Freshness
Description
This is the last of the main factors (we will also discuss corelation, which is the optional factor, later) and one of the most important. It refers to the location of residual energy areas. Did they form mostly as a reaction to previous residual energy areas? Or did they form in relatively "fresh" areas, i.e. areas where price hasn't been consolidating for a very long time? If they are merely reactions, they aren't 100% fresh, so they will be lower probability than fresh areas. I tend to make an exception with demand areas that show up as a reaction to prior supply areas (or vice-versa), because lots of traders tend to setup limit orders there after the breakout, so that will be fresh energy (similar to the support turning into resistance / resistance turning into support concept in classic technical analysis).
Scoring
A fresh area will get a score of 5, while the other areas get zero.
Examples
An important tip:
High range candles wipe most of the residual energy in their range clean! This means that the first consolidations to form in the range of such candles are considered fresh.
Description
This is the last of the main factors (we will also discuss corelation, which is the optional factor, later) and one of the most important. It refers to the location of residual energy areas. Did they form mostly as a reaction to previous residual energy areas? Or did they form in relatively "fresh" areas, i.e. areas where price hasn't been consolidating for a very long time? If they are merely reactions, they aren't 100% fresh, so they will be lower probability than fresh areas. I tend to make an exception with demand areas that show up as a reaction to prior supply areas (or vice-versa), because lots of traders tend to setup limit orders there after the breakout, so that will be fresh energy (similar to the support turning into resistance / resistance turning into support concept in classic technical analysis).
Scoring
A fresh area will get a score of 5, while the other areas get zero.
Examples
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http://toplessons.in/sites/default/f...freshness2.gif
An important tip:
http://toplessons.in/sites/default/f...freshness3.gif
High range candles wipe most of the residual energy in their range clean! This means that the first consolidations to form in the range of such candles are considered fresh.