[NihabaAshi]

Hi All,

I just want to post some commentary about WRB Analysis before this thread gets to far or before its misinterpreted.

First of all, its something I developed while in High School (1980) when I did work (hand drawn charts of daily and weekly price action) for friends of the family that were floor traders at the exchange.

It involves many things that's nothing anybody has heard about but it does make sense of all these things when they work together:

* Support/Resistance Zones
* Shifts in Supply/Demand
* Trading GAPs
* Changes in Volatility

Many other things from entry to exit including Profit Targets.

Simply, there's no reinvention of the wheel here...just something that puts the puzzle together into something that's understandable.

WRB Analysis (primary) has absolutely nothing to do with Japanese Candlestick Analysis (secondary).

As mentioned many times by me at another forum in a thread called Trading Hammers (revisited)...don't use Japanese Candlestick patterns or anything else (including WRBs) without understanding the price action in context.

Therefore, TheBramble comments are dead on and should be apply to Japanese Candlesticks, WRBs or anything else involving technical analysis.

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.

(Note: Volatility is arguably a better replacement of volume and resolves some of the problems asssociated with volume analysis).

With that said and moving into using WRBs as an exit strategy.

PivotProfiler mentioned something that needs more clarification.

I scale out of my trades while other times I exit my entire position at the same time (no scaling) for whatever reason.

The only time I use a higher time frame after the first WRB for scaling out is if the entry signal (pattern signal) occurred as either a trend continuation signal or occurred as part of a market seasonal tendency (cycle).

Simply, most of the time I use the same entry signal interval as my exit signal interval (example - I went Long via a pattern signal on the 3min chart...I exit via WRBs on the 3min chart).

Thus, the price action involved with your entry signal has impact on how you manage your exits.

This reason alone is why two traders using different entry method but using WRBs to exit...will exit at different WRBs.

Therefore, the price action involved with a WRB has impact on how you manage the exit in the WRB.

Further, traders using different strategies may exit a WRB different.

For example...

* You can exit a WRB upon the close of the interval.
* You can exit a interval as soon as it becomes a WRB even though there's still time remaining in the interval.
* You can exit at WRBs that cross over a s/r level.
* You can exit at WRBs that form within s/r zones (there's a difference between levels and zones).
* You can exit WRBs to only breakout out of congestion.

Thus, before analyzing someone's use of a WRB as an exit method...

You must understand their entry method into the trade and this will prevent getting tunnel vision about the WRB.

Therefore, to properly use WRBs is to have a relationship with the Entry Method and the WRB.

Another way to look at it...the WRB is not an exit signal. The exit signal is the price action itself while the WRB is a big alert to check and see if this is the price action you like to exit within (ex. exiting WRBs that appear at s/r levels).

WRBs are like warning signs that something is about to happen (continuation of the trend or reversal of the trend) as in a big shift in supply/demand.

WRBs should be telling you its time to make a decision...to exit your position or to stay in your position.

Therefore, don't make the mistake of viewing WRBs exclusively as an exit signal or that the move is going to reverse against you.

To do such is to say that your ignoring the price action in which the WRB is forming within (tunnel vision).

As noted by brownsfan019 when learning about WRB's...

My version of WRB/Big candle exits is rather simple.

This is true about anything when you first began learning something in which you don't know exactly how to apply it or still exploring the basic concepts about it.

In other words, my WRB Analysis today is far more advance than the simple WRB Analysis I was using in the 80's.

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