bars without a bottom t-bar between them). However, it seems that even if I lower the h value to 20, I would still end up 20% of the bars behaving like that. So, I don’t think I can find locate a t bar, and then safely declare that price must create a t bar of the opposite direction before returning to the first direction. See why that would be useful though? Actually to be honest, I only tested 2 numbers and ended up with the ~20% figure, perhaps there is something more to this idea.

7. Yet, even with this fact, it still must be true that for some double top/bottom, there exists an h transient bar between them for some value of h>=1. I think that if I plotted all the h=40 t bars and the h=20 t bars, a lot of the double tops/bottom created by the h=40 would be “solved” by the h=20. How many? I don’t know…

 

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