Description
The Occurrence of Consecutive Bearish Bars is best used in tandem with Consecutive Bearish Bars. The occurrence of the bearish bars - how often a market can string together a number of down bars with a lower close - can offer the historical likelihood that once a market begins a selloff, how often it will keep that downward momentum.
The ability of a pair to follow through, and more importantly how often it can do so, is a valuable piece of information for traders trying to capitalize on the momentum of a sell off. If the occurrence of bearish runs averages between one and three bars then the majority moves are quicker in nature with less likelihood for sustained trends.
Traders know that sustained trends cannot simply be determined by historical tendencies however, add the Movement of Consecutive Bars to this data and the range can be better determined and thus profit targets and/or stop losses can be placed more according to the volatility of the market and not a random spot on the price chart.