Assume the first price bar for congestion has been established. Subsequent bar(s) close right on the PLDot. How does this affect the defining moment for a new trend beginning. For example if the close on dot is the second bar, does this mean that the first bar stilll counts towards a new trend potentially and that for all purposes the bar that closes on dot is a null point and essentially is not given consideration
To continue the example, two more price bars close on the side of the first congestion entrance bar close with however many "neutral" closes intermixed. Does this mean that the first congestion bar and the following two closes on the same side perhaps several bars later count toward defining a new trend? I've seen this often and although I know that the important issue is to define the first bar, contextual time periods and monitoring time periods for the congestion area along with the dotted line and block levels, I'm still curious as to how to handle these "neutral" (my term of course) closes.
M.S.
Congestion
Re: Congestion
yes, well, if it were me I'd make a judgment as to direction, and call the close as being on one side or the other given that information. It would likely be a clear and reasonable decision. I would take into account the "dot refresh area" and absent a close on one side or the other of the actual PLdot I would probably give the vote to the side on which the dot refresh area existed... in other words the side on which the live dot exists, thus a foreshadow of direction. I would not regard it as a null bar unless something strange was going on, such as the exchange closing down, or something like that.
But to tell you the truth I have rarely encountered this in a situation when I didn't know what to do intuitively. If I were programming an automated system I'd have to come up with an answer, and I think it would be the "live dot" answer given above.
But to tell you the truth I have rarely encountered this in a situation when I didn't know what to do intuitively. If I were programming an automated system I'd have to come up with an answer, and I think it would be the "live dot" answer given above.
Re: Congestion
Sort of unlikely but maybe of academic/theoretical interest...
Bar 1 = congestion entrance bar, closes on other side of dot
Bar 2 closes *exactly* on the dot.
Bars 3-4-5-6-7-8- etc close *exactly on the dot...
No trend occurs, are all congestion action bars.
Bar 1 = congestion entrance bar, closes on other side of dot
Bar 2 closes *exactly* on the dot.
Bars 3-4-5-6-7-8- etc close *exactly on the dot...
No trend occurs, are all congestion action bars.