As far as i know: FACTS and HIGH CHANCES from one statistics.
If we filter all the noise and mark out the facts, then we have what's really going on in a chart. So, what facts do we have in the USDWTI Chart?
1. a mesure of the big up- swing, copied to where i see, price has changed direction.
2. price left the orange down Fork at the U-MLH.
3. a overshoot of the previous biggest swing-range to the downside. And we know: where is a Action there is a Reaction.
4. support at the red upsloping A/R Set (...in fact, if you look close, you can see that this lower red A/R line is nothing more but a L-MLH ;-) )
5. price is very strong, left even the first WL (WL1)
6. the upsloping, thin red Fork - price made it above the CL = very strong!
7. CONFLUENCE: a) Overshoot Reaction, b) WL2, c) U-MLH of red uplsloping Fork.
All this is FACT....
...and it is valid, valid ONLY for the moment of the analysis.
OK - but what is it then good for, if we can't bet 100% on all the information and on the price target at the orange circle?
Well, it's good for a HIGH CHANCE to go up to the orange circle/confluence area.
And that what our job is all about, handle chance and risk.
Here you can find a free Basic course of Action/Reaction and the Forks: http://mytradingcoach.teachable.com
TradingView Blog: http://www.forktrading.com/tradingview-blog