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VWB II - concept 1 vs 3

  • #1
  • First Post: Mar 18, 2006 7:33am Mar 18, 2006 7:33am
Hello everyone,

When I scan for VWB set ups, I usually find myself with concept 1 (30 and 47 pips from open) going against concept 3 (50% retracement if daily range>60).

Let's say we are hugging the lower extreme fib band and we're looking to enter long. Alright now, concept 1 advocates that once the price has moved south a significant amount of pips (30 and 47) since the open, it's rather unlikely we will see a reversal day. In the other hand, concept 3 needs a larger-than-60-pips daily range, the larger the better, to make the 50% level breakout significant.

The problem is that if order to hit a larger-than-60-pips daily range, we are likely to pass beyond the 30 or even 47 pips to the down side, so one concept anuls the other.

Any feedback?
  • #2
  • Mar 18, 2006 10:53pm Mar 18, 2006 10:53pm
Quoting WTB
Hello everyone,

When I scan for VWB set ups, I usually find myself with concept 1 (30 and 47 pips from open) going against concept 3 (50% retracement if daily range>60).

Let's say we are hugging the lower extreme fib band and we're looking to enter long. Alright now, concept 1 advocates that once the price has moved south a significant amount of pips (30 and 47) since the open, it's rather unlikely we will see a reversal day. In the other hand, concept 3 needs a larger-than-60-pips daily range, the larger the better, to make the 50% level breakout significant.

The problem is that if order to hit a larger-than-60-pips daily range, we are likely to pass beyond the 30 or even 47 pips to the down side, so one concept anuls the other.

Any feedback?

Good point so price has to Move or Drift somewhat from the open (+ or -) 14 to 30 pips in order to hit the >60 pip range depending on what the high ends up being? Not trying to repeat what you said. Am I getting this right?
  • #3
  • Mar 18, 2006 11:57pm Mar 18, 2006 11:57pm
Quoting WTB
Hello everyone,

When I scan for VWB set ups, I usually find myself with concept 1 (30 and 47 pips from open) going against concept 3 (50% retracement if daily range>60).

Let's say we are hugging the lower extreme fib band and we're looking to enter long. Alright now, concept 1 advocates that once the price has moved south a significant amount of pips (30 and 47) since the open, it's rather unlikely we will see a reversal day. In the other hand, concept 3 needs a larger-than-60-pips daily range, the larger the better, to make the 50% level breakout significant.

The problem is that if order to hit a larger-than-60-pips daily range, we are likely to pass beyond the 30 or even 47 pips to the down side, so one concept anuls the other.

Any feedback?
Hi WTB,

I think you need to include momentum.The 30 to 47 pips could build over several hours but, the reversal needs to occur in a short time period .The 60 pip + needs to occur in 1 or 2 hours and then retrace 50% of that spike in 1 or 2 hours.The origianal 30 to 47 pips might not even be part of the key reversal.
  • #4
  • Mar 19, 2006 5:35am Mar 19, 2006 5:35am
Yes, I understand that the 50% breakout is linked to the "momentum" concept. So, if such momentum off the low and through the 50% level is strong, do we discard then the 30-to-47 concept? I thought the 30-to-47 concept was based on historical hard-statistics...
  • #5
  • Mar 19, 2006 6:51am Mar 19, 2006 6:51am
Quoting WTB
Yes, I understand that the 50% breakout is linked to the "momentum" concept. So, if such momentum off the low and through the 50% level is strong, do we discard then the 30-to-47 concept? I thought the 30-to-47 concept was based on historical hard-statistics...
This is only my interpretation but,I believe Vegas mentioned somewhere that the excel data would be an excellent day trading tool.I think he meant from reading some of his posts that the break of the 47 pip level could be an excellent time to trade the trend as a reversal is unlikely and trading a reversal at that time could lead to a loss.
However if something set off a 60 pip gain(more or less ie, GBP trade last week ) in one hour and then in the next hour reversed right through the 50%(30 pip back)that is when I would enter the trade,regardless of what happened prior to that point.

I bet you and I are the only ones up at this wee hour of the morning.
  • #6
  • Last Post: Mar 19, 2006 10:51am Mar 19, 2006 10:51am
Rule 1 says to me, "Don't go against a big move in progress because there's still plenty of room for it to move." So the 30-45 pip thing is just saying "Don't trade yet."

Rule 3 says "Hey, it reversed more than 50%, maybe the big move is over. We can start thinking about making a trade, but the opportunity will still be here tomorrow." So this is saying "Don't trade yet, well, maybe a little."

I think the reason they seem in opposition is that they are, most of the time. It's unlikely that a 60 point move reverses, but when it happens, you get interested. Looking at the last 6 months or so, I only see 10 or so big reversals so this makes sense.
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