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Tick, Minute, Volume, Momentum Charts - which do you use?
- Thread starter ToTrade
- Start date
Almost all traders, hedgers or investors, who watch the markets, use daily, minute, tick, range, volume or constant volume bar charting. If something else exits I would be interested in knowing what it is but I think I covered it all.
1. Daily Charts - Each Price bar is a varying (different) number of contracts or shares traded per bar. No two days trades exactly the same. This is the variable environment I speak of.
2. Minute Charts - Each Price bar is a varying (different) number of contracts or shares traded per bar. Each minute bar contains a different amount of volume. This is the variable environment I speak of.
3. Tick Charts - Each Price bar used to contain a specific number of transactions per bar but over the last year GLOBEX ruined that by grouping transactions per bar at their discretion. Regardless, each Price bar is a varying (different) number of contracts or shares traded per bar because each transaction is a varying (different) size. Each tick bar contains a different amount of volume. This is the variable environment I speak of.
4. Range Charts - Each Price bar is a varying (different) number of contracts or shares traded per bar because a new bar isn't created until a user defined range in price is exceeded. Each range bar contains a different amount of volume. This is the variable environment I speak of.
5. Volume Bar Charts - Each Price bar is suppose to contain a specific number of contracts or shares per bar but most charting companies ruined that by lumping transactions on the end of each bar at their discretion. Each volume bar contains a different amount of volume. This is the variable environment I speak of.
6. Constant Volume Charts - Each Price contains a specific user defined number of contracts or shares traded per bar. Regardless of time, range or ticks each price bar contains the exact same volume. This is the NON-variable environment I speak of.
MultiCharts and Ensign are the only charting software companies, that I am personally aware of, that offer Constant Volume Bar charting.
It is common knowledge that when testing ANYTHING one needs their test environment as stable and consistant as possible. Any fluctuation in the environment and it will nullify the results but yet when it comes to trading, traders are constantly trying to succeed using environments where their main ingredient (VOLUME) is in a state of flux on each bar.
1. Daily Charts - Each Price bar is a varying (different) number of contracts or shares traded per bar. No two days trades exactly the same. This is the variable environment I speak of.
2. Minute Charts - Each Price bar is a varying (different) number of contracts or shares traded per bar. Each minute bar contains a different amount of volume. This is the variable environment I speak of.
3. Tick Charts - Each Price bar used to contain a specific number of transactions per bar but over the last year GLOBEX ruined that by grouping transactions per bar at their discretion. Regardless, each Price bar is a varying (different) number of contracts or shares traded per bar because each transaction is a varying (different) size. Each tick bar contains a different amount of volume. This is the variable environment I speak of.
4. Range Charts - Each Price bar is a varying (different) number of contracts or shares traded per bar because a new bar isn't created until a user defined range in price is exceeded. Each range bar contains a different amount of volume. This is the variable environment I speak of.
5. Volume Bar Charts - Each Price bar is suppose to contain a specific number of contracts or shares per bar but most charting companies ruined that by lumping transactions on the end of each bar at their discretion. Each volume bar contains a different amount of volume. This is the variable environment I speak of.
6. Constant Volume Charts - Each Price contains a specific user defined number of contracts or shares traded per bar. Regardless of time, range or ticks each price bar contains the exact same volume. This is the NON-variable environment I speak of.
MultiCharts and Ensign are the only charting software companies, that I am personally aware of, that offer Constant Volume Bar charting.
It is common knowledge that when testing ANYTHING one needs their test environment as stable and consistant as possible. Any fluctuation in the environment and it will nullify the results but yet when it comes to trading, traders are constantly trying to succeed using environments where their main ingredient (VOLUME) is in a state of flux on each bar.
Quote from ToTrade:
Has this made a big difference in your trading?
Yes!
Constant Volume Bar (CVB)
Read up on ProfLogicâs posts and youâll gather tons of information and the basis for using Constant Volume Charts. Prof has an excellent thread on ET that goes into detail about his setup, just ignore some of the hyped terminology. Essentially he provides the big picture but youâll need to define your own system.
Constant Range Bar (CRB)
If you want a different perspective of the market, CRB charts are hard to beat. While CVB charts may eliminate the volume variable they donât eliminate the price range variable. CRB charts eliminate both volume and price range variables leaving you with constant price action and nothing more. What could be more pure than a CRB chart?
I use CVB charts for my longer term systems and CRB charts for short term trading. Both are very useful tools in their respective systems and both far exceed tick charts in my opinion.
I trade two ETFs: IWM and XLE.
I have three charts for ES:
- A 2-min bar chart with vol
- A 5-min candle chart with vol/MAs
- A 15-min candle chart with vol/MAs
Two charts for each ETF:
- A 2-min bar chart with vol/atr
- A 5-min candle chart with vol/MAs
Finally a one-minute NYSE tick chart with MA.
I check the daily charts for ES, IWM, and XLE before the trading day begins.
I have three charts for ES:
- A 2-min bar chart with vol
- A 5-min candle chart with vol/MAs
- A 15-min candle chart with vol/MAs
Two charts for each ETF:
- A 2-min bar chart with vol/atr
- A 5-min candle chart with vol/MAs
Finally a one-minute NYSE tick chart with MA.
I check the daily charts for ES, IWM, and XLE before the trading day begins.