[Anonymous]

Originally Posted by BlowFish »

Oh btw PP you mentioned one more 'clue' that was not in your post, mind if I ask what? You aren't a closet indicator user

NO WAY. Bite your tongue. The concept is not mine to give. NihabaAshi did hint at it in his post about WRBs:

Originally Posted by NihabaAshi »

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

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

It is also beyond this thread as this thread is more about VSA than WRBs.

[Anonymous]

NewsFX,

I see you are running the KPcurrency system.

What I don't see is the bar you asking about. The bar with the text underneath looks like a SHAKE OUT or a test bar.

If you are asking about the bar with the arrow a 3 bars earlier, yes that looks like a test. Tests come in many forms. The Ideal test would have a narrow range, volume less than the previous two bars, close lower than the previous bar and close on its high. So while that bar is not ideal, it is a test nevertheless.

[Soultrader]

Here is an interesting chart from todays session. Notice new lows with lower volume. Hopefully some of you YM traders were able to capture the reversal movement.

[Anonymous]

Gaps are filled.

Interesting early morning action in the Euro.

Check out the chart below.

First we see a dark WRB followed by a GAP in price. Note the first candle with a double arrow. Notice that the volume is ultra high and the bar closes lower than the previous bar and off of its low. VSA teaches that this is a bar that may have buying within it. Now the next bar is key. It turns out to be a WRB, but the fact that the bar is up means the prior bar MUST of had some buying contained within it.

Now we move to the white WRB itself. Note that this bar creates a zone or range where we get a change in the supply/demand dynamic. We also know that the market does not like wide spread up bars on ultra high volume because of the possibility of hidden selling. In this case, however, the volume actually fell from the previous bar and is not ultra high.

We move to the next candle with a double arrow below. This is a doji that closes equal to the previous bar and in the upper portion of its range. Volume on this bar is Ultra high. There is SUPPLY in the market at this stage. Price moves down from here.

Next candle, closes in the upper portion of its range and higher than its open. Volume again is extreme. Here we have Demand showing itself. In other words, Demand is swamping Supply on this bar. SOMETHING HAS CHANGED. Notice that the next bar closes in its middle, has an equal close and volume drops off.

The Last bar closes on its high on volume that is less than the previous two bars. Although it does not make a lower low, this is a 'test' bar. The Smart Money is testing for supply and finds none. Now price is poised to go up and fill that gap.

[sds]

Originally Posted by PivotProfiler »

We move to the next candle with a double arrow below. This is a doji that closes equal to the previous bar and in the upper portion of its range. Volume on this bar is Ultra high. There is SUPPLY in the market at this stage. Price moves down from here.

Hello PP,

Nice post and analysis.
But I did not understand, the statement which I have marked in the Bold.

Could you explain, how did you arrive at this point that there is supply in the market?

sds.

[sds]

Originally Posted by PivotProfiler »

Gaps are filled.

Interesting early morning action in the Euro.

Check out the chart below.

First we see a dark WRB followed by a GAP in price. Note the first candle with a double arrow. Notice that the volume is ultra high and the bar closes lower than the previous bar and off of its low. VSA teaches that this is a bar that may have buying within it. Now the next bar is key. It turns out to be a WRB, but the fact that the bar is up means the prior bar MUST of had some buying contained within it.

Now we move to the white WRB itself. Note that this bar creates a zone or range where we get a change in the supply/demand dynamic. We also know that the market does not like wide spread up bars on ultra high volume because of the possibility of hidden selling. In this case, however, the volume actually fell from the previous bar and is not ultra high.

We move to the next candle with a double arrow below. This is a doji that closes equal to the previous bar and in the upper portion of its range. Volume on this bar is Ultra high. There is SUPPLY in the market at this stage. Price moves down from here.

Next candle, closes in the upper portion of its range and higher than its open. Volume again is extreme. Here we have Demand showing itself. In other words, Demand is swamping Supply on this bar. SOMETHING HAS CHANGED. Notice that the next bar closes in its middle, has an equal close and volume drops off.

The Last bar closes on its high on volume that is less than the previous two bars. Although it does not make a lower low, this is a 'test' bar. The Smart Money is testing for supply and finds none. Now price is poised to go up and fill that gap.

Hello PP,

As I said earlier, I am quite new and learning price action.

Could you commnet on my take on the chart you had posted.

Can I say that within the range of white WRB, there is demand and also there is
a selling pressure. If the demand had not there we would have got close at the
lower end of the candle.

At the later stage the white candle (which you have marked with double arrow)
might be indicating change in buying/selling pressure.

sds.

[Anonymous]

Nice Bullish White Hammer pattern.

Note that the white hammer line is inside the range of the Ultra Wide Spread Ultra High Volume candle.

When we take a look at the WRB, we see a down candle that has an ultra wide spread and closes on its low. There would appear to be heavy selling pressure in this bar. BUT THE NEXT BAR IS UP. If that bar was true selling, then the next bar would not be up.

In fact, if one looks at what price did after that bar it moved up. Clearly, the Professional demand created an upward drift in price. Simply, that WRB must of been a shift/change in the Supply/Demand dynamics of the market.

Now note the large dark Candle just prior to the shaded area. This candle closes on its low , closes lower than the previous bar and has volume less than the previous two bars. This is No Selling pressure. The close on the low fools the retail trader into seeing weakness. The lack of volume, however, is the real clue.

Price does move down a bit and create the bullish hammer pattern. Note that the hammer line itself is a VSA shakeout/test bar.

This is the "ideal" set-up. We see strength come in using our primary methods (VSA and WRB) and then we get a buy signal via our secondary method (Japanese candlestick patterns).

[Anonymous]

Originally Posted by sds »

Hello PP,

Nice post and analysis.
But I did not understand, the statement which I have marked in the Bold.

Could you explain, how did you arrive at this point that there is supply in the market?

sds.

Hi sds.

That particular bar is a form of a test. But note the volume. it is very high for a test. If there were no sellers then volume should be lower. Now this is confirmed as price moves down. So we have a failed test, which shows weakness(supply).