> For the complete documentation index, see [llms.txt](https://docs.candelacharts.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.candelacharts.com/investing/risk-adjusted-performance/tail-ratio/confluences.md). # Confluences Tail Ratio Confluences The Tail Ratio is a powerful context tool that pairs exceptionally well with traditional directional indicators. * **Trend Following**: Use the Tail Ratio to validate trend strength. A strong uptrend accompanied by a Right-tailed (Positive Skew) reading suggests the trend is supported by robust upside momentum and is structurally sound. * **Mean Reversion / Reversals**: Look for divergences. If price is making new highs but the Tail Ratio shifts to a Left-tailed (Negative Skew) regime, it warns that underlying downside risk is building, potentially signaling an impending reversal. * **Volatility Breakouts**: When price breaks out of a consolidation range, a corresponding surge in the Tail Ratio can confirm the direction of the breakout has strong structural backing. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation by asking a question. Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters: ``` GET https://docs.candelacharts.com/investing/risk-adjusted-performance/tail-ratio/confluences.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.