Why isn't Sentient Trader confirming troughs/peaks?

When I see a lot of hollow diamonds in my analysis I tend to think to myself "This looks like a very unreliable analysis!". I asked David Hickson and he gave me a surprising answer!

David, when I have an analysis on a chart I want to be able to trust that analysis. Sentient Trader will place hollow diamonds below troughs that it's less certain of, then those diamonds will gradually be filled up as the criteria for confirming those troughs are fulfilled. Correct?

Yes Sam, when a trough or a peak in ST is "confirmed" that is indicated by the troughs being plotted as solid diamonds, or the peaks as solid triangles!

Oops! Of course, troughs or peaks. So the better the analysis the less hollow diamonds there will be I suppose?

The process for confirming a trough or peak varies according to the analysis situation. However it is not a cause for alarm if there are many "unconfirmed" troughs or peaks because ST actually applies a greater amount of detail to the analysis process on the unconfirmed troughs and peaks. And so when troughs or peaks are unconfirmed it means simply that ST is performing a more detailed (and thorough, hence probably better!) analysis on the recent time period.

Ah. So lots hollow diamonds are actually a positive sign! There must be some sort of drawback though?

The only disadvantage to having a long recent period of time with unconfirmed troughs and peaks is that the analysis process will take longer. The process of confirming troughs and peaks starts with the most recent trough/peak of the dominant cycle (which can be determined by viewing the Analysis Summary panel). If you have a lot of data then the dominant cycle might be a very long one, and there might be a long period of time with unconfirmed troughs/peaks. ST will try to confirm troughs and peaks after the most recent trough/peak of the dominant cycle, but it will only do this if it is absolutely convinced that those troughs/peaks can be confirmed, because of the fact that the more thorough analysis process is applied to the unconfirmed troughs/peaks, and confirming them prematurely could result in a poorer analysis. Although it might be more comforting as a user to see confirmed troughs/peaks on your charts, you should remember that unconfirmed troughs/peaks are providing a more thorough analysis!

Thank you David!

That's no problem! You should probably write this down somewhere...!