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Quote:
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Educational chart attachments are posted at the bottom after the Volatility Breakouts
discussion.

First of all, there are no refunds if you access advance tutorial chapter 4 contents or
download any of our other fee-base digital content (files or charts). More information about
our refund policy @ http://www.thestrategylab.com/RefundPolicy.htm
With that said, if you do not have a trade signal strategy to use with advance tutorial
chapter 4...it's highly recommended you learn/apply the Fading Volatility Breakout
(FVB) trade signal strategy with any of the discussed WRB Zone price action definitions in
this advance tutorial chapter as instructed in the learning/application route message post
in your private thread because the FVB strategy is a teaching strategy that contains key
price action concepts. Yet, if you've purchased the advance tutorial chapters 5 - 12
package...you're also given access to the Directional Creeper Movement (DCM) trade signal
strategy. The DCM strategy is one of the most important trade signal strategy I use and its
the foundation for the Volatility Trading Report (VTR) trade signal strategies.
Fading Volatility Breakout Strategy (FVB)
@ http://www.thestrategylab.com/wrb/forum/viewtopic.php?f=55&t=59
Also, your participation (asking questions, posting charts, posting DOKs and using the realtime chat room) is critical in your learning and obtaining proper support so that we can
show you how useful the advance tutorial chapters are to your trading. Further, if you have
not learned or remain confused about the concepts discussed in the WRB Analysis Tutorials
Chapters 1, 2 and 3 study guide...you are not ready to learn any thing discussed here in
advance tutorial chapter 4 nor ready to learn our trade signal strategies. Thus, please

consult with us about any thing that remains confusing to you concerning the basic tutorial
chapters 1 - 3.
Quote:
Many of the older DOKs outside this message post study guide may or may not correlate
with the newest version of the advance tutorial chapters 1 - 12 because newer versions of
the advance tutorial chapters have new rules to correlate with today's market conditions,
corrections and/or new information that didn't exist when the older DOKs were posted
years ago. Thus, don't get confused or think there's an error if you see older DOKs that
does not correlate with some of the rules that's discussed in the most current advance
tutorial chapter nor does such imply these price action definition rules are flexible because
the rules are not flexible unless you're using your own personal custom version of the price
action definitions.
In addition, advance tutorial chapter 4 requires a minimum of 30 days of learning via
hindsight chart analysis and practicing via real-time market conditions so that you'll be able
to recognize key components of the price action definitions prior to real money trade
application. Further, this advance tutorial chapter requires a demonstration of
knowledge (DOK) from you so that you'll remain qualified for access to new resources &
services associated with advance tutorial chapter 4 that will be released in the future. The
DOKs gives me information about where you are at in the Learning/Application Route. If
you don't understand, please re-read the Learning/Application route message post in your
private thread.

Quote:
The advance tutorial chapters 4 12 study guides and Fading Volatility Breakout (FVB) trade
strategy are not files like the basic tutorial chapters 1 - 3. In contrast, each advance
tutorial chapter has its own thread with the study guide text message that's embedded or
attached with charts for you to copy/print due to security and maintenance reasons. Yet,
you can easily save/copy/paste the education information into any word processor (e.g.
Microsoft Word, Adobe pdf, Lotus Symphony, OpenOffice, Xiosis Scribe, Google Docs, Adobe
Buzzword, Mariner Write, Nisus Writer Pro and Pages). In addition, the DOKs and replies to
questions from other clients helps ensure that you'll also be learning from clients that
have mastered the key concepts from the advance tutorial chapters.
Quote:
Its highly recommended that you make a quick checklist of the rules for each price action
definition and then print it out...keep it on your desk while trading for easy access to help
reduce identification errors. Also, it's your responsibility to copy/print the information for
advance tutorial chapter 4 (including the charts) while learning because there will be times
when advance tutorial chapter 4 will be either unavailable due to thread maintenance,
forum maintenance or server problems.

Lets Get Started


These are the primary difference between advance tutorial chapter 4 and basic tutorial
chapter 2:
Basic tutorial chapter 2 involves a key market event whereas the advance chapters 4 12 do not use key market events.
Advance tutorial chapter 4 has the requirement that each interval within the
contracting volatility (there must be a minimum of three smaller intervals) between v2
WRB interval and v1 WRB Hidden GAP Breakout interval...each of those contracting
volatility intervals must share a tick with the v2 WRB interval whereas basic tutorial
chapter 2 strong continuation #2 price action definition does not have the requirement that
the contracting volatility intervals must share a tick with the v2 WRB interval.
Basic tutorial chapter 2 strong continuation #2 price action definition allows for the v2
interval or the v1 interval to qualify as a WRB Zone if its a WRB Hidden GAP interval and
the "first WRB Hidden GAP" interval at/after the KME. In contrast, here in
the advance tutorial chapter 4, the v1 interval is the only interval that can qualify as the
WRB Zone.
We've expanded the definitions of Strong Continuation price action involving Volatility
WRB Zone in comparison to what you've learned in Chapter 2. The additional alternative
definitions concerns strong continuation price action (definition #3 and #4) as explained
below with the other definitions.
Quote:
There are three key components involved in the swing points or strong continuation price
action in this advance tutorial chapter 4 and we begin their price action definitions by
discussing the specific rules that differentiates each definition. Later, further below, we
then discuss in a section called the Common Rules that's required for all the price action
definitions here in advance tutorial chapter 4.
v2 WRB Expansion Volatility Interval ---> Contracting Volatility Intervals ---> v1 WRB
Hidden GAP Volatility Breakout Interval
Three Key Components (v2, contracting volatility and v1) Review
v2 WRB Expansion Volatility Interval: The v2 WRB interval can be different as either a
WRB (no Hidden GAP) or WRB Hidden GAP depending upon the below price action
definitions that differentiates swing points and strong continuations from each other.
Therefore, whenever you see the words "v2 WRB" in any of the price action definitions...it
implies that its ok for the v2 to be a WRB Hidden GAP interval or just a WRB interval. v2
interval must be larger than its prior most recent three intervals...this is the minimum
requirement for a WRB interval as defined in basic tutorial chapter 1. The prior most
recent three intervals are also called contracting volatility intervals (never less than three
intervals).
Note: Currently, the v2 interval does not have a rule that requires it to be a breakout
interval with its interval closing above/below the range of its prior most recent three
smaller intervals (contracting volatility). Yet, just be aware that the rule may apply in the
future because many members and myself are already applying v2 interval as a v2
WRB/WRB Hidden GAP Breakout interval.
Contracting Volatility Intervals: These particular intervals of concern are involved
between the v2 WRB interval and v1 WRB Hidden GAP Breakout interval. They consist of a
minimum of three intervals (never less than three) but can involve more than three
intervals. Thus, all the intervals between v2 WRB interval and v1 WRB Hidden GAP Breakout

interval are called contracting volatility. All of these intervals (each interval) between v2
and v1 must have shared at least one tick with the v2 interval. Further, if there's an interval
within the contracting volatility between v2 and v1 that does not share a tick with any tick
of the v2 interval...it invalidates the v2 WRB interval and it invalidates the v1 WRB Hidden
GAP Breakout interval as a WRB Zone for Advance Tutorial Chapter 4.
v1 WRB Hidden GAP Volatility Breakout Interval: This WRB Hidden GAP is defined as
a volatility breakout interval when its interval has completed with its Close above/below
the range of all of the contracting volatility intervals that's between the v2 WRB interval
and the v1 WRB Hidden GAP Volatility Breakout interval.
If any of the above key components are missing, you cannot use the v1 WRB Hidden GAP
Breakout interval as a WRB Zone to validate trade signals for trading. Thus, all three of the
above key components must be present along with the qualifying price action definition
discussed below.
Also, as a reminder, you can use either the BODY (price area between Open and Close) of
the interval, RANGE (price area between High and Low) of the interval or Hidden GAP
area of the interval as your WRB Zone regardless if you're using bar charts or candlestick
charts. Its your choice but whichever you decide to use...you must be consistent in using
it.
With that said, here in the advance tutorial chapter 4, the identification of the WRB Zone
involves the v1 WRB Hidden GAP Breakout interval. This is a very common (appears every
trading day multiple times on intraday charts or a few times per month on daily charts) as
swing point WRB Zones or strong continuation WRB Zones via the price action definitions
discussed below. Yet, they are defined below for traders that do not how to define any type
of swing point or strong continuation price action. However, if your more comfortable in
using your own well defined definitions of a swing point or strong continuation definitions
as WRB Zones...please use your definitions instead of my personal definitions. If you're
going to use your own price action definitions instead of ours discussed below...its highly
recommended you merge some of the key concepts below with your own price action
definitions to keep the integrity of WRB Analysis.
Quote:
I've included chart examples below that have white backgrounds (saves ink cost when
printing and less eye strain when viewing) along with other charts with black backgrounds
because some clients prefer the white background charts while other clients prefer the
black background charts. Also, all charts below are charts posted by clients in their DOKs
except for the generic charts of TheStrategyLab.com that are posted near the bottom of
this study guide.
Swing

Point

Definitions (two

different

types)

My use of the words Up interval and Down interval in the below price action definitions
implies that the Up interval has its Close > Open while the Down interval has its Open >
Close to prevent confusing traders that uses a different color scheme for their chart
intervals
in
comparison
to
the
below
chart
examples.
#1) Defined as a change of price direction that involves the contracting volatility or the v2
WRB interval as the swing point high (bearish) or swing point low (bullish) that produces a
price action that follows in which it fills in the price action of any prior WRB Hidden GAP
interval that was unfilled along with producing change of price direction that contains a
minimum of two consecutive (back to back) same color intervals prior to the next swing
point. Yet, if v2 WRB interval is a WRB Hidden GAP interval, it cannot be used as
the prior WRB Hidden GAP interval. Thus, the prior WRB Hidden GAP interval must occur
before
the
v2
WRB
interval.

The fill of the prior WRB


action at/after the
v1

Hidden GAP
WRB

interval must
Hidden

occur
GAP

in

the price
interval.

Also, each interval within the contracting volatility must have shared at least one tick with
any price within the range (price area between High and Low) of v2 WRB interval.
Bullish Swing Point - v2 WRB is a Down WRB interval and v1 WRB is a Up WRB Hidden GAP
breakout interval that closed above the prior contracting volatility intervals.
Yet, if v2 is an Up WRB interval, the low price of the v2 interval or the low price of the
interval before v2 must be the swing point low. The Close of v2 interval must also
be below the low price of the prior WRB Hidden GAP interval.

Bearish Swing Point - v2 WRB is a Up WRB interval and v1 WRB is a Down WRB Hidden GAP
breakout interval that closed below the prior contracting volatility intervals.
Yet, if v2 is Down WRB interval, the high price of the v2 interval or the high price of the
interval before v2 must be the swing point high. The Close of v2 interval must also
be above the high price of the prior WRB Hidden GAP interval.

#2) Price action was declining/rising into the v2 interval and then the price action
produced "contracting volatility". There must be a minimum of three intervals in the
contracting volatility and each of these intervals can be either a Close = Open, Close >
Open or Open > Close. Yet, one of the intervals in the contracting volatility is the low price
of a bullish swing point or high price as a bearish swing point. Also, each interval within
the contracting volatility must have shared at least one tick with any price within the range
(price area between High and Low) of v2 WRB interval. Next, after the contracting
volatility intervals, the price action was declining/rising into the v1 interval.
Bullish Swing Point - Price action was declining into the the v2 WRB interval and then price
action produced contracting volatility intervals. Next, the price action reversed direction

back upwards to produce a v1 Up WRB Hidden GAP interval that's amongst three
consecutive higher closing intervals and each interval is (Close > Open) prior to the next
swing
point.
Price Decline --> v2 Interval --> Contracting Volatility Intervals --> v1 Interval --> Three
Consecutive
Higher
Closing
Intervals
Also, the v1 Up WRB Hidden GAP interval that's amongst the three consecutive higher
closing intervals, that v1 Up WRB Hidden GAP must have also shared at least one tick with
the range of the prior contracting volatility intervals to prevent looking like a continuation
price action instead of as a swing point.

Bearish Swing Point - Price action was rising into the v2 WRB interval and then the price
action produced contracting volatility intervals. Next, the price action reversed direction

back downwards to produce a v1 Down WRB Hidden GAP interval that's amongst three
consecutive lower closing intervals and each interval is (Open > Close) prior to the next
swing
point.
Price Rising --> v2 Interval --> Contracting Volatility Intervals --> v1 Interval --> Three
Consecutive
Lower
Closing
Intervals
Also, the v1 Down WRB Hidden GAP interval that's amongst the three consecutive lower
closing intervals, that v1 Down WRB Hidden GAP must have also shared at least one tick
with the range of the prior contracting volatility intervals to prevent looking like a
continuation price action instead of as a swing point.

Also, once in awhile, you may see a price action that correlates with more than one of the
above
swing
point
definitions
and
that's
OK.
Strong

Continuation

Price

Action

Definitions (four

different

types)

My use of the words Up interval and Down interval in the below price action definitions
implies that the Up interval has its Close > Open while the Down interval has its Open >
Close to prevent confusing traders that uses a different color scheme for their chart
intervals
in
comparison
to
the
below
chart
examples.
#1) Defined as producing two or more same color WRB Hidden GAP intervals (they don't
need to occur consecutive as in back to back) in which the v1 WRB Hidden GAP is the
breakout interval that closed above/after the most recent reaction high (bullish
continuation) or closed below/after the most recent reaction low (bearish continuation)
price action and then there's another WRB Hidden GAP interval that must have
occurred after the v1 WRB Hidden GAP breakout interval before the next swing point.

Also, each interval within the contracting volatility must have shared at least one tick with
any price within the range (price area between High and Low) of v2 WRB interval.
Reaction High/Low ---> v2 ---> contracting volatility ---> v1 breakout above/below the
reaction
high/low
--->
Another
WRB
Hidden
GAP
Reaction High - Price action had a minimum of two consecutive Up intervals (Close >
Open) with higher closes before the reaction high and then price decline after the reaction
high to produce a minimum of two consecutive Down intervals (Open > Close) with lower
closes.
In addition, the line drawn (left to right) from the reaction high to the v1 WRB Hidden GAP
breakout interval, that line must not travel through any tick of any price action...between
the
reaction
high
and
the
v1
WRB
Hidden
GAP
breakout
interval.
Note: Sometimes a reaction high will also correlate as a swing point price action
definition.

Reaction Low - Price action had a minimum of two consecutive Down intervals (Open >
Close) with lower closes before the reaction low and then price rising after the reaction
low to produce a minimum of two consecutive Up intervals (Close > Open) with higher
closes.
In addition, the line drawn (left to right) from the reaction low to the v1 WRB Hidden GAP
breakout interval, that line must not travel through any tick of any price action...between
the
reaction
low
and
the
v1
WRB
Hidden
GAP
breakout
interval.
Note: Sometimes a reaction low will also correlate as a swing point price action definition.

#2) Defined as a price action that produces a v2 WRB (expanding volatility) followed by a
minimum of three small range intervals (contracting volatility) that's then followed by a v1
WRB
Hidden
GAP
(expanding
volatility)
in
the
same
direction.
In addition, the contracting volatility intervals between v2 and v1, those contracting
volatility intervals does not retrace the range of the v2 WRB interval and (plus)
it's prior three intervals. Further, each interval within the contracting volatility must have
shared at least one tick with any price within the range (price area between High and Low)
of
v2
WRB
interval.
Bearish Continuation - Price action was declining that's defined as containing a minimum of
two Down intervals (Open > Close) with lower closes before and above the close of the v2
Dark WRB then followed by contracting volatility that traverses into a v1 Down WRB Hidden
GAP Breakout interval in which the price action continues declining (it contained a
minimum of two Down (Open > Close) intervals with lower closes after and below the close
of the v1 Down WRB Hidden GAP Breakout interval prior to the next swing point.

Bullish Continuation - Price action was rising that's defined as containing a minimum of two
Up intervals (Close > Open) with higher closes before and below the close of the v2 Up WRB
then followed by contracting volatility that traverses into a v1 Up WRB Hidden GAP
Breakout interval in which the price action continues rising (it contained a minimum of two
Up intervals (Close > Open) with higher closes after and above the close of the v1 Up WRB
Hidden GAP Breakout interval prior to the next swing point.

Note: v2

interval

and

v1

interval

are

the

same

color

intervals.

#3) Defined as producing same color v2 and v1 intervals in which both are WRB Hidden GAP
intervals. Also, each interval within the contracting volatility must have shared at least
one tick with any price within the range (price area between High and Low) of v2 interval.
In addition, the v1 interval is a Volatility Breakout interval with the following price
action prior to
the
next
swing
point.
Bullish Continuation - v2 interval must have the bodies of its prior most recent contracting
volatility < body mid-point of v2 interval or v1 interval must have the bodies of the prior
contracting
volatility
<
body
mid-point
of
v1
interval.
Note: You can use the range to replace the use of bodies...its your choice.

Bearish Continuation - v2 interval must have the bodies of the prior contracting volatility >
body mid-point of v2 or v1 interval must have the bodies of the prior contracting volatility
>
body
mid-point
of
v1
interval.
Note: You can use the range to replace the use of bodies...its your choice.

#4) This involves a failed counter-thrust between two same color v2 and v1
intervals prior to the next swing point. Also, each interval within the contracting volatility
must have shared at least one tick with any price within the range (price area between
High
and
Low)
of
v2
interval.
Bearish Continuation - Defined as a price action that produces a v2 Down WRB interval
followed by further price declines (a few ticks at the minimum) that's followed by a
counter-thrust back upwards that fails to retrace the mid-point of v2 Down WRB interval or
fails to fill in a v2 Down WRB Hidden GAP interval and the failed counter-thrust is then
followed by a v1 Down WRB Hidden GAP interval that closes lower...the close of v2 Down
WRB interval > close of v1 Down WRB Hidden GAP interval.

Note: v1 Down WRB Hidden GAP interval body length > v2 Down WRB interval body length
(e.g. v1 body is 8 ticks long and v2 body is 6 ticks long). Also, you can use the range to
replace
the
use
of
body...its
your
choice.
Bullish Continuation - Defined as a price action that produces a v2 Up WRB interval
followed by further price rises (a few ticks at the minimum) that's followed by a counterthrust back downwards that fails to retrace the mid-point of v2 Up WRB interval or fails to
fill in a v2 Up WRB Hidden GAP interval and the failed counter-thrust downwards is then
followed by a v1 Up WRB Hidden GAP interval that closes higher...the close of v2 Up WRB
interval < close of v1 Up WRB Hidden GAP interval.

Note: v1 Up WRB Hidden GAP interval body length > v2 Up WRB interval body length (e.g.
v1 body is 8 ticks long and v2 body is 6 ticks long). Also, you can use the range to replace
the use of body...its your choice.
In addition, once in awhile, you may see a price action that correlates with more than one
of the above swing point definitions and that's OK.
Reminder: The definitions above are for traders that do not know how to recognize a swing
point or strong continuation price action. Thus, if you have your own personal
interpretations of a swing point or strong continuation price action, we highly recommend
you use your own definitions instead of using our definitions.

Common Rules (critical rules)


Some of the key concepts are redundantly repeated. Its intentional to ensure
its not easily forgotten.

Quote:
The below rules are common rules you need to remember because they are rules you'll see
in each swing point and strong continuation price action definitions. In fact, if you're having
learning/application problems of advance tutorial chapter 4 price action definitions...its
highly recommended that you review again the below common rules prior to
learning/applying the rules that differentiate each swing point price action and each strong
continuation price action.
Key Market Events (KME) are not involved here in Advance Tutorial Chapter 4.

WRB Zones we are interested in for discussion here in Advance Tutorial Chapter 4
involves only the v1 WRB Hidden GAP interval as a volatility breakout interval
of all intervals between v2 WRB interval and the v1 WRB Hidden GAP interval.
v2 interval can be a WRB interval or a WRB Hidden GAP interval unless the one of the
price action definitions specifically states that the v2 interval must be a WRB Hidden GAP
interval.
Note: To qualify as a v2 WRB interval...it must be larger than its prior most recent three
intervals...these most recent three intervals are called contracting volatility intervals
(never less than three intervals). In contrast, there may be more than three intervals
between the v2 WRB interval and the v1 WRB Hidden GAP Breakout interval... all of the
intervals between v2 WRB interval and the v1 WRB Hidden GAP Breakout interval are also
called contracting volatility (there must never be less than three intervals). In
addition, all of the contracting volatility intervals between v2 WRB interval and v1 WRB
Hidden GAP Breakout interval must be smaller than v2 WRB interval and smaller than the v1
WRB Hidden GAP Breakout interval. Therefore, don't make an error in only measuring the
v1 WRB Hidden GAP Breakout interval against its priormost recent three intervals if there
are more intervals between v2 WRB interval and v1 WRB Hidden GAP Breakout interval.
v2 interval is measured against its prior most recent three consecutive smaller intervals
and then against all of the intervals between v2 interval and v1 interval.
v1 interval is measured against all of the intervals between v2 interval and v1 interval.
v1 WRB Hidden GAP Breakout interval can only be confirmed as such after the
completion of the interval after the breakout interval to determine if the breakout interval
is
a
WRB
Hidden
GAP.
Volatility Breakouts is defined as a breakout interval that upon completion of the
interval...the breakout interval Closing price is (above or below) the range of its
contracting volatility intervals (price area between highest high and lowest low of the
contracting volatility intervals).
Range of contracting volatility intervals between the v2 interval and v1 interval is
measured as the price area between the highest high and the lowest low of the contraction
volatility
intervals.
Contracting volatility intervals have their own Resistance area (highest high of the
intervals) and their own Support area (lowest low of the intervals). Just as important, the
v2 interval has its own S/R areas and the v1 interval has its own S/R area.
These S/R areas are only important whenever the price action returns to the area.
Each interval within the contracting volatility must have at least one tick shared with
any tick of the v2 interval. Yet, it's ok for any of the contracting volatility intervals to close
outside the range of the v2 interval after sharing a tick with the v2 interval.
WRB's are allowed to occur within the contracting volatility. Yet, the v2 interval and
the v1 interval must still be larger than all contracting volatility intervals...including any
WRBs
amongst
the
contracting
volatility
intervals.
Note: Small WRB Hidden GAP intervals are not allowed to occur between the bigger v2
interval
and
the
bigger
v1
interval.
v1 WRB Hidden GAP interval must be a breakout of all (each) of the contracting
volatility intervals between v2 WRB interval and v1 WRB Hidden GAP interval. For example,
if there are ten intervals between v2 and v1...that v1 WRB Hidden GAP interval must be a
breakout of allten intervals that represent the contracting volatility intervals.

There are two groups of volatility expansion called Reversals (swing points)
and Continuations (strong
continuations).
Lifespan of a v1 WRB Hidden GAP Breakout interval as a WRB Zone will end as soon the
price action fills completely the WRB Zone. Therefore, whatever trade signal strategies
you're using...your trade signals are only valid if they occur within a WRB Zone that's
unfilled. Yet, if the price action that filled the WRB Zone was your trade signal...your trade
signal is still valid for trading.
Chart Annotation Information:
These are not additional rules...they are an explanation of my annotations on the generic
charts so that you'll have a quick reference when studying real charts of DOKs posted by
other members. Recommended that you print out the attached generic charts for Advance
Tutorial Chapter 4.
WRB Zone of v1 is highlighted via the color green.
WRB Zone of the contracting volatility intervals between v2 and v1 are highlighted via
the circled area. Contracting volatility intervals represents price action that are smaller
than the v2 interval and smaller than the v1 interval in comparison.
v1 WRB Hidden GAP Breakout interval and v2 WRB interval are WRB's that represent
expanding volatility in comparison to their prior contracting volatility intervals.
Green solid line with arrow represents price rise and red solid line with arrow
represent price decline.
Note: Not shown on the generic charts are the S/R areas of v2 WRB interval, S/R areas of
contracting volatility intervals and S/R areas of the v1 WRB Hidden GAP interval.
Attachment:

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