TheStrategyLab.com Price Action Trading Support Forum

Chap 1 DOK WRB introduction to hidden gap

The document will be wrote like if I where to do a presentation to an an informed student.

WRB:Wide Range Body ( in my case) denote a change in the volatility and or supply and demand for a given period. Market was trading on a regular pace where buyer and seller where getting there price. Price could be on a static level, like in a congestion or be in a trend. A WRB may appear if a sudden modification of the Supply/demand do occur. If there is more buyer than seller, price may surge up. Same for if there is more seller than the community of buyers, then price may jump down because seller could be anxious to get out of the trade. Again WRB is a demonstration of the imbalance between both side of the market.

WRB hidden gap: Is a WRB that has a gap between is previous bar and is following bar. You will need a minimum of 3 bars to determine if a WRB may qualify as a WRB hidden gap.
1) a bar.
2) a WRB: a wide range bar that as a bigger body than is preceding bar (bar 1)
3) a bar than as no price in common with bar #1. Simply, if by removing completely the WRB bar, a gap do appear between bar # 1 and bar # 3 then the WRB bar may be qualify as a WRB hidden gap

WRB study could be use to follow the path of the price. Level (zone) that has showed an importance by denoting an imbalance between the sellers and buyers desired price and offer, could be highlighted on the chart. Doing so, we could have a better idea on where to look to enter in a trade. A region that as showed an imbalance will tend to repeat the same imbalance when price do navigate in is field. This will be true, until price do close the region by filling it completely. Once filled, a region could not be use for further analyses.

WRB studies could be use in complementary with differents strategy and instruments, but THEY ARE NOT BY THEMSELVES TRADING SIGNAL.

It could be seen as:
Bar 1: Volatility Contraction
Bar 2: Volatility expension , WRB
Bar 3: Volatility Contraction

In conclusion WRB concept, demonstrate a modification in the volatility at a given price / moment.

The annexed chart as a green or red dot over or lower a bar that qualify as a WRB hidden gap. Arrow show where the WRB hidden gap is filled by the price action.