7. Confirmation—An Essential Second Part of a Signal

Confirmation comes in many shapes and sizes. Any signal (Western or Eastern, price, volume, or momentum) can provide either an initial signal or a confirming signal. Any variation among these indicators is possible, and under the hypothesis of relative correlation, the type of signal and confirmation is not as critical as the strength of the confirmation itself. The greater this strength, the higher confidence levels will move.

The hypothesis of relative correlation has been applied in previous chapters to the nature of reversal and continuation indicators. This chapter examines the same hypothesis as it relates to continuation. Here, you find some interesting observations about the nature ...

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