Right side trading

Given all the time that has been spent on the left side of the chart, I think it’s only fair to dedicate some time to the right side of the chart. One of the obvious differences is that we can always see the left side of the chart, while we never know what’s on the right side of the chart. I see the left side, and particularly left side transient bars, as significant bars. That is, given a certain value of h, the left side doesn’t print anything (and isn’t capable) until it has reached a price that it has not been to for h bars. Thus, it’s a significant bar. On the other hand, I consider the right side of the chart, or right h value, to be a momentum indicator. I may or may not have said this before. If you know a bar will not be returned to on the right side, you know that momentum is strong enough in a particular direction. To be obvious again, if we knew what anything on the right side of the chart looked like, we would be set and we never know what could happen. Yet, there are still some numbers that we can create and perhaps trust from our good friend history.

First, a quick idea. There are 4 raw DNA points we get for every bar. OHLC. If you’re a TCD trader, your repertoire expands quickly with combinations. However even transient traders (is that what we are now?) can gain extra data points to keep in mind: Left top, left bottom, right top, right bottom. Each of these points is a number referencing how long ago it was touched (up to a limit), and marks the bar as special from the one next to it. Combining these with TCD “Fusion” I think would be a completely original idea and yet to be explored by any trader. I might attempt it if i can figure out what I need from it 🙂

Now back to right side transience. Using H1 and 120(1 week) as the period, we can learn something quite interesting from right side h.

1

 

Question: If the current bar we are looking at is a momentum bar (that is, if there is some price p contained within the range H-L of the bar that will not be returned to in the next h bars), what is the probability that either the bar before it or the the bar behind it will also be a momentum bar?

Answer: ~84.5%

Seems high doesn’t it?

By comparison, only 5% of all bars are momentum bars. I think this clearly shows that momentum exists in some form.

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