questions on WRB(wide-range body) analysis

Quote from NihabaAshi:

Thanks for the clarification.

Lets talk about your example.

If the trendline of a double top is broken by a WRB and you view it as a hint that a temporary top is in place...

Why would you enter a Short position if this is only a clue (hint)???

Simply, what's your confirmation signal after that WRB to confirm its time to open a Short position???

Thus, if your confirmation is only a trendline break via a WRB...

That's not enough info about the price action to prompt a trade decision.

Mark
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Mark,

In the example I mentioned above, I'm using WRB as additional confirmation for trade entry. My basic trade-setup comes from pattern (and/or some other price action analysis). For high-probability trade set-up, you want to have more confluence factors. WRB is serving this purpose here. The WRB is regarded by me as the effort to rise/fall for trade entry. In this context, WRB is not only serving as a confirmation tool, but also a good timing tool.

You mentioned volatility analysis versus volume analysis. I don't understand why you regard volatility analysis is more useful than volume analysis. I'd like to hear more about this point.

Thanks again for insight.
 
Quote from NihabaAshi:

True



False.

Increasing volatility in one interval is not a reliable measure for determining the volatility of the next interval.

Simply, a WRB all by itself is not a prediction tool for what will occur in the very next interval.

Mark
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Depends on your intervals maybe, wide bars are usually preceeded by not so wide but increasingly wide bars... it's Volatility 101...
 
Quote from maxpi:

Depends on your intervals maybe, wide bars are usually preceeded by not so wide but increasingly wide bars... it's Volatility 101...
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We are talking about two different things.

Mark
 
Quote from swing-scalper:

For high-probability trade set-up, you want to have more confluence factors.
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too much filters will kill your system in the long run. My experience with filters is that it might reduce the number of trades taken, the DD, and maybe increase the win rate, but it always reduces profit by an unacceptable amount compared to a more minimalistic version.

and not only that, but you face the possibility of overtweaking your strategy and as soon as market conditions changes, youre doomed.
 
Quote from swing-scalper:

...You mentioned volatility analysis versus volume analysis. I don't understand why you regard volatility analysis is more useful than volume analysis. I'd like to hear more about this point.

Thanks again for insight.
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There are many threads at ET involving heated debates about the usefulness of volume analysis.

You can easily review those threads because I refuse to get involved in those discussions (arguing with the same folks).

Keep in mind you started a discussion about Wide Range Bodies Analysis.

Thus, if you have questions about volume...

You might want to start a new thread and the usual folks will show up.

In contrast, if you have questions about volatility analysis in the context of Wide Range Bodies (study of volatility)...

Don't try to use volume to interpret volatility.

Instead, use WRB's to interpret volatility or vice versa.

Mark
 
Quote from silvermotion:

too much filters will kill your system in the long run. My experience with filters is that it might reduce the number of trades taken, the DD, and maybe increase the win rate, but it always reduces profit by an unacceptable amount compared to a more minimalistic version.

and not only that, but you face the possibility of overtweaking your strategy and as soon as market conditions changes, youre doomed.
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I think WRB's is already part of his method (not a filter) because he see's them occurring in many of his trade signals.

Therefore, he's trying to learn more about the WRB to better understand it's importance within his method.

For example, most double tops involve a WRB or long shadow...

To better understand them will only improve the knowledge about the strategy and not filter it.

That's the reason why I said WRB Analysis is not a trade signal itself...

It's the understanding of the price action.

Thus, a better understanding of whatever method a trader is using along with a better understanding of the price action that's being traded...

Improves the bottom line.

Look mom...no indicators. :cool:

Mark
 
WRB against the current trend, breaking a TomDemark trendline with at least one qualifier in place and also breaking a S/R level.

Can it get any better!? :)
 
However, wide range bodies are greatly influenced by the timeframe you are operating in.

If your market is moving slowly by default you have to look for wide range bars on higher timeframes, intraday, like 15, 20 or even 30 minute bars.

If your market moves fast, 10 minutes should be your max timeframe.

So it's a question of knowing your market the best way possible.

On daily charts things are pretty constant, although i would look at the bar being in the top 30% of it's historical volatility.
 
Quote from silvermotion:

too much filters will kill your system in the long run. My experience with filters is that it might reduce the number of trades taken, the DD, and maybe increase the win rate, but it always reduces profit by an unacceptable amount compared to a more minimalistic version.

and not only that, but you face the possibility of overtweaking your strategy and as soon as market conditions changes, youre doomed.
More...

Silvermotion,

As Mark said clearly, the study of WRB analysis can help us better understanding of price action. It's not only a filter.

I agree with you that too much filters will result in fewer trades. There is a balance there. For me when I see a trade set-up of more confluence factors, I regard it as a high probability trade. I feel more confident to take the trade and I want to have larger size on that trade. High probability and high reward/risk trades are what we shooting for as traders, right?

BTW, I'm an intraday future trader. I'm scalping at both micro level (targeting a couples of ticks) and swing level (targeting a couple of points) depending on the market conditions and trade set-ups.

Swingscalper
 
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