TheStrategyLab.com Price Action Trading Support Forum

Narrative about this post. William Crocker wmcrocker un

Chapter 2 DOK Key Market Event, PM May speaks

Let me say a word about the free WRB software I am using to call out WRB Hidden Gaps
This software seems to do that job pretty well. But it also extends the gap via a blue rectangle to suggest that you are looking at a WRB Hidden GAP Zone. As we know a hidden gap becomes a zone after price action shows swings points or strong continuation. So this free software jumps the gun and prints a blue rectangle before price confirms the zone. I don’t think it is a big problem. A quick glance will tell you the true status of the printed rectangle.

The first chart is an hourly chart for overview.The annotations on the chart show price action, Key Market Event, Prior unfilled and new WRB Hidden Gaps. This is an exercise in labeling and thinking about the actual characteristics of this aspect of WRB Analysis.

On this one hour chart overview we have Volatility contraction just before Prime Minister May's Speech at 13:45 Jerusalem time. (The server for MT4 is on Jerusalem time and can not be changed)

At first the price action looks like bullish Swing Point Volatility Contraction #2 price action. (Defined on p. 28 of chapter 2) # 2 Price action is defined as beginning with declining price action, a swing point, then an upswing composed of three consecutive higher closing intervals. The Key Market Event (KME), on which KME price action is based, is involved with the range of the contracting volatility that shows up just before the beginning of the upturn. After the KME comes the first WRB Hidden Gap. The Hidden Gap must share at least one tick with the range of the contracting volatility. (See Chart 2 for detail about the area around the contacting volatility and upturn.)

So far now we have Contracting Volatility, change of direction Swing Point, Upturn, 1 st WRB Hidden Gap. (See second chart for detail in this area) This complies with the #2 bullish Swing Point, Volatility Contraction, price action definition (p 28) Now we need 3 consecutive higher closing intervals (including the interval that that produces the 1 st WRB Hidden Gap) This would complete the # 2 definition.

But as the price action unfolds we see that we do not have 3 consecutive higher closing intervals. We have only two. There are three or more but the third one is not consecutive.

We are lucky though, the price action has filled the first prior hidden gap and it has filled an "out in plain sight prior gap".

So we need to look at # 1 Swing Point Definition (p. 27) This definition is the one we want. The sequence is Swing point, a KME, filling of prior WRB Hidden Gap with 2 consecutive higher close intervals. The filling of the prior gap must occur before the formation of the next swing point. A 1st WRB Hidden Gap is also required. Our chart meets all of these requirements.

The point I am making to myself in doing this that being thoroughly familiar with this information will enable me to make quick decisions in the future. I have been at this trading pursuit for longer than I want to remember. WRB Analysis is worth doing this for because in my opinion the approach is real. I say that because I was startled to realize the other day that in other studies when I would whine for pablum I would find that often the author anticipated my state and gave me some. Off I would go thinking I knew something. Then I had to bridge blanks in my knowledge, look for a another indicator and make myself pay attention etc.
I see this approach as being different in that the message is detailed research. Everyone who writes anything can claim that of course. The clincher in my mind is that WRB Analysis gives succinct facts. It offers no structure to hang it on. Because of that it can seem a little overwhelming. Well I say OK. so I guess it is my job to build a structure. In fact I know it. No pablum being served here
Chart 2 coming tomorrow