Introduction
First
of all, there's a free study guide that represents the first three
basic WRB Analysis Tutorial chapters. The direct link to the download
instructions is posted at the end of this introduction for those that want
to continue learning this excellent resource that will help develop stronger
understanding of any price action you may be trading.
With that said, M.A.
Perry (that's me) begin developing this type of price action analysis of the
markets in the early 1980's and begin trading one strategy derived from WRB
Analysis in the late 1980's.
Thus, I concentrated on understanding the price action (trends, range, chop
et cetera) for many years prior to developing my first strategy with rules
from entry to exit...prior to my very first trade.
Further, in the 1980's when I first started studying the markets (no trading
at this time for many years) because I was a teenager...I came upon the price action of a WRB
accidentally when a hand drawn chart I was preparing for a relative, that
was a floor trader at the time, was
missing one interval.
That missing interval was a Wide Range Bar (expansion bar) in comparison to prior intervals
and I noticed how that missing interval had impact on a few swing points,
reaction points and profit targets
later in the hand drawn chart.
I immediately began studying other charts of different markets and started
seeing other similar like price actions to prompt my initial curiosity into
what I would later call WRB Analysis.
Yet, I initially called them Wide Range Bar Analysis until I had access to
candlestick charting software in the early 90's. Thus, I traverse from bar
charts to candlestick charts and my definition of the word WRB involved both
candlestick charts and bar charts. However, I developed a preference of Wide Range
Body
Analysis (candlestick charts) because I was able to quickly "visualize" the
developing price action on candlestick charts in comparison to using bar
charts especially when I became more of a price action only trader that
doesn't use computer codes nor automation trading to exploit changes in
supply/demand via changes in volatility.
What exactly is WRB Analysis?
WRB Analysis is a method that involves the combination of analyzing changes
in volatility and supply/demand. Simply, WRB helps traders to understand and exploit
changes in volatility as a way to identify key price areas where there's an
important change in supply/demand prior to the appearance of any trade
signals.
WRB Analysis can be applied to time based candlestick
or bar charts, volume based charts or tick based charts although the chart
examples at this website are via time based
candlestick charts.
Also, WRB Analysis identifies changes in supply/demand that's occurring between buyers and
sellers along with providing a map for exploiting the price action from
swing point to swing point regardless if your a day trader, swing trader or
position trader.
The word WRB means
Wide
Range Body (candlestick chart users) or Wide Range
Bar (bar chart users) and there are different types of WRBs based upon volatility
analysis, gap analysis or support/resistance analysis.
The wide range is an interval that has a body (difference between Open
and Close) or bar (difference between high and low) with a price area larger than
each of the prior
three intervals. In fact, you can use any number greater than three intervals as long as it's
not less than three due to the behavior of volatility analysis because its
less reliable and too difficult to analyze the volatility of two intervals
or less regardless if the intervals are based upon time, volume or tick.
Simply, you want as much market context as possible from the price
action to help ensure proper analysis of changes in volatility and
supply/demand.
Therefore, don't mix the definitions of
a Wide
Range Body with a
Wide Range
Bar even though both are
called WRBs.
The Wide Range Bar is a term associated with Bar charts and
represents the price area between the High and Low.
In contrast, Wide Range Body is a term associated with Candlestick
charts and represents the price area between the Close and Open.
However, regardless if you're using bar charts or candlestick charts, WRB
Analysis can be applied to any type of chart where you can see WRBs and WRB
Hidden Gaps. Yet, there will often be a
different number of WRBs, WRB Hidden Gaps and WRB Zones depending upon what
aspect of the expansion interval is being used as a measurement. However, even though you may see
the word body used more often than the word bar in my
discussions of WRB Analysis at TheStrategyLab.com or charts posted elsewhere
online, it does not imply that candlestick charts should be used instead of
bar charts…it’s only because I have a personal preference in using
candlestick charts even though WRB Analysis has nothing to do with Japanese
Candlestick Analysis.
In fact, about
25% of our clients use bar charts instead of candlestick charts while
using WRB Analysis in their trading.
Charts of WRB (wide range bodies) and
(wide range bars)
click on chart to
view actual size
We ask for you to take a closer look at the chart examples on the left to see
the technical difference when comparing a candlestick chart to a bar chart
via WRB Analysis. Charts on the left in the image represents all WRBs
whereas charts on the right in the image represents the important WRBs
called WRB Hidden Gaps. It's the WRB Hidden Gaps that traders
should be monitoring because they represent key changes in supply/demand and
volatility. Simply, not all WRBs are important and the few that are
important must be identified to be able to identify where key market
participants are most likely to get involved in the price action.
Also, most charting programs that
allows coding can be setup to automatically identify WRBs or WRB Hidden Gaps
(e.g. tradestation, metatrader, multicharts, esignal et cetera).
WRB
Analysis in combo with your Strategy
WRB Analysis are not trade signals by itself. Instead, it must be merged
with your trade signals or used to confirm a trade signal is valid for
trading. Thus, WRB Analysis is an understanding of the price action and that in
itself makes it much more important than just trade signals.
It can be used just to get a better understanding of what really is leading
your trading instrument for a particular trading day, used only as profit
targets for those that have trouble staying with their winners, used to
improve the trade management (after entry) of many different types of
methods or trading styles (day trader, swing trader or position trader).
Therefore, the purpose of WRB Analysis
is to be integrated into your own
methods to enhance their performance of any of the
following strategies you may be using as your trade methodology:
Breakout Strategy
Fading
Breakout Strategy
Divergence Strategy
Support/Resistance Strategy
Confluence Strategy
Double Bottom/Double Top Strategy
GAP Strategy (Regular Session Gaps and Globex All Session Gaps)
Trend Strategy
Range Strategy
Profit Target Strategy
Volume Spread Analysis (TheStrategyLab.com has a few clients using VSA even
though we ourselves do not use this methodology)
Intermarket Analysis
Market Seasonal Tendencies (Cycles) Analysis
Volatility Analysis and it replaces the need for volume analysis
Japanese Candlestick Patterns (time and volume based candlestick charts)
Traditional Chart Patterns (ex. triangles, wedges, head and shoulders,
flags, pennants and rectangle price action)
Technical Indicators (ex. rsi, cci, macd, stochastics, moving averages,
average true range, obv and many others)
Trading Instruments suitable for WRB
Analysis Tutorials
The nature of WRB Analysis Tutorials makes it suitable for any
of the following trading instruments.
Futures
Forex Currencies
Stocks
Exchange Traded Funds
WRB Analysis Tutorial Chapters 1, 2 and 3 Free Study Guide
You can download the free study guide @
http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=5&t=180
However, if you are not using any of the above trade
methodologies and want to find out more information about our trade strategies that has WRB Analysis
integrated into the strategies...click
here.
Last of all, if you have any trading related questions...please do not hesitate to contact us because we've
helped hundreds of traders regardless if they use our methods or their own
trade methods.
Analysis of wide range body or
bar (WRB) is the most efficient way to exploit changes in
supply/demand or changes in volatility for
profits.
@
"I
"In
all fairness...I give credit to these results to Niha and what I have
learned from him."
"
