Wide Range Bodies or 'big' candles

[Neal]

Pivot, is there any parallel with WRB concepts and VSA patterns? For instance, VSA states that after a period of consolidation, pros may wish to 'Push Up Through Supply' on a high volume, wide range up bar that closes on its high. This would constitute a WRB. This quick move keeps some of the old longs from selling (anticipating more profit), triggers buy stops on those with shorts positions, pulls in the breakout traders to participate in the up move, and encourages the participation of the anxious trader who feels he is missing the move. One would need to watch the following price action to determine if the strength continues based on continued up bars, or weak, low volume down bars. Also, this pattern on a 5-minute chart could always be a VSA 'Up-Thrust' on a 10- or 15-minute bar based on the following price action, which would be a sign of potential weakness.

[Anonymous]

Hello guys and gals,

Here is a picture from another forum of a chart I asked NihabaAshi about. He graciously placed some comments on the chart. Take a look at it to see SOME of what is involved in WRB and Long Shadow analysis.

The technical definition of a WRB would be the largest body (open to close) of the last 3 intervals. The number 3, however, is not important. One could use any number as long as they stay consistent.

While WRB's can be used for exits (incorporated into an exit strategy), they should not be solely used in that manner.

Many things can be seen from WRB's:

* shifts in supply/demand
* volatility
* support/resistance zones
* volume proxy

Note how all of these things should be in consideration when looking to either exit a position or move a stop.

Conversely, note how all of these things should be in consideration when looking to enter a position.

With that said, I have never been a believe in one bar/candle analysis in lieu of the BIGGER PICTURE.

[brownsfan019]

Good posts guys!

As always, how a trader implements a strategy is up to that trader. I like what I am seeing with WRB's in my 'simple' form.

More testing required...

[Anonymous]

	Quote:	Neal
	Pivot, is there any parallel with WRB concepts and VSA patterns? For instance, VSA states that after a period of consolidation, pros may wish to 'Push Up Through Supply' on a high volume, wide range up bar that closes on its high. This would constitute a WRB. This quick move keeps some of the old longs from selling (anticipating more profit), triggers buy stops on those with shorts positions, pulls in the breakout traders to participate in the up move, and encourages the participation of the anxious trader who feels he is missing the move. One would need to watch the following price action to determine if the strength continues based on continued up bars, or weak, low volume down bars. Also, this pattern on a 5-minute chart could always be a VSA 'Up-Thrust' on a 10- or 15-minute bar based on the following price action, which would be a sign of potential weakness.

Yes and No.

VSA teaches that markets do not like wide spread up bars on high or ultra high volume. Wide spread means high to low. A WRB is from open to close. Thus if the open=low and close=high, then yes, but not necessarily so. Of course the open could not equal the low and the close could not equal the high and it would still be BOTH a wide spread bar and a WRB.

Note this is why one would also want to think in terms of Long Shadows.

As far as what is underneath the bar/candle itself, yes they are vary similar.

Underneath the widespread bar we have:

* shifts in supply/demand
* volatility
* support/resistance zones-Tradeguider does not speak about this in their public forums. Yet it is inherent in the concept. If Professional Money comes in on a wide spread ultra high volume bar, that bar is naturally a support or resistance zone. If they were buying, it only makes sense that they would not want to see price fall below that bar (resistance). If they were selling, it makes sense that they would not want to see price raise above the high of the bar (support).

In terms of "pushing thru supply", yes usually those bar would be WRB's. VSA's story is different. For VSA, the pros are pushing thru the area to keep people from selling, more so than keep new longs out.

WRB analysis would focus on the SHIFT/CHANGE of supply/demand dynamic without the focus on the Professional Money Manipulation. At least that is my understanding up to this point.

simply, WRB's represent among other things changes in the supply/demand dynamic. If the bar is wide spread on high or ultra high volume, that change in the supply/demand dynamic would also be noted by the VSA user. Not every WRB will be a wide spread bar. Every wide spread bar will, however, at least be a Long Shadow and thus still notable via both analysis camps.

[Anonymous]

Here's a combination chart.

Notice that VSA could be used to get the same information that WRB analysis is saying on the left side of the chart.

We see a wide spread bar on Ultra High Volume that closes off of its lows. For VSA, strength comes in on weakness. The next bar is key, it closes equal to the previous bar and closes in its middle and again has Ultra High Volume, this is climatic action/stopping volume.

In short, Professional Money is buying.

Now shift to the right side of the chart. The white hammer line is a VSA 'test' bar. It makes a lower low than the previous bar, closes on its high and closes equal to the previous bar. However, the volume is very high for a test. High Volume on a test means to expect price to come back down into that area. Price does indeed move back down after the short up burst that could be traded.

Form a WRB angle, we have the large WRB that creates the support/resistance zone where the bullish white hammer pattern is formed. We first see a shift in supply and demand then a bullish candle pattern.

[walterw]

Pivot : since studing volume here at TL, most probably I believe that this last post of yours are the most nice, easy and reliable pattern.... a WRB followed by a Big Doji on volume surge.... can I know whats that chart timescale ? cheers Walter.

[brownsfan019]

Nice chart Pivot!

Question - when do you know when to go with the trend and when to go against it? So far, it seems like the majority of charts posted have all been counter-trend trades.

[Anonymous]

	Quote:	brownsfan019
	Nice chart Pivot! Question - when do you know when to go with the trend and when to go against it? So far, it seems like the majority of charts posted have all been counter-trend trades.

Great question BF.

I cannot say much from the WRB perspective, as I am just beginning to learn it. However, we do see the large support/resistance zone on the left. Also note that there is a White WRB just prior to the formation of the bullish white hammer pattern. These would place the trade in the sub-group reversal meaning we are looking for the up move to be MORE than a counter-trend trade.

From the VSA perspective the situation is similar but with one more key piece of information. First, we see prices falling and then we get the large volume down bar with the wide spread. This is demand entering the market. The next bar is also ultra wide with a wide spread that closes in the middle. This is stopping volume.

With the close in the middle of the range on a bar with ultra high volume, we should see this bar as a transfer of ownership from strong hands to weak hands. So if the strong hands are buying the likely direction of the trend should be up. In other words, at this point we would be looking at a Reversal and not a counter trend trade.

Now the added piece of information comes on the hammer line. In VSA terms this is a high volume 'test' bar. With that amount of volume on a test bar, we would actually be expecting prices to come back DOWN and re-test that area. Therefore, if the market moves up , we do expect a possible move back down. This could be a counter trend trade therefore, depending on how far the market moves up.

But we do see lots of strength in the background (wide spread down bar and the doji bar), so it appears to be an up-trend trade where we may need to look out for some type of move back to re-test the high volume area.

So depending on one's perspective and trading style, this IS a trend trade (reversal). The more conservative VSAer might actually wait for the re-test of the supply or a no supply signal which means NOT trading what turns out to be a counter trend trade.

The WRB(primary) and candlestick (secondary) trader could take the trade as a reversal signal-not counter trend. AND be nimble enough to take the inverted dark hammer signal that shows up at the top of the counter trend move.

[Anonymous]

	Quote:	walterw
	Pivot : since studing volume here at TL, most probably I believe that this last post of yours are the most nice, easy and reliable pattern.... a WRB followed by a Big Doji on volume surge.... can I know whats that chart timescale ? cheers Walter.

Thanks. It's a 5 min spot Euro chart.

[brownsfan019]

Pivot - you'll have to keep us updated on this looks on the spot FX markets. I do not trade spot FX, but curious to know how you do there with these methods.