I was pretty excited late last night, bordering on exuberance. Perhaps it was the Holiday spirit still lingering around.
So today, I put something together, and I started testing my kinetic energy theory. Here is my initial result.
Maybe I can add a few filters for trends and time constraints. I know many will look at the chart, and say it is not good, but I feel very happy about it. It is exactly what was in my head, and I made it happen in code. The potential is there, and all I need to do know is refine it on paper. Then I can put it into an EA. Trading begins on colored candle itself. I had to double check it to see that it doesn't repaint.
Obviously, it does very poorly in trends, and there will be a series of painful losses as we are trying to pick tops and bottoms. That is countertrend trading. However, as I explore the idea, it is similar to trend following because you are always putting out feelers to find something good. The principle of cutting losers short and letting winners run still remains the same.
The real question is: Will you trade the signals that are on this chart? I know I will, and that is the difference.