Into The Unknown

I have identified 3 kind of turns.

All 3 require price having moved outside the range.

The V-bottom at 0.995 belongs to the first group.

Second Color usually means price printing a high/low outside the range but closer than 25 pips, then a high/low in the 25/50 band and never going beyond this zone.

This left shoulder turn gets confirmed by price going back to the overbought level, then printing a Head at the zero level.

This is another Second Color example. More than 1/2 of the turns belong here.

The 3 of the same Color has two different variations.

Var A: The Taper

The taper reaches a signal depth, but fails to carry on with the trend: i.e. no more lower lows / higher highs. This example belongs here and not with the 2nd color ones due to price having a hard time coming back into the range at first. This is not a common one at all.

Var B: The Divergence

The last down move ended this way. It went green 3 times and after finishing with the measuring leg, printed a divergent leg that got really close to the oversold end of the range.

Another example. Price went magenta 3x. Copy and paste from above. After 3 colors of the same, this has the higher likelihood.

Practice questions:

Which category does this example fall under? Second Colour/Taper/Divergence?

3 examples at once. Which one was the Taper? What were the other two?

Have you seen a 2-color top? Could this be turned to 3 of the same taper / divergence? Why not?

Color understanding

The gray means close proximity to the E121 hourly. I don’t usually count it as a color, but it does play as a color change as a second color.

The magenta is 64-100 pips away outside the range.

   if (High[i]>NBEU[i]) {ObjectCreate("Zingende"+DoubleToStr(i), OBJ_TEXT, 1, Time[i], 58); ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrTeal);
         if (High[i]>NBEU[i]+250*Point && High[i]<NBEU[i]+500*Point) ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrRed);
         if (iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,25,i))>iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,60,i+26)) && High[i]-iMA(symbol,0,484,0,MODE_EMA,PRICE_MEDIAN,i)<640*Point) ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrGray);
         if (High[i]>NBEU[i]+640*Point && High[i]<NBEU[i]+1000*Point) ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrMagenta);
      }
   else if (Low[i]<NBED[i]) {ObjectCreate("Zingende"+DoubleToStr(i), OBJ_TEXT, 1, Time[i], 34); ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrSalmon);
         if (Low[i]<NBED[i]-250*Point && Low[i]>NBED[i]-500*Point) ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrGreen);
         if (Low[i]>iMA(symbol,0,484,0,MODE_EMA,PRICE_MEDIAN,i)) ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrGray);
         if (Low[i]<NBED[i]-640*Point && Low[i]>NBED[i]-1000*Point ) ObjectSetText("Zingende"+DoubleToStr(i), CharToStr(110), 18, "Wingdings", clrMagenta);
        }

Zingende means singing