TheStrategyLab.com Price Action Trading Support Forum

Here is my DOK for Chapter 2.

It follows the unemployment report news that occurred at 8:30 Eastern on March 6, 2015.

Thank you

Hi,

Thanks for the DOK.

I will assume you were posting a DOK for a strong continuation #1 price action from chapter 2 because its the only price action definition mentioned in chapter 2 that involves "reaction highs/lows" to identify a "first WRB Hidden GAP" breakout interval as a WRB Zone if it qualifies as such.

The key concept involving tutorial chapter 2 about the first WRB Hidden GAP interval, as stated in tutorial chapter 2, if the first WRB Hidden GAP interval that appears at/after key market event interval does not qualify as a WRB Zone...do not go searching for another WRB Hidden GAP interval to qualify as a WRB Zone if the first WRB Hidden GAP interval failed to qualify as a WRB Zone.

In your chart example you knew and mentioned on your chart that the first WRB Hidden GAP interval did not qualify as first WRB Hidden GAP interval that's a breakout of a reaction low. Yet, you continue down the price action and searched for another WRB Hidden GAP interval AFTER the breakout had already occurred. That's incorrect analysis for strong continuation #1 price action because ONLY the first WRB Hidden GAP interval is allowed to be the breakout interval of that horizontal like drawn from the reaction low.

Once again, the key error you made was that you continue looking for a WRB Hidden GAP interval after the first WRB Hidden GAP interval had failed to qualify as a WRB Zone. Simply, you must remember that in tutorial chapter 2...we're only interested in the first WRB Hidden GAP interval at/after the key market event...we are not interested in any other WRB Hidden GAP interval as stated in tutorial chapter 2.

Regards,
M.A. Perry

Hi M.A.,

Yes I completely understand what you are saying. The 2nd area is not valid. Only the First Wrb Hidden Gap Interval after the news can be considered a WRB zone.

Thanks

My Chapter 2 Summary Notes

What makes a WRB HR Gap a WRB Zone?

1. It’s the first WRB Hidden Gap at or after the KME bar

2. It develops as the result of either a swing point or a strong continuation price action

What is a swing point?

After the KME, the price reverses and continues enough to either:
cross three consecutive non-overlapping bars in the same direction or
cross a prior WRB-HG

Swing Point #1
The first WRB-HG occurs on the KME bar.

Swing Point #2
The first WRB-HG occurs when the KME bar comes after a series of contracting price bars

What is strong continuation?

After the KME, the price continues in the same direction and creates a first WRB-HG.

Strong Continuation #1
The first WRB-HG breaks out a prior reaction high/low

Prior reaction high/low is a pattern of 2 bars in one direction followed immediately by 2 bars in the other direction)

Strong Continuation #2
This is a 2nd WRB-Zone that can occur later (e.g. after a strong continuation #1)

A V2 is created (3 smaller bars followed by a larger one)

A V1 is created (a V2 followed by only smaller bars then a larger one)

If either the V2 or the V1 is a WRB-HG then V1 is a WRB Zone

The news on Friday AM created a strong continuation #1

Hi,

Thanks, that's a nice quick (easy) to read summary of chapter 2. Greatly appreciated.

Regards,
M.A. Perry