Wide Range Bodies or 'big' candles

[RAVIN]

Hi, Rajiv
Would require many pages and numerous charts to illustrate the strategies and tactics from the book which has nearly 33 detailed examples, they are a combination of the charts and comments posted by PP and BF

[TinGull]

I'd been getting into WRB as S/R lately after reading and reading and reading stuff from Pivot and NihabaAshi...just wanted to post a picture perfect chart from just now...



Beautiful how the WRB provided resistance. Really is quite amazing after looking through tons and tons of charts today, seeing how that happens time and time again.

[CandleWhisperer]

Hello BF nice posts. Some of my response will be in this thread and some in the vsa thread. I hope this can breath new life into a worthwhile thread.

I have used the term WRB support/resistance zone, as PP and Mark have. To be sure, there are many times when you will find the body of a significant WRB acting as support or resistance. However, I think a more appropriate term of the area is "METHOD ENRTY (and exit) FOCUS ZONE".

"Method entry (and exit) focus zone". No matter how one enters: moving average cross, ADX, red bars become green, CCI, VSA, or candle patterns the body, or zone, of a significant WRB is the ideal place see one's method give a signal. To be sure, VSA, with its focus on supply and demand is in my opinion superior to use than say a moving average cross system. WRBs represent possible shifts in supply and demand so any other method that is like-minded would be better suited then some, but all would work.

It is very easy to see a WRB appear and then (1) place a line at the body's open and a line at the body's close or (2) write the numbers for the open and close on a post it. It really isn't difficult and many traders would actually be able to simply SEE the zone on the chart. Simply, determining the zone is not difficult, what is more so is determining what a significant WRB is.

Yet, that is not all that hard. First and foremost one needs to ask was the WRB connected to a news release? Clearly, a WRB created on the Jobs release means more than a random non-news generated WRB. WRBs are about price action. Understanding what cause the WRB is a necessary condition to understanding price action.

Volume is another key. A large dark WRB on very high volume with the next bar up means there was some hidden buying going on. This is what VSA tells us, but once you know just that, one can now focus on what happens within the body moving forward irrespective of VSA. But again, we can move a out of the VSA and just think the more the volume the more we need pay attention.
Something you probably already do with respect to candles and such.

Another way to determine what WRBs constitute significant deals with volatility. The chart I posted shows a volatility spike which would have me already predisposed to look to fade it. Had it been a volatility breakout, then I would been looking for a continuation trade...

(This is the part I hate. I can't say much about this aspect. I like WRBs and want to share all I know. I hope much of what there is to know can be found in my posts and those of others on this thread and the VSA thread. I would rather an interested person NOT spend money to learn this stuff. With that said, I am bound not to disclose some things.)

With that said, Volatility in some ways also equates to candle size. A white WRB larger than the previous 5 white WRBs probably means something. This is just an idea to play around with, but the point would be set a number and stick with it to take out arbitrariness going forward.

BTW, If one looks at the chart you posted of my chart, it is clear that you would of gotten in on the second trade prior to my entry signal-the first test. So for those who are concerned with getting in first, WRB zones are not the panacea.

[brownsfan019]

CW - nice post, and welcome to the WRB thread.

I like how you explained a few things. Really what stood out was the WRB based on a NEWS event. Makes perfect sense. I'm sure Mark mentioned it, but it never hit home for some reason.

Questions if I may:
1) Do you ONLY play WRB's based on news? Why or why not?
2) What timeframe(s) do you look to see a WRB on?

Using WRB's based on news could be a little puzzle piece (for me at least).

[CandleWhisperer]

	Quote:	brownsfan019
	CW - nice post, and welcome to the WRB thread. Questions if I may: 1) Do you ONLY play WRB's based on news? Why or why not? 2) What timeframe(s) do you look to see a WRB on?

Leave it to BF to ask the tough questions. LOL. Great questions really.

Your first questions says "you" and the answer is no. However, I would state that "one" CAN only play WRBs based on news. This depends on personal style and instrument(s) traded. Some markets are more predisposed to news than others. I should mention that news includes things like a speech at a luncheon by the Governor of the NY Fed. Or the Chairman's testimony to the house. So we are not simply talking about Jobs reports, GDP, trade figures, housing starts and the like. If one is trading corn, a speech by treasury secretary Paulson might not matter so much. So if you, or others, are wondering if there are enough news events for an active trader, it really depends on the instrument and of course the day.

News events are a good basis to start with. As I said in the previous post, there are many types of significant WRBs and some do overlap. I like high volume WRBs even if they are not news related. There are also some WRBs that are based on volatility patterns that I like. In truth, even at my early stage of development in this area I can see that one is probably better off limiting what WRBs one wants to focus on.

By the way, I want to make a quick point about news events that some may be thinking. Suppose there is a GDP report at 0830 NY time and you are trading off a 3 minute chart. If a WRB is formed during the 0836-0839 interval and not before, than that is the news related/caused WRB. Also, and this gets into question 2 a bit. If there is not a WRB on the 3 min but there is one on the 15 minute, it would be expectable to look for entry signals on the 3 but within the range of the WRB on the 15.

Currently I am only focused on one timeframe: the 5 minute.

[CandleWhisperer]

This is in response to something said in the VSA thread.

WRB analysis is independent of candlestick analysis. I and many others use candles because of the picture of price action they present. As such, we have no idea, nor do we care, about the names of the candles or patterns associated with them. Interestingly, some advanced candle traders like BrownsFan and James don't care about names either.

If you have a bar chart with open, high, low, close information, then you can use WRB analysis.

WRBs involve supply/demand, volatility and Price Action.

Simply, calling WRB analysis, Candlestick analysis shows a lack of understanding of the former.

[CandleWhisperer]

Been wanting to post this for awhile now.

As far as WRB patterns go, I really like the volatility breakout pattern. Another pattern I like is one I have "discovered" on my own. At least as far as I know, I did.

I call this the WRB Gap Sandwich. Basically, we need a WRB (white or dark) followed by an actual price gap (hint) and then another WRB. We also need to look at the candle prior to the first WRB and the one after the second WRB. This price action creates the Supply/Demand Delta zone.

In the chart below, the left side shows the WRB Gap Sandwich followed by a no demand within the key area. Short signal generated. Traditional gaps are important and represent changes in supply/demand. This is doublely so with the appearance of the two WRBs.

The second thing to note is the bottom reversal. The first bar happens to be a WRB, but that is not important for this post. What is important, is once we get to this point our entry signal zone created by the WRB Gap Sandwich is now a good profit target zone.