TheStrategyLab.com Price Action Trading Support Forum

Hi Mark ,

This was a paper trade.

My basic strategy is to wait till a price level is tested thrice and then waits for its breakout.

In this case, the breakout bar was a WRB .

Can you provide your comments on this hindsight chart.

Regards
Stumper.

Hi,

There's nothing special about that particular WRB Hidden GAP on your chart unless it occurred via tutorial chapter 2. However, that WRB shown on your small chart does have impact on the price action the next trading day of July 7th. In addition, the advance tutorial chapters 7, 8 for fee-base clients for VTR clients (trade signal strategies) shows the highs on that chart as a profit target via the 5 min chart (you need to be a fee-base client to understand the VTR signal merged with WRB Analysis) even though it does mentioned in the Profit Target section of the WRB Analysis Tutorials that you can use WRB Zones as profit targets. Thus, I'm assuming your chart is the 5min chart and because it's hard to see the back data on your chart because you don't show it in comparison to my chart example below. Simply, although I'm not going to reveal the WRB Zone...your breakout signal is valid because it occurred within a valid WRB Zone that occurred back several trading days ago back on the previous Thursday's price action.

By the way, I don't have access to your data of Nifty except for a free delay source called Futuresource via the symbol NIFTY+N0-NSF. I've attached on chart.ly a similar 5 min chart example of the most recent trading day that occurred one day after your chart example along with showing the price action of several trading days occurring prior to your breakout strategy.

http://chart.ly/p6psav

Therefore, in the future...can you show several trading days worth of data on the left side of your chart example prior to the appearance of your breakout signals. That gives me enough information before and after your trade signal to properly help with your breakout strategy. Unfortunately I don't have the ability to scroll backwards at Futuresource to see more of the data that occurred prior to your breakout signal to determine if your breakout signal occurred within a WRB zone (your chart example doesn't go far back enough).

Best Regards,
M.A. Perry

Sort -of. You described in chapter 2 "Strong Continuation Price Action" ... With the exception that i did not have any key market event here.


Yes, its a 5 minute chart. The reason , i cant show you more data is because i dont get it. I use a web browser based charting service and for intra-day they only provide 3 days of data. Your point taken, will include all 3 days points henceforth.

.
I'm confused Mark. Are you saying it was'nt a valid zone by itself (why reference previous day's zone?)

EDIT: Thanks for your chart. Was checking it out on chart.ly

Hi,

The theme of WRB Analysis is too only take trades that your trading signal is occurring within a WRB Zone (please review tutorial chapters 1, 2 and 3). Simply, you may have a valid pattern signal but if it does not occur within a WRB Zone...it is not valid for trading.

WRB Zone --> Pattern Signal --> Trade

However, as stated in tutorial chapter 3...if your pattern signal (breakout) produces a WRB Hidden Gap that qualifies as a WRB Zone...that's ok as in your chart example. You can then use that Zone to validate any pattern signal that occurs afterwards.

That's the reason for review the past trading days to determine is today's pattern signals are occurring within any WRB Zones.

Regards,
M.A. Perry

Thanks Mark. Got your point.

I have annotated one of my charts ..... this is although not as per my breakout strategy .. yet using it here to validate my understanding.

Kindly suggest your observation on this chart. Is the WRB zone correct .... any trade that i take should involve this zone .. correct

Sorry, due to my work i'm away for days and hence not able to post regularly here. I study your guide --> Review my charts --> Post here. Hence maybe my question's are very rudimentary!.

Regards
Vipul

Hi Vipul,

It's important for you to tell me via what price action definition the WRB Hidden GAP fits from tutorial chapter 2 considering this is not a WRB Hidden GAP from tutorial chapter 3 involving your trade signal strategy.

Simply, you should be able to determine if you're able to define that WRB Hidden GAP via the price action instructions in tutorial chapter 2 or 3. However, as noted, you've eliminated tutorial chapter 3 via stating it's not via your breakout strategy. That leaves the price action definitions involving the swing point and strong continuation price actions described in-depth in tutorial chapter 2.

Therefore, where's the key market event that's not annotated on your chart

Regards,
M.A. Perry

HI Mark

Maybe i confused you .... i was not using key event here from Ch.2. Also although its not as per my strategy ... i thought that chart represented what you mentioned in Chapter 2/3 (Minus the need for pattern signal). The chart was just to see if i understood the basics properly?

Also Mark, i see you have very precise definition of price action .... whereas im more of a breakout trader who relies on previous S/R zones (and not so much on individual or group bar action) .. in which case how do i integrate WRB in my style of trading?

Regards
Vipul

Hi Vipul,

Lets pretend we're not talking about a key market event...lets pretend tutorial chapter has no key market events like tutorial chapter 3. However, we still need to discuss the precise price action definitions.

Simply, you can't ignore the price action definitions and then try to determine if a WRB Hidden GAP is a WRB Zone. Thus, to determine if a WRB Hidden GAP is a WRB Zone you'll need to identify the price action definition that qualifies it as a zone.

Therefore, please review the price action definitions to determine which one of the definitions qualifies that WRB Hidden GAP as a WRB Zone. If none do...than the WRB Hidden GAP is not a zone. However, as stated, the definitions are for those that do not have their own definitions of a swing point or strong continuation price actions.

Thus, you must decide which of the definitions fits the price action in your chart if you understood the basics involving these price actions:

* Swing Point Definition #1

* Swing Point Definition #2

* Strong Continuation Definition #1

* Strong Continuation Definition #2

Here's how you add WRB into your trading via any of the following:

(1) Use WRB Analysis for profit targets

(2) Use WRB Analysis for initial stops or trailing stops

(3) Use WRB Analysis for part of your Entry Signal

#1 above is easy and can be integrated immediately and there's a section in the tutorials version 2.1 about profit targets. #2 isn't discussed but should be obvious and can be integrated immediately. For example, if your going Long on a breakout via a WRB...place your initial stop at the Open of that WRB interval or anywhere in the price area of a nearby WRB Hidden GAP or Zone that's below your breakout signal.

#3 only trade breakouts that occur within a WRB Zone this will filter your trades. However, you made a comment about not being able to see enough historical data (left side of the chart) and that will make it difficult if a valid zone is still open for use from several days ago. Thus, you won't be able to see it due to limitations of your data provider.

Regards,
M.A. Perry

Thanks Mark.

Fortunately for me, we had a major key event involving SEBI (Equivalent to SEC -- http://www.sebi.gov.in/).
I have attached chart for NIFTY -- 5 minute chart with appropriate annotation.

Chapter 2 -- Bullish Swing Point
1) Key market event Marked #A.
2) WRB HG at market event.
3) Bullish coninuationsignal as per chapter 2--- Defined as producing two or more same color WRB Hidden GAPs (they don't need to occur consecutive as in back to back) in which one of the WRB Hidden GAPs is a breakout interval above the most recent reaction high (bullish continuation) or below the most recent reaction low (bearish continuation) price action before the next swing point.

Do you think i got it correct this time around?

Regards
Vipul

Hi Vipul,

Excellent message post...thanks.

Regards,
M.A. Perry