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Hi CW, To be honest I have never bought into the idea that WRB bars are S/R. It is something I have challenged on occasion but don't really have the energy to argue about. (OK lets say to 'discuss vigorously'  ). The reason why they very often appear to 'work' in this regard is because they are pushing through the real S/R!!!! You get a much much more accurate zone by trying to identify that. The reason they sometimes do not work is when they are moving through 'air' (a place with little or no previous S/R). To identify this S/R you need to look farther to the left.
If you look at DB's blog in the section where he does an analysis for the following day you will see how he approaches it, there are also people doing it in the price action thread. It's uncanny how accurate it usually is. I'd really urge anyone with an intrest in identifying S/R take a look. I know you seem to have a great handle on things and I certainly enjoy your posts, but I sincerely think it could turbo charge your identification of S/R. |
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First I do not want a long drawn out discussion over this either, but I think you and others are missing some key points.
1. Tom does not look at the open. He does talk about taking low volume signs with the range of high volume (usually wide spread) bars. It is my contention that
if he looked at the open, he would refine that to with the body of a WRB or Long Shadow. Simply, WRBs and Long Shadows narrow the focus from simply "the range".
2. Mark uses the term Support/Resistance Zones so I do as well. Yet, to me WRBs represent three (interlocking) concepts:
* Changes in the supply/demand dynamic. This is technically NOT the same thing as support and resistance. Simply, All support and resistance areas are areas of changes in supply/demand, but not all areas of change in supply and demand are at support and resistance.
* A defined area to look for entries. Again this is the low volume sign within the range of the high volume idea. Of course, with up thrusts it could be high volume sign within high volume areas.
* Profit target zones.
I have a hard time looking at the previous chart and NOT concluding that something happened on the appearance of the WRB. As evidenced by roughly 90% of the following price action has been contained with its body. Again, that area may not be support or resistance; although price seems to be respecting the boundaries. But that area is clearly an area where a shift of some kind has and continues to take place.
***edit****
It should be noted that I have never mentioned WRBs in relation to being swing points or continuing price action. With the former, the more traditional ideas of support and resistance do come into play. These are important to Mark and I am working on these areas. But again, it still comes down to what happens within the body of the WRB.