Bear Zone & Bull Zone rules:
Once price had engaged the 1-time-plus stretch zone from the mean (by making two highs above the upper guard rail or two lows below the lower guard rail), the rules become rather simple.
To reverse the direction, the counter-party becomes put on a timer.
The chronometer starts counting up from the last fresh hourly high/low to 9.
The chronometer gets a reset upon a new 22-sample high/low.
So, what is this counting good for?
For figuring the perfect entry for a continuation and knowing when a Wave 1 was printed and price direction reversed for good.
Let me explain.
Once you have printed 9 on the counter, you most likely have seen the resistance level already. Your aim is a lower low – trail stop advised, for there is directional rotation in these zones: people get put with the bag.
If Mr. Maroon gets hit within 9 hours, the game is over with.
This upside example shows that a continuation support was not made successfully. The second set of numbers are there because I am looking for two highs above the guard rail within the last 10 samples.
Self explaining shot about how you figure the target of a Mean reversion.
Draw in the five waves up for a mind practice and see if you got the Wave 2 trickling back through Mr. Maroon.