I've just discovered that this thread overlaps one that I started recently so I thought I would cross reference it here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=34084&perpage=6&pagenumber=1
I use and favour candles but I see a lot of recent claims that line or bar charts are more informative for pure price reading. What needs to be exploited (YM) are the gyrations .. the major daily upswings and downswings (which elsewhere are referred to as trends although on a daytrading basis they are really mini-trends). It is semantics; I prefer the word gyrations because it gives me personally the best description of what the market does.
FWIW I have added constant price bars (aka mb) to the dll for sierrachart that does constant volume and volumetick bars. http://www.elitetrader.com/vb/showthread.php?s=&postid=568507#post568507
Yes, a very good summary of bar types Tripack. I'm repeating to an extent what I've said on another thread but in summary my observations are that it is the time frame (whether 10 mins is better than 5 mins) for minute bars or the number of ticks or the volume number you use that provides the relevant or effective framework for your methodology to exploit. On YM I have been using min chart/s to watch an accurate picture of the gyrations developing premarket through the Open and into the initial 15/40 minutes of the market. Then I have been mostly looking at YM tick charts, YM volume charts and INDU tick charts However I've also been trialing Range Bars (YM and INDU) and found that they can perform for you very well if they fit your established methodology and trading tactics as they do mine. Each range bar compressing or expanding time, tick & volume to fit X number of points may well not suit the detection and exploitation of certain specific set-ups or trading styles. Would range bars hinder scalping (which I don't do)? This is where a scalper or other range bar users need to come in and provide comparative trading experiences.
I'm just adding an example of when range bars can be so effective. Today when the YM/INDU price in the latter part of the market stalled for about an hour all that noise/very narrow range stuff was absorbed by one or two 10 point range bars. It can keep your chart picture cleaned up at all times IMO. As I've said before, while they are fine for me, it also may well be that range bars are unsuitable for many set-ups and a number of trading styles. This is just my input.
Today was not typical of course but condensed the market (YM) did little more than a couple of minor gyrations. There were extended stalls in price in the session. Now with range bars, say set at 10 or 11 points (or lower if that is your requirement), they absorb all the noise and just give you a tight minimal much cleaner clearer chart picture obviously over minute bars but also range bars improve upon tick and volume bars in these circumstances. I don't know whether there are others or many others on ET using range bars but I'm mindful of other methodologies or styles of other players. You will always need the chart visualization that best fits your particular requirements. FWIW any way.
Great post, but I find that anything less than 10pts YM or the ES equivalent (1 pt) will generate too many random noise signals to make it worthwhile to trade'em. While you may think you are getting more trading opportunities, the quality of the signal will degrade in proportion to the number of signals generated. I also find that it helps immeasurably to measure your performance on a weekly basis, not daily. Good trading all, JJ
I think this might be the next great message posts! I've been watching: 1). Line charts. 2). Bar charts. 3). Candle charts. 4). HH-LL Price bars. 5). MA price bars. 6). RSI price bars All in E-Signal. Only problem is I am not sure which is the best one to trade with? Any suggestions would be appreciated!!! BY THE WAY...I trade the SPM using: 1). 8SMA +2 2). 3SMA +2 3). With MACD 12-26-9 I've been trading this way for over a year now and I am still here. I also use a price band... 1). 2SMA +1 hi. 2). 2SMA +1 Lo. What I really like about the SPM is the + offset in the SMA's. I think this is where the secrets to trading are. Trader28 really gave us a great little system. Now it is up to you to learn it. The next great secret is in the price bars! Any suggestions!!! Thanks snarlyjack
================= Sjack; Mountain charts [or even barcharts if you like skinny lines ]are a nice change of pace; but for sure like & prefer candlecharts. ===============================