[brownsfan019]

Pivot - I see your points.

I suppose I am the same as well - I want a profit and want it quickly. Patience isn't always my strongest point, which is why I think exiting on WRB's works for me. There's no random price target sitting out there and no *hoping* that that target is hit at some point in the day. With WRB's as the exits in conjunction with my setups, it's been a good mix so far. Sometimes the WRB's happen to be dead on for the ideal exit at that point in time for me. Other times they may be a bit early, but still a good exit for me. Since my stops are small to begin with, I can't afford to sit for hours to see if a big move is coming later. Simply, I will look for my trades and take them and hopefully if/when the big move comes, I am already in the trade.

[Anonymous]

BF;

When I first read your posts about CV candles, I was under the impression that one reason you (and others) liked them over time based candles was because CV mute most WRBs and Long Shadow candle lines. I see that I may have been mistaken.

Without neither WRBs or Long Shadows nor Changing volume, it would seem hard to detect changes in the supply/demand dynamic.

You are a successful trader and many would do well to follow your steed. As a trader I know it is about the making the trade for you. That is, the buying and selling. However, my personality, and the fact that I am learning a new method means that I find myself looking at WHY at trade is made rather than simply when or how.

The chart below seems to give so much information about the underlying dynamics of the market.

We see a WRB on Ultra High Volume. The first clue that something is changing in the market. The next bar is ultra wide spread on ultra high volume. Even more volume than the previous bar. Note that this bar closes in the upper range and creates a Long Shadow. Clearly, this bar had demand (buying) within it. This fact is Hidden to those who only see a down bar on "heavy selling (volume)".

Now can these two bars be seen on a chart that keeps volume constant? Check out the test bar. Volume is less than the previous two bars. What goes beyond VSA is the fact that this low volume test appears in the Long Shadow of the Ultra High Volume bar. Simply, that is more than just a Doji. But I don't know if I could know that without volume.

So here we can see a WHY we would want to be long. Of course a long may lead to a loss, but that matters little. What matters is that there has been a shift in the supply/demand dynamics as shown thru the WRB and the Long Shadow candle (which of course, was a WRB during the interval). There has also been a test for supply back into the area of the Long Shadow. Prior to the test, we had a bar that closed on its high with volume less than the previous two bar, this is No Buying Pressure. Hence price falls down and the Smart Money tests for supply.

Markets do not like wide spread up bars on high or ultra high volume. The reason being there could be "hidden" selling in the bar. However, there are times when the Smart Money is willing to absorb the selling from the weak hands. This is called absorption volume/ pushing thru supply. Here again we see a WRB. This time it is not so much a change in supply/demand but a willingness for the Professionals to buy at higher prices. If they are willing to buy at higher prices, they must expect even higher prices.

I'm not trying to change your mind here. Just wondering if the essential shifts in supply/demand can be seen when volume changes are taken out of the equation and large candles or Long Shadows are muted.

This is a 5 min chart. Would love to see this as a constant volume chart if you have it.

[brownsfan019]

Originally Posted by PivotProfiler »

I'm not trying to change your mind here. Just wondering if the essential shifts in supply/demand can be seen when volume changes are taken out of the equation and large candles or Long Shadows are muted.

This is a 5 min chart. Would love to see this as a constant volume chart if you have it.

Pivot - I will get some charts up later today or Fri since it's a holiday.

Regarding your question, the best thing I can suggest is simply pull up a VBC chart on your platform. Put them side by side and see how the chart dynamic changes. I think visually that the VBC charts stress the the importance of the WRB more. The reason being that since the volume is 'smoothed' out, in order for a WRB to in fact appear, there has to be some serious volume in a very short burst; whereas a time chart may simply be showing a temporary 'cooling off' period between the bulls and bears. That's not to say that one WRB is better than the other, but I think the WRB theory easily translates over to VBC charts. It would ultimately depend on how each trader uses the charts and the information in front of them, so what I 'see' may be of no use to you. Doesn't mean either of us is wrong, it just means that I see a very useful feature of WRB's on VBC's.

I attached an EC chart from just this morning on a long trade. As you can see, the exit was a matter of 3 ticks from the high of that move, which is coincidentally the high of the day as well. Not to say that will hold or is important, but here's another chart where the WRB was very good at finding the highs of the current 'move'. Now, how I define the 'move' is probably different than most here. I am simply looking to get the most bang for my buck quickly. The chart that I attached is about 45 min's worth of data, but the actual long trade was about 15 min's. The net result was plus 8 points, which is not huge, but if you look at that chart, that's all that was there in this move for me. Sometimes we will get a pullback and then continue back up, or we simply start a new move down as in this example. Either way, the WRB got me out at an ideal area with practically no threat to my stop loss area at all. I like those trades!

Note: There was some econ news at 7:00am EST which helped provide the EC a 'reason' to move. Before trading the EC, make sure you know exactly when econ announcements are as this market can be much more volatile during these releases than other markets, such as the indexes.

[Anonymous]

While your definition of a WRB differs from mine, I believe it was my first post on WRBs that got you to re-think them as a profit taking mechanism. So you can send my portions of the profits to .........................

Thanks for the chart. One of the problems with static charts is you can not see the price action unfold (obviously), I think that is where you would say the real value in VCB comes in.

Is your focus restricted to profit targets or do you use the primary message they contain: something is or may be changing with the supply/demand dynamics. With the way they seem to appear near turning points, this would make sense.

You may have already said this, and I will take a look back, but did you look into using multiple pts (WRB profit targets) or just one?

Yes, Mark emphasis the importance of news related events and this is especially true with the currencies. VSA, btw, also places much import on when news comes out. As this is an opportunity for Professional Money to get weak hands into bad positions.

[brownsfan019]

Originally Posted by PivotProfiler »

While your definition of a WRB differs from mine, I believe it was my first post on WRBs that got you to re-think them as a profit taking mechanism. So you can send my portions of the profits to .........................

Pivot - yes, you were the one that got my attention on WRB's and for that, I am eternally grateful. And that's serious.

Thanks for the chart. One of the problems with static charts is you can not see the price action unfold (obviously), I think that is where you would say the real value in VCB comes in.

Yes, with VBC charts, looking at them in hindsight is only so good. But watching real-time can be a real eye opener.

Is your focus restricted to profit targets or do you use the primary message they contain: something is or may be changing with the supply/demand dynamics. With the way they seem to appear near turning points, this would make sense.

I am using WRB's purely for exits and exits only. I understand the theory behind them, which is why I am using them as exits. I view the WRB simply as a temporary imbalance between the bulls and the bears, which most likely will be 'corrected' or brought back into balance; therefore, my exit is at the close of the WRB with a market order.

You may have already said this, and I will take a look back, but did you look into using multiple pts (WRB profit targets) or just one?

Right now, just one and so far, no plans to change that. Since I am trading on 'smaller' VBC charts, getting multiple WRB's that do not threaten my stop level is not realistic. I'm looking for a quick pop and then out. I have no problem re-entering the trade, so this works for me. If looking for a bigger move or 'home run' as I would call it, they way I trade would not work. I look to hit singles and the occasional double all day long. And the reason I can do this is simple - my initial stops are very small to begin with, so to keep the risk/reward in check, most WRB's are great exits once they reach a minimum profit level.

I mentioned this in another thread, but I have a minimum level that must be reached before considering a WRB. This is the result of many hours of testing and research based on how I trade. For example, in the YM, price must go to a positive 8 ticks in my direction before a WRB can be considered for an exit. Once price touches +8, the first WRB that appears is the exit, even if that occurs in the process of reaching that +8. The reason behind this is that I found a 'technical' WRB may form right after I enter, but not provide enough acceptable profit at that time. This WRB does however provide the chance to move the initial stop. So, a good majority of my trades that 'lose' are at break-even +/- 1 or 2 ticks. I will take that risk/reward, aka odds, all day long.

[brownsfan019]

Here's an NQ chart from the last 15 min's of the trading session (4pm - 4:15pm EST).

As you can see, or at least what I saw, was a nice move up just before 4pm and the WRB gave you a great exit and that trade took approx 1 1/2 minutes. Then, if you short on the down move, a couple more WRB's appear... And that would have taken approx 1 1/2 minutes as well.

I've also attached a 3 minute chart of the EXACT same price action going during those 15 min's. I don't know about you, but I kinda like the VBC chart better. :p

Pivot - do those charts help seeing them side-by-side? To me, on the 3 minute chart, you had chop. We are only looking at a 15 min timeframe, so the 3 minute chart doesn't have the time to do anything really. On a 3 minute chart, the end of the day does not do anything for me. That EXACT same timeframe on a VBC chart however, produced TWO potential profitable trade setups....

[Anonymous]

BF;

You may have considered this, but I will bring it up anyway. How do you handle, if at all, Long Shadows? Long Shadow candles are the cousins of WRBs. That is, usually, during the interval they WERE WRBs but did not remain so by the end of the interval.

As you exit on the close, this could create "lost" profit taking opportunities. I know you are not concerned with the support/resistance zones they also can create, but do they offer the chance to trail a stop UNTIL the next WRB appears on the close?

[Anonymous]

This chart belongs in the VSA thread, but it deal so well with BF's last post.

Notice what can be seen in large candles when volume is used to understand the supply/demand dynamic.

Complete discussion of this chart in VSA thread.