The first thing I thought, before I even started looking at the data, was how often the sequence is TST – that is, the current move, retracement, continuation. Simple! and with the general “laws” of the market, this is very expected and therefore not very useful. So I started to break the wave components down a bit.
The most common continuation wave type is TST (Trend, Spring, Trend). The most common reversal wave type is TE (Trend, Expand). There is a second short continuation wave type: TEE (Trend, Expand, Expand).
So TST and TEE wave types make up 66% of all continuation wave strings, while TE wave types make up 42% of all reversals. wow!
Naturally, I went to investigate how these numbers change over the course of a wave move developing
Kinda cool to note, although not nearly good enough as it’s own edge because the numbers float around 50%. I think the probability changes more as a result of price rather than as a outcome of time (length) of time not taking out a price level, although this does still lend support to investigating what is happening in these waves. Do these two elements work together? Or does one simply explain the other? In the case that they are relatively independent, wave lengths and time can sometimes offer spots to target certain levels.
Currently price is on wave 6 (TSFTS F/T) and floating around the 50% mark. Hmmm.