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Trading Using Control Bars

  • #141
  • Aug 1, 2011 2:31pm Aug 1, 2011 2:31pm
Thanks for your valuable insight, rattyo! We are grateful that you would take the time away from your huge pip collecting system to come visit and share your expert opinion.


DrDave

"Without a black cloud, we cannot appreciate the sunshine."

Quoting rattyo
what a load of tripe
To free Gazans of Hamas, use whatever it takes.
  • #142
  • Aug 1, 2011 4:54pm Aug 1, 2011 4:54pm
Quoting Villonius
Hi Guys

I'm fairly new to the Control Bar methodology but I dug out and read the info on WRB that Hidden Gap referred to recently. Interesting stuff.

Here's a chart. Notice how Support at S1 of CB1 now acts as resistance. Karthik has pointed out that often CBs run sequentially in which case he considers it as just 1 big CB. That's fine but I feel it's worth at least drawing the line of the extreme of the 1st bar. Notice how the high of CB3 R2 acted as support S2 in Asian session.

Any comments please fire away.

A question for Hidden Gap...
This chart has exceptional educational value. Very good, and thank you !




_______________
Michael
Be like water.
  • #143
  • Aug 2, 2011 1:18am Aug 2, 2011 1:18am
Quoting DrDave
So, maybe a trade strategy to go for the first breakout is right after you are in the breakout trade, immediately set a stop-and-reverse a few pips back across the line. Then if it really were a false breakout and it comes back to your stop before TP is hit, you are immediately starting to recover lost pips.

DrDave
==================

Good point Dr.Dave. Thx.
Hercs
  • #144
  • Edited 1:36am Aug 2, 2011 1:25am | Edited 1:36am
NS, would you mind commenting on yesterday's short entry, please.

I marked what I regard as the "retesting M15-candle" (RED-arrow) just after my H1 chart "overheated" (also attached for clarity) and put its head through the CB-line which is shown here as a broken Aqua. Kindly confirm that my understanding is correct please.

Best wishes.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2011-08-02_CB-H1.png Size: 42 KB
Click to Enlarge Name: 2011-08-02_CB-entry_M15.png Size: 27 KB
Hercs
  • #145
  • Aug 2, 2011 4:17am Aug 2, 2011 4:17am
Hi Guys,

Here's my take on where we are now and the overnight Asia action.

Before I do I recommend that any traders interested in expanding their knowledge of PA follow Hidden Gaps mention of WRB analysis. Simply Google WRB and Mark and you'll find your way to his website. As HG mentioned there are 3 free chapters on WRB basicsand then options to purchase further sections from 4-12 if you feel so inclined.

I don't want to hijack Karthiks thread and excellent comments regarding how he trades Control bars. I feel his method is particularly useful to patient traders happy to use 1Hr and subsequently 15 min bars and following that you would have made a lot of dough over the last couple of weeks even in an uncertain and volatile market.

So here's what I'm looking at. CB4 is huge ! Roughly 135 pips. Now look to the left and you see 3 CBs marked CB1 CB2 and CB3. Note the areas overlap so there is still exposed territory in them. Note how the WRB zone of CB3 is currently constraining price. The zone is still active 8 days after it opened as it was never closed. Also note price is currently oscillating around the high of CB2.

Finally if we look again at CB4 which was an extreme Bearish bar some traders bought off the low of the bar and some traders took some profit off the table at that level.

Running a fib across the HL of that bar 61.8 constrained the retrace and then Frankfurt piled in at 38.2 Thats just to give an idea of how you can trade a CB when it is particularly large and price is constrained within it.

Regards to all


V

Comments welcome still learning !
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  • #146
  • Aug 2, 2011 7:50am Aug 2, 2011 7:50am
Just look today H1 chart of USDCAD. Price found support on 50% retracement of cb1 and start point of cb2.
Attached Image (click to enlarge)
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  • #147
  • Aug 2, 2011 8:37am Aug 2, 2011 8:37am
Quoting Villonius
Hi Guys,

Here's my take on where we are now and the overnight Asia action.

Before I do I recommend that any traders interested in expanding their knowledge of PA follow Hidden Gaps mention of WRB analysis. Simply Google WRB and Mark and you'll find your way to his website. As HG mentioned there are 3 free chapters on WRB basicsand then options to purchase further sections from 4-12 if you feel so inclined.

I don't want to hijack Karthiks thread and excellent comments regarding how he trades Control bars. I feel his method is particularly...
Hello Villonius,


thanks for the further example. However I remember when reading the first 3 chapters of Marks pdf that he emphasizes the fact that the proper use of CB´s or WRB`s means that one can clearly see at which point a support/resistance line is no longer in use.

This happens when basically an opposing CB or WRB closes in the other direction of the prior CB/WRB.

Therefore, if your CB3 is the red down bar in the chart, this has already been invalidated by the sudden strong upmove and their closes.

So, we might be technically in the range area of CB2, but its not quite clear from your chart and I might be wrong.......

Very good example by Hercs here, how we see that a new CB is in play and therefore also new levels.

Anyway, great way to study charts, many pips to all.





___________
michael
Attached Image
Be like water.
  • #148
  • Aug 2, 2011 9:34am Aug 2, 2011 9:34am
Hi Michael

That's a very valid point you raise.

In this case the top of CB3 is closed by the strong action but the base may still be in play. If a CB or WRB is considered as a zone then the extremes of the zone are usually taken as the S/R levels much in the way Karthik uses them. So the top was taken out but the base was not.

It is the same idea for CB1 and CB2. Tops of the zone taken out by breakouts north but bases still in play.

This also leads to one of the questions I posed to HG in this thread. Namely that when considering WRBs the zone is marked by the HL when using Range bars but changes to Open Close when using Candlesticks.

My question is why as it is just a different visual method of displaying exactly the same information ?

One final point from the chart. Notice how yesterdays high was a re-test of the Up Trend support (now resistance) line.Also hit a resistance Equidistant channel taken from Weds Asian high.Finally it hit the top of the CB formed mid afternoon last Weds. Thats 3 confirming factors indicating Price was hitting a major resistance and a good enough reason to sell.

Best regards


V
  • #149
  • Aug 2, 2011 1:10pm Aug 2, 2011 1:10pm
Quoting Villonius
...This also leads to one of the questions I posed to HG in this thread. Namely that when considering WRBs the zone is marked by the HL when using Range bars but changes to Open Close when using Candlesticks....
This is an interesting question and to be honest I do not know the exact answer. I do have a few thoughts.

Candles:

1. Typically with candles, the real body (C-O) is of particular importance. Next come the upper and lower shadows and then lastly comes the range of the candle.

2. Way back when, before intraday 2 minute charts, many people assumed that the professional money could be seen in the relationship of the Open vs the Close.

Bars:

1. While WRB Analysis has nothing to do with VSA, VSA highlights the fact that not all traders that use bars use the open. In other words, you can not use a candle and take off the open, however you can use a bar and take it off. In fact you could keep the open and lose the close if you wanted to. The constant would be the range. This is why you could not use range bars-all the ranges would be the same and you could not see changes in volatiliy.

For a long time Mark recommened using bars the same way as candles. That is, to use the body. The change is recent and I think it is to reflect that some people use bars without looking at the open.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #150
  • Edited 3:54pm Aug 2, 2011 3:49pm | Edited 3:54pm
Quoting Villonius
Hi Michael

That's a very valid point you raise.

In this case the top of CB3 is closed by the strong action but the base may still be in play. If a CB or WRB is considered as a zone then the extremes of the zone are usually taken as the S/R levels much in the way Karthik uses them. So the top was taken out but the base was not.

It is the same idea for CB1 and CB2. Tops of the zone taken out by breakouts north but bases still in play.

This also leads to one of the questions I posed to HG in this thread. Namely that when considering WRBs the...
Hi Villonius,

yes, this is of interest and why I like keeping the levels on for some time, as they might prove useful to understand price action and retests later on.

Glad to see nskarthik, HG posts......watching CB`s / WRB`s live and acting upon is not easy, but it has helped me enormously.

For some it might be too obvious to be of importance.

Pic : one of my most basic 4h charts, just watching....

Good trading to all !


____________
michael
Attached Image (click to enlarge)
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Be like water.
  • #151
  • Aug 3, 2011 4:25am Aug 3, 2011 4:25am
Here is a short and quick update on the euro control bar which i had posted earlier. I had said that the ends of the bar were at 1.4225 at the top and the bottom was at 1.4150....Look at the updated hourly chart that i have posted. Look how price came back exactly to the low of the bar to test it and then went right back up. If you had entered close to the low, as i did, at around 4155, you could have easily made 150 pips by now. I took off 107 pips.

Even if you had missed the bottom of the bar, look at the top of the bar that has been marked. Look at the 15M chart that i have attached. Look how price broke the top, retested the top and went right back again. A trade that could have fetched 70 pips easily. All for a DD of less than 10 pips !! Amazing...Isnt it ?
Attached Image(s) (click to enlarge)
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  • #152
  • Aug 3, 2011 4:29am Aug 3, 2011 4:29am
Quoting DrDave
So, maybe a trade strategy to go for the first breakout is right after you are in the breakout trade, immediately set a stop-and-reverse a few pips back across the line. Then if it really were a false breakout and it comes back to your stop before TP is hit, you are immediately starting to recover lost pips.

DrDave

that could be a way to trade but honestly, i would not be trading that way...i would rather wait and see the price action before entering...yes, i might miss a few, i might even lose a few but i believe that this is a much safer way of trading...

one of the better ways is to plot the high and lows of the control bars and put limit entries with SL of around 20 pips and just leave price to do its thing...u can try that out on a demo...
  • #153
  • Aug 3, 2011 4:32am Aug 3, 2011 4:32am
Quoting Hercs
NS, would you mind commenting on yesterday's short entry, please.

I marked what I regard as the "retesting M15-candle" (RED-arrow) just after my H1 chart "overheated" (also attached for clarity) and put its head through the CB-line which is shown here as a broken Aqua. Kindly confirm that my understanding is correct please.

Best wishes.

spot on mate...isnt it beautiful ? u can locate the control bar so very easily...and u get a trade worth hundreds of pips with a DD of less than 10...maybe u can just plot the highs and lows, place limit orders 5-10 pips away from the control bars with SL of about 20 pips and just let price do its thing....amazing...isnt it?
  • #154
  • Aug 3, 2011 5:30am Aug 3, 2011 5:30am
Quoting ns_karthik
that could be a way to trade but honestly, i would not be trading that way...i would rather wait and see the price action before entering...yes, i might miss a few, i might even lose a few but i believe that this is a much safer way of trading...

one of the better ways is to plot the high and lows of the control bars and put limit entries with SL of around 20 pips and just leave price to do its thing...u can try that out on a demo...
I prefer the beakout trades witha retest. But after the session closes, you know the market tends to range. So I suspect it would be possible to do range trading inside the control bar during thesse off hours.
To free Gazans of Hamas, use whatever it takes.
  • #155
  • Aug 3, 2011 8:23am Aug 3, 2011 8:23am
Quoting ns_karthik
spot on mate...isnt it beautiful ? u can locate the control bar so very easily...and u get a trade worth hundreds of pips with a DD of less than 10...maybe u can just plot the highs and lows, place limit orders 5-10 pips away from the control bars with SL of about 20 pips and just let price do its thing....amazing...isnt it?
===================

Thanks for your time, NS. Much appreciated.
Hercs
  • #156
  • Aug 3, 2011 10:28am Aug 3, 2011 10:28am
HI Karthik
today us time session GU touch m15 CB close not H1 close price. do you have any idea to explain this price action?

Many thanks.
Yisa
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  • #157
  • Aug 3, 2011 10:31am Aug 3, 2011 10:31am
Quoting yisa
HI Karthik
today us time session GU touch m15 CB close not H1 close price. do you have any idea to explain this price action?

Many thanks.
Yisa

can u post the hourly chart with the same line marked ....
  • #158
  • Aug 3, 2011 10:43am Aug 3, 2011 10:43am
H1 chart of GU
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  • #159
  • Aug 3, 2011 10:47am Aug 3, 2011 10:47am
Quoting yisa
H1 chart of GU

well, in the 1 hr chart, the line corresponds to the top of the control bar and you have price retracing to the top of the bar (+ or - 10-15 pips will always be there) and then going back up again...it just happens that the 15M bar is also a control bar...u need to use control bars on either hourly or daily or 15M....u need to choose which one is comfortable for u....lower TFs give more precise entries but many false entries....larger TFs need to have a leeway of anywhere between 15-40 pips (based on TF) but are much more reliable...
  • #160
  • Aug 4, 2011 1:52am Aug 4, 2011 1:52am
Hi Yisa

Something that may help you when looking at CBs on an hourly is do what u did here ie look at 15 min to see the bars that constituted that 1 hr CB.

In this case we had a large 15 min CB finishing very close to its high. Next bar is a doji which typically indicates indecision neither the bulls or the bears won in that 15 min interval.

Look at the next 2 15 minute bars. The 1st one is strongly bullish finishing v close to its high. 2nd on similar size but not quite as bullish finishing about 2/3 way up.

Put the sequence together.Bullish Balance Bullish Bullish.

So what do you think is LIKELY to happen when price revisits the area of indecision ? What happened there last time ? Demand overwhelmed supply ie there were lots of buyers there and some probably missed the the train north.

So it really doesnt come as a surprise when price revists that area that demand still overwhelms supply and you get a long tailed hammer followed by another strong bullish bar.

So try to think about what the control bar is telling you in terms of the balance of buyers and sellers.


Best regards,


V
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