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Quotation Left 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. Quotation Right
 

WRB Analysis

(Wide Range Body or Wide Range Bar Analysis)

Introduction

WRB Analysis Logo ChartFirst 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)

WRB Analysis Candlestick Chart versus Bar Chart

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.

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body analysis or wide range bar analysis)
Price Action Trading (no technical indicators) 

Twitter @ wrbtrader@ http://twitter.com/wrbtrader/

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