The number is referring to the timing of the fill bar – 1 is the first fill bar that appears, 2 is the second fill bar that appears, etc. Probability that fill bar holds as support/resistance.
Kind of interesting to note that the 3rd-5th bars have a higher probability to hold than the first two.
Number of bars it takes for the fill bar to be broken:
This one was kind of a bummer, I hoped that it would be much more clustered towards the lower count because it would map the overall map much more clear. As it stands though, I take it as a sign of no edge. Remember that markets have to move in order, so a completely uniform distribution is a very rare event. If they were more clustered, it would mean I could take this approach to the market:
-New wave occurs (still have to distinguish between the starting point of the new wave vs mini retracement in bigger wave)
-Wait for over/under fill
-If overfilling, wait for high of bar to be taken out, likely in next or 2 bars later (note: not the case here)
-Short
The probability to break is decent, but if I want to have an accurate measure of when it will break, I’d like to to wait until at least an 80% probability, which is 5 bars. To me it’s just too late, because 5 bars vastly increases the probability that the wave has already ended because if price is not going down (breaking the bar) then it’s going up and extending the wave.
Overall, there is a 86% (233/271) that the first over/under filled bar will be a continuation bar. In up moves, an underfilled bar will lead to at least 1 more higher high before the termination of the wave and vice versa for shorts. aka, there is a 14% chance that the first bar that is extreme filled is actually the extreme itself (done this before). It continues that there is a 66% chance that this bar is broken on the other wise (further pullback). So the most likely flow of price in these structures is to make an extreme, pullback, and continue, sort of like a mini-swing within the swing. These are more tradeable points, rather than the map given by the overall swing.
These are kinda cool to look at, may be some extra things to pick up and test.
LGtrades 