Wide Range Bodies or 'big' candles

[waveslider]

I have been watching WRBs for over a month now. In my analysis, the majority of the time they are not a good entry or exit point.
Before getting anyone worked up I'll just point out the value I do think they have, and why.

My research is concluding that most WRBs will result in at least a short term range. The only case when this is not true is when an inversion is occurring in the market and a powerful move is underway (rare).

So a WRB will occur, and the market will travel (or attempt to travel) out of the range of that WRB. What happens next in a majority of cases is that price returns to test the WRB bar.

This testing would be the point of entry or exit if you are using this methodology. 2 cents.

[Anonymous]

	Quote:	waveslider
	I have been watching WRBs for over a month now. In my analysis, the majority of the time they are not a good entry or exit point.

You're half right.

WRBs do not make good entries. They are good precursors to a good entry point that occurs within the range of the body of a WRB.

WRBs represent changes or shifts in supply/demand. They are more like guide-posts to what is happening in the underlying dynamics of the market.

To understand why they make good exits, one has to have some understanding of why they make (set -up) good entries.

[NihabaAshi]

	Quote:	waveslider
	I have been watching WRBs for over a month now. In my analysis, the majority of the time they are not a good entry or exit point. Before getting anyone worked up I'll just point out the value I do think they have, and why. My research is concluding that most WRBs will result in at least a short term range. The only case when this is not true is when an inversion is occurring in the market and a powerful move is underway (rare). So a WRB will occur, and the market will travel (or attempt to travel) out of the range of that WRB. What happens next in a majority of cases is that price returns to test the WRB bar. This testing would be the point of entry or exit if you are using this methodology. 2 cents.

I hope you realize there are different types of WRBs.

Also, I've been using WRBs for +15 years and I myself don't use them as an entry signal all by themselves.

In analogy, its kind'uv like using a White Hammer Line as a Long signal without understanding the price action that occurred prior to the White Hammer Line.

That leads me into this question...can you explain what type of WRB your testing as an entry signal and/or show a chart example.

Further, when you said the following...

My research is concluding that most WRBs will result in at least a short term range. The only case when this is not true is when an inversion is occurring in the market and a powerful move is underway (rare).

So a WRB will occur, and the market will travel (or attempt to travel) out of the range of that WRB. What happens next in a majority of cases is that price returns to test the WRB bar.

The above is true only for one particular type of WRB and that particular type of WRB is not an entry signal.

It's a profit target and I can better explain it when you post a chart example.

For example, lets say the market is dropping and a particular type of Dark WRB (Open > Close) is produced in the declining price action.

Next, several intervals later you get a bullish signal...you can use the Open of that Dark WRB as a profit target.

Just keep in mind that some WRBs will attract the price action like a magnate to retrace the WRB while other WRBs will push the price action away in that there's price continuation away from the WRB into the range of a prior WRB s/r zone.

Regardless, using a WRB as an entry signal all by itself is not recommended and I myself don't even do that.

Last of all, your going in the right direction because your actually talking about Volatility Analysis and that's where WRBs begans to differ from each other.

However, I'm very curious at how your using WRBs via chart examples or specific details of your research because I strongly suspect your using them much different than I use them.

WRB's tells you something will soon happen and anything beyond that requires many years of experience with WRBs. Thus, they are a warning sign (precursors) that you should start looking for pattern signals.

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

[Anonymous]

	Quote:	PivotProfiler
	You're half right. WRBs do not make good entries. They are good precursors to a good entry point that occurs within the range of the body of a WRB.

	Quote:	NihabaAshi
	WRB's tells you something will soon happen and anything beyond that requires many years of experience with WRBs. Thus, they are a warning sign (precursors) that you should start looking for pattern signals.

This is key.

Another key element, and one that is a bit more difficult to test, has to do with the creation of the candle (bar) line. That is, Was the WRB created because of a news event? Is the WRB the direct result of an event in its sister market? For example, maybe you are looking at the emini S&P, and you see a WRB at 0830 on Wed. The actual event that caused the WRB was from the Oil market (inventory report).

Even if one does not use VSA, volume is also a key measure. Volume is activity. The more activity on the WRB the more significant is may be. (in the VSA thread I talk about low volume signals in the range of high volume bars). A WRB created with little volume is suspect and should not be traded/treated as one created on extreme volume.

So, as Mark echoed me, I will echo him: Not all WRBs are created equal.

[waveslider]

This is very good input, thank you!

I agree very much with everything said here, especially that WRBs are not entries or exits with out proper context.

Mark said:

"WRB's tells you something will soon happen and anything beyond that requires many years of experience with WRBs. Thus, they are a warning sign (precursors) that you should start looking for pattern signals. "

My interpretation and the reason for my comment was to point out exactly this:

What is happening (by definition) with a WRB is that:

1. Volatility is higher on this bar than the previous bars, and...

2. The volatility lasted throughout the bar (time frame or tick).

So, as I see it (particularly in the futures market), when volatility is introduced into a market and seen in the form of a WRB, the market will either run, or retest the WRB. What we are presented with is an important point of reference to analyze the situation with, and gauge the conviction of the market.


I have been using a little method that tick chart users may be interested in trying.

I have an 89 tick screen of YM. When more than (x) bars pass during the period of one minute, I get a signal. This is indicating to me that there is enough action in the market to create more than (x) bars per minute - it's another gauge of volatility. In a moving market tick bars will sometimes be created every few seconds.

I use this method as a filter for a WRB.

Here's a chart. Don't mind the yellow lines, they are static reversal times. The color of the WRB at the bottom is not material either. The blue lines illustrate how many bars per minute were passing.

Pivot - this seems to fall in line with you thinking when you said "The more activity on the WRB the more significant is may be."

There are a lot of WRBs on this chart, this is just one way to highlight those which occurred during an active market. The premise is that WRBs in an active market should be more important because of mass participation.

The way the market responds to volatility is how we as traders make (or lose) money.... I am still watching and learning the nuances of WRBs, but I believe they are valuable and worth watching. I have enjoyed this thread for the most part, thanks to those contributing!

ws

[brownsfan019]

wave - another interesting observation of your highlighted candles - many are also traditional candlestick analysis signals as well. Point being that if guys like me are trading those and if others implement something as you've done here, there are plenty of times when we are initiating a new trade at the same time, even though we got there in different ways.

Just an FYI if you are not using candlestick analysis, you may want to consider it simply b/c you've highlighted some great candlestick trades as well. Perhaps that's a good filter for you. Just an idea.

RE: WRB's for exits - I still stand by that these are good exit points. Keep in mind that my version is simple - when I visually see a big body, it's an exit point. These are not bulletproof by any stretch; however, for the way I trade, they work well. And I am only using visual WRB's for exits, they do not impact my entry criteria at all.

[brownsfan019]

wave - one question if I may - sorry to ask something that you explained, but how are the 'WRB alert' things at the bottom being formed? I don't need your exact numbers, just general ones are fine. I'm a numbers guy so if you can explain in # format, that would be great.

[waveslider]

Brown, they are set to the highest open minus close (absolute value) of the past 3 bars, which occur within a window where there are more than 2 tick bars occurring per minute.

[RAVIN]

My 2 cents worth

Anybody interested in developing strategies and tactics incorporating Wyckoff's principle (including VSA) and WRB would do well to get hold of "Techniques of Tape Reading" by Vadym Graifer & Christopher Schumacher.
What I have read on this thread reinforces the concepts in the book, which I should add has helped me tremendously in progressing from paper trading to real money. The exit strategy based on WRB , scaling out of multiple contracts with Support/Resistance is quite a revelation.

[ranj]

	Quote:	RAVIN
	My 2 cents worth Anybody interested in developing strategies and tactics incorporating Wyckoff's principle (including VSA) and WRB would do well to get hold of "Techniques of Tape Reading" by Vadym Graifer & Christopher Schumacher. What I have read on this thread reinforces the concepts in the book, which I should add has helped me tremendously in progressing from paper trading to real money. The exit strategy based on WRB , scaling out of multiple contracts with Support/Resistance is quite a revelation.

Hi Ravin,

do you mind providing some examples in chart form. I trade primary via VSA. In reviewing my successful trade, I noticed WRB involved in my various VSA entry setups.

Thanks
Rajiv