[TheBramble]

Apologies if I’m stumbling into an area that’s been discussed in greater detail in other threads, but personally I’d be really wary of attempting to interpret a single candlestick. Effective candlestick analysis requires the context in which it has developed for any reasonable assessment to be made. There’s also the vital issue of volume. Candles or bars, volume is key to unlocking the probabilities of development.

In relation to this specific WRB being discussed, all we are looking at is price action over one period in which the balance of commitment has shifted from one end of the spectrum to the other – for that period. If the move is in favour of your existing trade, I presume you wouldn’t be still using it as an exit indicator? And if the bar is moving against you, providing it hasn’t hit your protective/trailing/initial stop, why would you want to take it as a valid exit criteria?

You will often get corrections against your prevailing trade direction that will move 50-63% against the previous high/low. Whether this occurs as one WRB or over a number of consecutive periods is largely irrelevant all other things considered (volume pattern etc.). WRB as more likely to take the steam out of the subsequent few periods price action than it is to herald a reversal.

You comment that you’re getting smaller profits using this method which is understandable, you’re not letting them run. If by using this method you’re also getting fewer losing trades then I suspect it may be an issue with the underlying system itself rather than this bolt-on exit criteria.