Wide Range Bodies or 'big' candles

[brownsfan019]

Wave - thanks for the comments, a few of them made sense to me. :p

I am a candlestick trader by trade. I came across WRB's here on TL and have provided as much feedback as I can here and the conclusion I came to today was that perhaps I was trying to fit a square peg in a round hole.

I'll provide some updates as the days go by.

[waveslider]

Hi,
My main point was just that you don't do a trailing stop on a range trade. You do a trailing stop on a trend trade. So if you bought at the bottom of the range and exited on a WRB inside the range - you did the right thing. Don't worry about missing out on the trend part that came later, there was a trend entry for that move anyway!
Sorry if I wasn't too clear.

[Anonymous]

BrownsFan;

I think you are making a big mistake.

Forgive me, but I think you were on to something an now you are straying.

You should back up and ask yourself this:

"AM I A TRADER WHO WANTS TO EXIT AT AN OBJECTIVE OR BE STOPPED OUT?"

If you are going to exit at a target, then you must not say "look how much MORE the market moved in my direction if............"

You got out. Your trade is done. No time for regrets or coulda', woulda' or shoulda's.

If you do not want to learn to read price action to determine whether the WRB is an exit type or a continuation (trail stop) type, then simply exit and go to the next trade. I know that you have seen the value WRBs give. Why go back just becuase you don't want to "add on more layers of complexity"? Especially when the layers are due to the fact that you have not answered the above question fully in your own mind.

There are repeatable patterns in price action and volume or multiple timeframes or what ever to help you decide if you are going to exit or stay. Mark can comment on many of these.

Now if you want to take an easier approach, determine ahead of time if you are a trailing stop type of trader or a profit target trader. Choose one, stick with it and no regrets. And the most sure thing I can say; if you choose to trail you will find many examples where exiting at the WRB will make better sense, and if you choose to take profits, you will see many examples of the market continuing on way past your exit.

If it (trading) were easy, than eveyone would be doing it.

My friend, stick with the WRBs.

[brownsfan019]

PP - I appreciate the comments as always. You are right, trying to figure out exactly how to exit is a difficult task. As you said, some days WRBs work well, other days staying the trade longer is better, etc. etc. And especially after a day like yesterday where my initial long entry was nice and to extract a small portion of the move, that can bit you in the butt to say the least.

As I said, I'm not 100% sure that WRB's work well enough into how I trade to be comfortable with them. There are 2 glaring issues surrounding WRBs for me:

1) WRB does not appear when trade moves in your favor. You can patiently wait, but if nothing shows, nothing shows. There needs to be a plan B in place. And what that plan B is, I'm not sure.

2) WRB takes you out prematurely. There are a variety of ways to work around this as well, but as you said PP, some days taking 3 WRB's will work, some days 2 and some days the first WRB is all that you can get... I've yet to find a good screener for when to take the first WRB and when to take more than one.

I think the WRB's have very strong merit and consideration if it can work with your trading or become your trading. I have only been using WRB's as an exit method, so perhaps that is part of the issue at hand. I don't have the desire to learn an entire new method like VSA purely for the purposes of using that in conjunction with WRB's purely for exiting purposes. That seems like a lot of work and hours of study in an attempt to refine the exit method. If I was just starting out and looking for something to grab a hold of, perhaps that could work.

[NihabaAshi]

	Quote:
	PP - I appreciate the comments as always. You are right, trying to figure out exactly how to exit is a difficult task. As you said, some days WRBs work well, other days staying the trade longer is better, etc. etc. And especially after a day like yesterday where my initial long entry was nice and to extract a small portion of the move, that can bit you in the butt to say the least. As I said, I'm not 100% sure that WRB's work well enough into how I trade to be comfortable with them. There are 2 glaring issues surrounding WRBs for me: 1) WRB does not appear when trade moves in your favor. You can patiently wait, but if nothing shows, nothing shows. There needs to be a plan B in place. And what that plan B is, I'm not sure. 2) WRB takes you out prematurely. There are a variety of ways to work around this as well, but as you said PP, some days taking 3 WRB's will work, some days 2 and some days the first WRB is all that you can get... I've yet to find a good screener for when to take the first WRB and when to take more than one. I think the WRB's have very strong merit and consideration if it can work with your trading or become your trading. I have only been using WRB's as an exit method, so perhaps that is part of the issue at hand. I don't have the desire to learn an entire new method like VSA purely for the purposes of using that in conjunction with WRB's purely for exiting purposes. That seems like a lot of work and hours of study in an attempt to refine the exit method. If I was just starting out and looking for something to grab a hold of, perhaps that could work.

Hi,

Maybe I can help or shed some light on this issue.

First of all, using WRB to enhance your exit strategy needs to be within the context of WRB s/r zones from the prior trading days.

In addition, trying to use only the current developing WRB as an exit signal while ignoring the past (most recent WRB's) for the sake of keeping it simple will backfire and cause difficult trading.

Therefore, you need to understand the price action of the prior WRB's (your screener) to help with your exit strategy of today.

Lets discuss your Emini ES 5min chart of May 30th Wednesday.

First, you mention you had some size on the trade and wanted to know what reason would be in place to tell you to keep some contracts beyond the WRB you exited at.

Yes, there's a big reason and it has a story to help you understand the remaining chapters in the book.

WRB s/r zones contain a wealth of information about key changes in supply/demand especially when they produce swing points that cause very strong market movements.

In fact, when such occurs, you need to keep those key s/r zones on your chart to prevent missing riding a big train beyond your normal profit target (this is also answer a prior question you had on this issue).

Now scroll back on your ES 5min chart back to May 24th Thursday because that's a big trend (down) day with its swing point around 10am est...same time the 10am est New Home Sales report was released.

That key White WRB s/r zone on May 24th Thurs had a body of 1526.75 - 1530.75 while the high price of the interval was 1532.50

However, the big news of that week was not Thursday...it was the bearish tone to the speech (Madrid teleconference) by the former FED Chairman Greenspan on May 23rd Weds around 2pm est because it was the talk of the town after the market closed on that day.

Check your 5min charts on May 23rd Wednesday around 2pm est and you'll see a Dark WRB with its s/r zone 1532.00 - 1530.25

Yep, that same WRB s/r zone on May 23rd Wednesday had an enormous impact on the WRB s/r zone on May 24th Thursday and it pact a wealth of info about the change in supply/demand.

Lets now fast forward a little and the Emini ES is range bound for May 25th Friday and May 29th Tuesday on very low volatility in comparison to the price action of May 24th Thursday.

Going forward some more, May 30th Wednesday the Emini GAPs down at the open to start the day @ 1513.75 thanks to the bearish price action in Europe's futures in reaction to Germany economic reports.

However, soon after the open, within the next 10mins the market begins to climb upwards and produce some bullish pattern signals around 0936am est via the 3min chart (Bullish Engulfing) and it formed after bouncing off the simple s/r zone produced on ES 5min chart via a Dark Hammer line and White Hammer line back on May 25th Friday between 1005am - 1010am est...

A s/r zone (Long shadow that was once a WRB) that help demand show up off the lows on both of those range bound trading days of May 25th Friday and May 29th Tuesday.

With all that info above that should have been mapped out prior to May 30th Wednesday (knowing your entry and exit prior to the trade)...

Regardless where your long entry was in the morning of May 30th Wednesday, it merit holding some remainders of your ES position into that WRB s/r zone of 1526.75 - 1530.75 because the market has already proven on May 24th Thursday that the former FED Chairman Greenspan can still produce key changes in supply/demand.

My point with all the above, trading is like a book and to understand today's price action you really need to understand the prior chapters.

Therefore, its ok to keep it simple but today's WRB's are interconnected to the WRB's of the prior trading days especially when key changes occurs in supply/demand within those prior WRB's and these are price areas that the big boys don't forget until the next one ocurrs.

Lets now take one more step forward, take a look at today's (May 31st Thursday) intraday lows for the Emini ES.

Do you see the price area (s/r zone) it bounced off around 1:30pm est via a volatility spike ?

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

"Volatility Analysis is a doorway to consistent profits."

[Anonymous]

	Quote:	brownsfan019
	PP - ... As you said, some days WRBs work well, other days staying the trade longer is better, etc. etc. And especially after a day like yesterday where my initial long entry was nice and to extract a small portion of the move, that can bit you in the butt to say the least.

Not quite what I said. What I was trying to convey is that if you choose A, there will most assuredly be times when B will seem like the better choice and vise versa.

successful traders accept this and move on.

Simply, you can not keep chasing exit methods based on the last trade.

Your first posts in this thread were raves about WRBs. What has changed? More over, do you believe the market has changed since then?

	Quote:	brownsfan019
	1) WRB does not appear when trade moves in your favor. You can patiently wait, but if nothing shows, nothing shows. There needs to be a plan B in place. And what that plan B is, I'm not sure.

Again I have problems with this statement. There is always a WRB. It is the candle with the body (open to close) greater than the three (3) prior bodies.

If the three prior candles were dojis, then the next candle does not have to have much of a body, but it is a WRB nonetheless.

	Quote:	brownsfan019
	2) WRB takes you out prematurely. There are a variety of ways to work around this as well, but as you said PP, some days taking 3 WRB's will work, some days 2 and some days the first WRB is all that you can get... I've yet to find a good screener for when to take the first WRB and when to take more than one.

Again, not what I said.

I keep saying that I like to trail. It takes all this doubt and consternation out of the equation.

If you want to choose based on the formation or location of the WRB whether to exit or trail, more work is involved. Just look at the above post.

As I believe in VSA, I would say you can look at the background but confine that background to what can be seen on the chart at that time. In other words, without regards to the WRBs two days ago. Assuming of course, you are trading a short time frame for day trading.

Where Mark and I agree :

1. What created the WRB-news event
2. Price action leading up the formation of the WRB.
3. Location of the WRB. Is it within the Support/Resistance zone of another Significant WRB. Here again, I would not be looking back as far as Mark might look.
4. Use of a higher timeframe. More of a move can be captured by increasing the timeframe and exiting based on the WRBs on this higher level.

Where we part:

1. Volume. Is there high volume but not Ultra high volume. You judge WRBs visually, certainly you can do the same with volume bars.
2. Tops to the left. If there are tops to the left, then a WRB thru this area may in fact be PUSHING THRU SUPPLY. If the pros are willing to absorb the supply at this level, then higher prices can be expected.
3. Effort candles show that the market wants to go one way or the other. The appearance of an effort candle which is also a WRB may signal continuation of the move and trend strength. So why exit?

Now look back at the 5 min chart you posted. Just seeing the action (Tops) to the left and knowing the volume would have been enough to know to stay in.

[brownsfan019]

Hey guys,

Lots been going on here tonight I see.

I'll delve into this more tomorrow sometime, but I think after reading Mark's post (the WRB guru) it's clear that to fully utilize the WRB's in the context as Mark and/or PP do, more work and analysis is involved.

Now, let me explain a few things before any chastising commences - I've been trading for years now. Exits have always been my crutch. As PP said, one day method A looks great and the next day it looks like junk. I get that. I stumbled across WRB's through this forum and elitetrader. It peaked my interest. Since I am a simple guy when it comes to trading (or at least try to), I thought I would take a look at these WRB's and see if I could use them in a way that I could utilize them. Spending another year of my life studying WRB's and/or VSA is not an option. In the end, I was simply looking to supplement or replace my existing exit strategy. And as mentioned, some days the visual WRB's worked like a charm and other days like Wed left me very frustrated.

Call it a learning process in motion if you will. I'm not normally one to take something I read on a forum to heart and put it in motion, but I did here with my own little version of WRB's. And it's now apparent to me that unless I am willing to put forth the time and effort as Mark has to study these, it's going to be a mental battle. A battle on days like Wed where I was long at 1518 and closed around 1535.... That's a difficult mental battle to hae when your entry was in hindsight incredible, yet your P&L did not reflect that. I understand that some days there won't be much to take when you want bigger moves.

As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

OK, this post has gotten longer than I thought. Off to watch the Cavs hopefully beat the Pistons and then to bed.

[BlowFish]

	Quote:	brownsfan019
	Hey guys, ---snip-- As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

Just a couple of things.

Firstly If you want to catch those 20 point moves you'll probably end up being stopped out of a lot more on those 2 pointers. It will require different approaches and more importantly knowledge when to apply each. Sometimes you will apply one where the other would work and vice versa. I guess this is one of the reasons people take half off and ride half.

Secondly (and this is something I really empathise with as I am prone to it too) don't over intellectualise. Sure view it as a game but like any game you can not win every hand/round/match. As I say, I speak from bitter experience but trading can actually be very simple once you get an idea of market 'strcture' and mechanics. I think we are all prone to overcomplicate things.

I'm not sure if I ever mentioned Eddie Toppels book "Zen in the Markets". You can easily read it in a couple of hours (which I do now and then if I feel I am over intellectualising or looking for 'perfection'). Its his contention that it is the ego at the back of all this.

Sure push yourself but there comes a time where a better read of the charts provides diminishing returns compared to looking inwards and improving things there. Well thats my case anyway.

Cheers,

btw there are some real pearls of wisdom in the last dozen or so posts. This really is a quality venue.

[brownsfan019]

	Quote:	BlowFish
	I think we are all prone to overcomplicate things.

You said it Fish! In my pursuit of the perfect exit strategy, I opened a can of worms.

As I mentioned above, WRB's should merit your attention if you are willing to dissect them as Mark has. I was taking page 1 of the book and applying it. That didn't quite work.

Perhaps when I am having one of those moments you talk about Fish, I will revisit WRB's but this thread will serve as a quick reminder to me that based on me and my trading, using the 'visual' WRB as I have tried to here, didn't always go as planned. That's not necessarily a bad thing, it was just a bit of a mental issue for me. Others may find it works just fine for them.

[brownsfan019]

I wanted to respond to some of the great posts here recently since a few have made a very conscious effort to contribute...

From walterw:

	Quote:
	Hi Brown , I see how clearly you manage your exits with WRB`s, my question and intrigue is what entry criteria do you have to Open a position... would like to learn if its not compromising (no obligation to share)... cheers Walter.

Walter - while I have never given the exact entry method I use, I have shared more on this forum than anywhere else. There's a couple charts of mine with actual screenshots floating around here somewhere.

I know some might say just share everything, but to be perfectly honest, I guess that's the business side of me - not wanting to divulge the exact recipe that's taken me years and thousands of dollars to construct.

From pivotprofiler:

	Quote:
	Then again, I know you are looking to keep it simple. But what could be more simple than letting the market tell you when to get in and when to get out?

I agree... Simple is good. And since I am terrible at trailing stops, a set profit target once again is at the forefront.


From pivotprofiler:

	Quote:
	BrownsFan; I think you are making a big mistake. Forgive me, but I think you were on to something an now you are straying. You should back up and ask yourself this: "AM I A TRADER WHO WANTS TO EXIT AT AN OBJECTIVE OR BE STOPPED OUT?" If you are going to exit at a target, then you must not say "look how much MORE the market moved in my direction if............" You got out. Your trade is done. No time for regrets or coulda', woulda' or shoulda's.

Pivot, you may be right, only time will tell.
I think after looking at this more this week, I am definitely not a trailing stop trader. That's for sure. A set profit target is the next logical strategy then.

From pivotprofiler:

	Quote:
	Choose one, stick with it and no regrets. And the most sure thing I can say; if you choose to trail you will find many examples where exiting at the WRB will make better sense, and if you choose to take profits, you will see many examples of the market continuing on way past your exit.