Wide Range Bars: A Guide for Crypto Traders using CoinRotator TradingView Indicator
The CoinRotator Indicator is a powerful tool for crypto traders, but what happens when it fires an alert and the bar that closes to initiate the alert is a Wide Range Bar (WRB)? This article aims to address this specific situation and guide you on how to navigate the risks associated with WRBs when using the CoinRotator Indicator.
The Challenge of Wide Ranging Bars (WRBs)
WRBs are strong indicators of market momentum but come with their own set of challenges, especially when CoinRotator issues a fresh trend alert.
🚨 Critical Point: If a WRB appears when a fresh trend alert is issued by CoinRotator, it’s a strong signal to exercise caution. WRBs indicate that your stop will be much further away from your entry point, thereby increasing your risk. This is the time to consider reducing your position size to manage this elevated risk effectively.
Understanding the CoinRotator Indicator
The CoinRotator Indicator is not a standalone trading system but an aid for managing your trades and understanding the visual trend status. It uses bands to signify support and resistance levels and employs color-coded triangles to signal trading actions.
Utilizing the CoinRotator Indicator with WRBs
- Confirm the Trend: Use CoinRotator.app to confirm the trend status of your chosen coin and review the daily chart for complementary trends from the past 1–2 days.
Check here on how CoinRotator works. https://coinrotator.app/faq
2. Check for WRBs: Before taking a position based on a fresh trend alert from CoinRotator, check for the presence of WRBs.
3. Adjust Position Size: If WRBs are present, reduce your position size to manage the increased risk effectively.
4. Use the Middle Band: Aim to take trend trades when the price aligns with the middle band of the CoinRotator Indicator.
Trading Strategies with WRBs
Dollar-Cost Averaging (DCA)
Only buy when the market is in a heavy downtrend using either Green triangles or orange triangles, but only after the market has sold off to an extreme. Be extra cautious if WRBs are present.
Mean Reversion Technique
Wait for the price to enter the outer bands, then “probe against the trend” once an orange triangle appears and the next bar has begun. If WRBs are present, use wide stops and **reduce your position size**.
Setting up CoinRotator Alerts with WRBs
You can set up built-in alerts in TradingView for the CoinRotator Indicator. Be advised that these alerts can form before a candle completes, so they might disappear. If WRBs are present when an alert fires, exercise caution and consider reducing your position size.
A Note of Caution
The CoinRotator Indicator is a powerful tool but not a substitute for a comprehensive trading system. Always employ sound risk management, especially when WRBs appear in a fresh trend alert from CoinRotator.
The CoinRotator Indicator is an invaluable tool for crypto traders, but its effectiveness can be compromised when WRBs appear during a fresh trend alert. The key takeaway is to adjust your position sizes and exercise caution in these situations for effective risk management.
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