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Forum for price action traders that want to learn WRB Analysis basic tutorial chapters 1, 2 and 3 prior to purchasing our advance trade methods. Hashtags: #wrbanalysis #wrbzone #wrbhiddengap #priceaction #trading
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 Post subject: A bit of difficulty with "contracting volatility"
PostPosted: Tue Jun 20, 2017 1:52 pm 
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Joined: Wed Jun 14, 2017 5:20 am
Posts: 12
I think this is an issue of terminology but I don't want to confuse people (including myself) by being imprecise or plain wrong.

First a chart from chapter 3 with a couple of my annotations.
Attachment:
WRB_Tutorial_2_Chart11.png
WRB_Tutorial_2_Chart11.png [ 84.73 KiB | Viewed 509 times ]


Interval V2 is the first WRB as annotated. The chart has a blue shaded area. For the purpose of observing 'contracting volatility' it appears intervals are being measured on an interval by interval basis each being compared with the V2 WRB. Can someone confirm that is the case?

I see the narrowing of intervals (that I marked in red) all good so far. However the white interval that breaks upwards from this narrowing range/contracting volatility to me is an expansion of volatility with regard to the (immediately) preceding price action. It's a WRB in its own right even though it alone does not clear the previous swing high. (I'm guessing this makes it not too important). In addition even though the next two white intervals (that I have marked in green) have decreasing volatility, they are still 'relatively volatile' and strongly directional breaking the previous swing high.

I guess this is leading up to various 'sequences' in later chapters but I do have a little difficulty as the way I 'view' the market is in a series of range/volatility expansions/contractions also. Here is an example of how I might view the chart from a volatility contraction expansion point of view.
Attachment:
2WRB_Tutorial_2_Chart11.png
2WRB_Tutorial_2_Chart11.png [ 87.14 KiB | Viewed 392 times ]


I wouldn't actually draw all that, but that essentially is how I see volatility expanding and contracting. If this part of chapter 3 can be seen as 'rules' to define 'structure' I am sure I can internalize it alongside my own 'stuff'? I'll just have to be a bit careful on terminology. (talking of terminology I still have to go back and make sure I am talking about 'intervals' rather than 'bars').

Any comments observations or whatnot welcome.


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 Post subject: Re: A bit of difficulty with "contracting volatility"
PostPosted: Wed Jun 21, 2017 9:11 am 
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Joined: Sat Jan 10, 2009 2:06 pm
Posts: 4335
Location: Canada
Hi NickA,

That chart you're referencing is from tutorial chapter 2. It displays a v2 and v1 same direction WRB Hidden Gap intervals.

More importantly, its showing what "contraction volatility" looks like between two same direction WRB Hidden Gap intervals. Simply, its showing that all the intervals "between" those specific WRB Hidden Gap intervals that qualify as a "WRB Zone"...all of those intervals between those WRB Hidden Gap intervals are all contracting volatility intervals.

In addition, the chart displays the Key Market Event (KME) that's a key criteria for only tutorial chapter 2 WRB Zones.

In fact, earlier in the tutorial guide, it talks about how "a WRB" interval (not a WRB Hidden GAP) can be a "contracting volatility" interval when its among those contracting volatility intervals.

Simply, remove one of those discussed WRB Hidden Gap intervals for tutorial chapter 2...we would only be looking at the required 3 intervals. For example, pretend its not a chapter 2 chart and we're just looking at a random WRB Hidden Gap interval that has not qualified as a WRB Zone.

You would only then be concerned with the most recent three intervals before the WRB Hidden GAP interval and the one interval immediately after the WRB Hidden Gap interval.

This is why I tell people that NOT all WRB Hidden Gap intervals will qualify as a WRB Zone. The few that qualify as a WRB Zone...you'll be looking at more than just 3 contracting volatility intervals...

You'll be looking at all the intervals "between" the both WRB Hidden Gap intervals called v2 and v1.

Once again, that chart you're asking about is specifically from chapter 2...and one of the type of WRB Zones being discussed involves a type of contracting volatility that occurs "between" two WRB Hidden Gap intervals that have qualified as WRB Zones. Thus, if those WRB Hidden GAP intervals had "not" qualified as WRB Zones...we would only be concerned with a minimum of three intervals associated with each WRB Hidden GAP.

Please let me know if you understand or don't understand.

Regards,
M.A. Perry
TheStrategyLab.com

NickA wrote:
I think this is an issue of terminology but I don't want to confuse people (including myself) by being imprecise or plain wrong.

First a chart from chapter 3 with a couple of my annotations.
Attachment:
WRB_Tutorial_2_Chart11.png


Interval V2 is the first WRB as annotated. The chart has a blue shaded area. For the purpose of observing 'contracting volatility' it appears intervals are being measured on an interval by interval basis each being compared with the V2 WRB. Can someone confirm that is the case?

I see the narrowing of intervals (that I marked in red) all good so far. However the white interval that breaks upwards from this narrowing range/contracting volatility to me is an expansion of volatility with regard to the (immediately) preceding price action. It's a WRB in its own right even though it alone does not clear the previous swing high. (I'm guessing this makes it not too important). In addition even though the next two white intervals (that I have marked in green) have decreasing volatility, they are still 'relatively volatile' and strongly directional breaking the previous swing high.

I guess this is leading up to various 'sequences' in later chapters but I do have a little difficulty as the way I 'view' the market is in a series of range/volatility expansions/contractions also. Here is an example of how I might view the chart from a volatility contraction expansion point of view.
Attachment:
2WRB_Tutorial_2_Chart11.png


I wouldn't actually draw all that, but that essentially is how I see volatility expanding and contracting. If this part of chapter 3 can be seen as 'rules' to define 'structure' I am sure I can internalize it alongside my own 'stuff'? I'll just have to be a bit careful on terminology. (talking of terminology I still have to go back and make sure I am talking about 'intervals' rather than 'bars').

Any comments observations or whatnot welcome.


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 Post subject: Re: A bit of difficulty with "contracting volatility"
PostPosted: Thu Jun 22, 2017 1:24 pm 
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Joined: Wed Jun 14, 2017 5:20 am
Posts: 12
My mistake, I realised it was chapter 2 (not 3) some time later when I was reviewing material. Also the FBV section (which I had not read at that point) further clarifies.

"More importantly, its showing what "contraction volatility" looks like between two same direction WRB Hidden Gap intervals. Simply, its showing that all the intervals "between" those specific WRB Hidden Gap intervals that qualify as a "WRB Zone"...all of those intervals between those WRB Hidden Gap intervals are all contracting volatility intervals." Concisely states the criteria. Also having now read FBV I think I get the 'point' and why it is important that there is contracting volatility between these intervals before considering a signal.

I certainly don't want to be pedantic or appear to be hung up on terminology :???: though I will probably visualise it as low relative volatility between the two WRB 'yardsticks'. Just easier to internalise without having to displace quite deep seated stuff.

Thanks.


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