I would like to bring up this concept and get your opinion on this. Basing points is a way of figuring out when a peak or trough has formed before Dow theory would suggest (dow theory is late). In the book “Technical analysis of stock trends” it brings this up with 2 variations. In one of the variants there is the “3 day away rule” which means 3 bars must form by which none of their body or wicks overlaps the basing point candidate candlestick bar (this is the bar we think will form the peak or trough). In my opinion this the most important part of the book. Any thoughts on this ? Is this valid? I use it on 5 minute charts but the book talks about using daily data though it says it can be applied to any timeframe.