[TheBramble]

Originally Posted by brownsfan019 »

Question for Mark, Pivot and others using WRB's - how do you define what a WRB is? I've read a few things the last few days and some say purely a visual thing and others have a defined formula.

One of those things that's going to be different strokes for different folks, but where the Open-Close range is no less than say 95% of the High-Low range. That would do it for me.

({[(H-L) - ABS(O-C)] / (H-L)}*100) <= (100-95) {or whatever your preferred percentage is}.

[TheBramble]

Originally Posted by brownsfan019 »

Bramble - Your comment - "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." First, I am comfortable with my entry method, so there is no 'issue' with the underlying system. Second, if I am getting fewer losing trades by trading this way, how is that a problem? By exiting on WRB's in the very simple fashion I have looked at, the vast majority of my trades are profitable and even when a stop out is taken, my stops are usually not more than 7-9 ticks on the YM.

'Issue' was a bad choice of word, my apologies. You mentioned lower profits per trade when adding the WRB as an exit criteria and I obviously saw a connection between the two events.

Nothing at all wrong with fewer losing trades. Gets my vote every time. But if fewer losing trades do not compensate for the lower profits on winning trades (i.e if your W:L improves but your P:L decreases) then there would have been no point adding in the exit criteria. From what you're saying this isn't the case at all and your overall profitability on this system has increased. Which is great.

I think that was the point I managed so badly not to make the first time, And probably this time as well...

You're certainly keeping very tight stops which is absolutely one of my never-break rules. It's tough to go out of business when you're keeping costs low.

Good Trading.

[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]

Originally Posted by 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.