A few comments from James_gsx very informative post:
WRB's
On the smaller timeframes that I have watched the WRB's on, there are MANY instances where you see what James has here - a big WRB and an immediate retrace of some/all of the WRB.
Click here for more info on WRB's if you are not quite sure what they are or how to read them.
I personally view the WRB trade as this - when you see a WRB, look for a candle signal (as illustrated by James here) to look for a reason to go against that WRB that just appeared. The premise is simple - when you have a big move in a short period of time, it can be difficult to sustain that move (esp. during the regular day, i.e. outside of econ news).
ENTRIES/EXITS
As I discussed in
this thread, part of the key here is to elaborate on whether entry/exit criteria was met. The reason I mention this is that I do not see a loser in this chart on the 2nd trade:
On the 2nd trade (1st one failed), my entry criteria would not have been met. Just an FYI.
Same thing on this hammer:
JUST seeing what I see here, I would be ATTEMPTING to get long.
Note - this is in part to the smaller timeframe that I am looking at (1 minute). One the 1, I want a little extra confirmation to get into the trade.
Good analysis James. It looks like your charts on a 5 minute interval so the next question is watching lower and higher timeframes to see if there are better opportunities. I know the 1 minute sounds like a very short time (and it is) but the risk/reward moves strongly in your favor. The catch being that you will take some 'chop' trades that otherwise would not be present on a bigger timeframe.