Each type leads to one of 3 other types. Total of 6 types, plus dom/non-dom, makes this one set out of 12.
These ratios still don’t tell me about the reversal probability, but rather about the continuation probability and when price may not have to continue. I think I definitely need a new TCD completely to try to capture reversal moves. Distinct Vega or Vega prime maybe? hmm..
The way I’ve been using this is pretty simple; if the current wave ratio is in an extreme in terms of the histogram, then price should make a new extreme on the chart.
I find the 0-140 ratios to work much better than the 100-500 ratios, and since the dom and non-dom are roughly flipped, I pretty much always have a ratio that is in the favorable range that I can use. The histogram for the 100-500 range is much more spread out, and harder to be accurate.
I still need to look at how these ratios play out in the charts, but my gut hypothesis is that ~.84 ratio suggests that price is a bit over-extended (being in a ~5% extreme), but needs to “fix” the ratio to be in an acceptable range. These numbers are averaged over the length of the wave, so this would mean that if price wanted to create a “correct” ratio, it would need to make a new extreme to print a new number, but only after some time, in order to drag the average down. In other words, the expectation is pullback or pause, followed by new extreme.
We’ll see how this one plays out. If these ratios really work like this it would be awesome. Not quite what I was originally aiming for, but still big.
Not quite there. Some good opportunity for profits if I wait for a good R:R probability which I did get. but the map did not complete..
Edit2: I’ve been studying the ratios over wave time. Oh boy does the rabbit hole go deep.