Why do people use Volume, Range and Tic charts?

[NZDSPeCIALISt]

The first method I mentioned of setting up your tick charts has your tick count reduced to the 1 minute level and then multiples of this are used to have time proxy tick charts (ie 3, 15, 30 and 60)

An alternate way to construct your tick chart sequence is to have charts that have bars per day according to fib numbers. As an example:

Suppose the average number of ticks/day over the last week is:

5400 ticks during the normal trading hours/day.


You can construct the chart sequence that you look at so that the number of bars you have follows a fib sequence.

Example.
5400 ticks/day (active time) to get 55 bars (again in the active time) = 5400/55 or a 99 tick chart to have an average of 55 bars during the normal trading period.

If you wanted to follow the ratio 21,34,55,89,144 bars

then your tick charts would be set as follows:

38t ,61t ,99t ,159t ,258t

If you timed this above sequence it would average out at something like this:

4.6, 7.5, 12, 19, 31.5 (all in minutes). Keep in mind during the active market times (such as after a data release), the bars would be printing at a rate of say 5 times faster - the 38 tick in this example would take a only a minute to print (instead of 4.6) and so on down the line.

Your looking for confluence of signals across this spectrum of charts btw.

 

[fearless9]

For what it is worth.
I always include all data.

Not through any great scientific research that I have undertaken.

But rather that life has taught me that to be exclusive is to be subjective, which is the very thing that I am trying not to be.

 

[MidKnight]

Quote from dcraig:

OK, I'll rephase it. Why do the market participants care if 3 x 3 = 9 ?

It's quite clear that in construction if 2 x 4's are required and 1 x 1's are used, the thing is going to fall down and the people involved do care about this. All this can be exactly calculated and figures derived within the constraints of cost and safety.

I see no reason to believe that market participants give a fig about perfect squares. Why should they ?

Yes, I wondered that too dcraig. Seems like voodoo. Another thing, as contracts grow in volume surely they will need to be re-calibrated, no?

How I had been using volume charts for the past few months is recalibrating them weekly based on how fast i want to see the bars print. Taking that number of time and dividing it by the 20 day avg volume.

Kind regards,
MK

 

[ProfLogic]

Quote from dcraig:

OK, I'll rephase it. Why do the market participants care if 3 x 3 = 9 ?

It's quite clear that in construction if 2 x 4's are required and 1 x 1's are used, the thing is going to fall down and the people involved do care about this. All this can be exactly calculated and figures derived within the constraints of cost and safety.

I see no reason to believe that market participants give a fig about perfect squares. Why should they ?

It is just an example of how to proportionately lay out your charts so each is an exact segment of a slower chart. Like the Russian babushka or nesting dolls. Laying your charts out in this manner makes viewing the Trend and the oscillations inside them perfectly clear and consistent. One must first understand the simple complexities of "Trend" and why it would be useful to view the markets in such a completely structured way.

 

[ProfLogic]

Quote from fearless9:

For what it is worth.
I always include all data.

Not through any great scientific research that I have undertaken.

But rather that life has taught me that to be exclusive is to be subjective, which is the very thing that I am trying not to be.

Very well stated and straight to the point.

 

[Lamont_C]

I'd like to thank PL for persevering in this thread in spite of MS's attempts to derail it yet again. I'd also like to thank MS for backing off.

I started using volume bars some time ago due to PL's posts on the subject and my own subsequent investigations and the clarity they provide is remarkable, akin to P&F charts without the disadvantages of P&F charts. I also began "nesting" them via squares, on my own, and am glad to see that I'm not alone in this practice. VB charts also solved the problem of what to do about the "problem" of overnite data.

I encourage anyone who's interested to keep an open mind and play with this.

LC

 

[MidKnight]

I read PLs stuff on the squares, but I'm a simple guy. Can you break it down a little what you mean? I've always just done something like pic X volume chart and times by 3 or 4 for a higher timeframe. Depending on how it looked I'd keep one of the two.

Would like to understand what you guys mean here though pls.

Kind regards,
MK

 

[ProfLogic]

Quote from MidKnight:

Yes, I wondered that too dcraig. Seems like voodoo. Another thing, as contracts grow in volume surely they will need to be re-calibrated, no?

How I had been using volume charts for the past few months is recalibrating them weekly based on how fast i want to see the bars print. Taking that number of time and dividing it by the 20 day avg volume.

Kind regards,
MK

The markets do not trade based on time they are based in contracts or shares. It is like saying that you have to read a book fast to get anything out of it because if you read it slow and methodically, where your comprehension would surely increase, that would be too efficient.

How fast the bars prints doesn't change the content of the bars.

There are individuals that do strictly trade based on time, the moon, crystal balls or any other varying, non static, vibrating and noisy environments. Now to me, that is shear voodoo. To me it's like watching TV from the inside of a paint shaker.

When I started researching price I looked at Minute Bars (strict time) & Tick Bars (strict transaction) increments. GLOBEX has since destroyed what little consistency Tick Charts did have a few months ago. Finally, after researching those two for over 10 years in every way, shape, form and combination I settled on Volume Bars. Volume Bars are simply consistent, quiet noisy markets and lend themselves to be applied to different traders specific trading styles.

I'm a truly open minded individual. If you have some research you would like to share which is based on something other than just an opinion, I'm all ears, eyes and grey matter.

 

[fearless9]

I also have been playing around nesting out ( is there such a phrase) and I can see the logic behind the thinking.
Certainly my trend charts are more in line with my trade chart ... I can see that.

I may speed up my trade chart a tad as squaring puts more mileage between charts ... more than I have been accustomed to that is. I used to multiply by the magic numero 3.

You are certainly stretching me PL .. muchas gracias

 

[ProfLogic]

Quote from MidKnight:

I read PLs stuff on the squares, but I'm a simple guy. Can you break it down a little what you mean? I've always just done something like pic X volume chart and times by 3 or 4 for a higher timeframe. Depending on how it looked I'd keep one of the two.

Would like to understand what you guys mean here though pls.

Kind regards,
MK

MK look back to the post where I listed the different chart increments. Those were examples only, you can create your own. Use a slower one for Trend and the next fastest one for entries and exits.