Why do people use Volume, Range and Tic charts?

Status
Not open for further replies.
Quote from javs5150:

Does not the "CCI" reflect the movement of price closely also without the range bound?
More...

Look at the indicator line of the chart I have posted. Now, post me a CCI that is as smooth and free flowing over the same time period. The CCI is ok, but way too noisy for my liking.
 
Quote from kiwi_trader:

As a time bar user I will disagree with proflogic about their utility. Something for everyone in trading.
More...

Kiwi, still waiting for an explanation. I know everyone is different, I'm the poster child of different but please explain how eliminating the variable nature of the price bar is a bad thing.
 
I'll have a go at both of the last two PL.

1) On the cci, it really is one of the noisiest indicators because the closing price is part of its equation ((close-sma)/normalizing factor). But, if you find the right time/tick/vol frame its divergences can be useful and because its price based they show up much faster than a smoothed indicator (stoch, macd, ergodic). The normalizing factor is a key part of the divergence but not responsible for its speed of display (I have rewritten cci with different normalizing factors and despite the indicator's originator having a different use intended for it I find his original factor to be best).

2) I didn't say it was a bad thing ... just one of a choice of things. I use time based bars because I have found that the bar break is meaningful to a lot of other traders ... so watching it and responding to it is a key part of my trading. I also use a much faster tick chart (vol just isn't so good in hsi) to count pulses within the swing I see on the minute chart.

So, its not a bad thing - its just not the only thing :)
 
Quote from kiwi_trader:

I'll have a go at both of the last two PL.

1) On the cci, it really is one of the noisiest indicators because the closing price is part of its equation ((close-sma)/normalizing factor). But, if you find the right time/tick/vol frame its divergences can be useful and because its price based they show up much faster than a smoothed indicator (stoch, macd, ergodic). The normalizing factor is a key part of the divergence but not responsible for its speed of display (I have rewritten cci with different normalizing factors and despite the indicator's originator having a different use intended for it I find his original factor to be best).

2) I didn't say it was a bad thing ... just one of a choice of things. I use time based bars because I have found that the bar break is meaningful to a lot of other traders ... so watching it and responding to it is a key part of my trading. I also use a much faster tick chart (vol just isn't so good in hsi) to count pulses within the swing I see on the minute chart.

So, its not a bad thing - its just not the only thing :)
More...

1) Nice explanation, thank you. I've rewritten the ergodic as well so I can understand the specifics of indicator use. I use divergences and convergences a lot as well but treat them a wee bit different. I treat them as warning signals, some stronger than others and not as definitive trading signals because they aren't consistent enough for me.

2) I couldn't agree more. I look at trading methods as different types of music. We all have different tastes and those tastes even very at different times of the year or in different markets. I like to think of Volume Bar Charts as the Easy Listening Music of Trading . . . :cool:
 
Quote from ProfLogic:

Learning something new takes practice. You won't learn anything well with screen time to solidify what you are seeing.

I'm posting a chart for the YM with, what I see, as the only 3 clearly simple trades for today. One short from about 12145 with the exit around 12110. This trade was in the continuation of the countertrend move down from Primary Rresistance of 12385. This should have been good for 30 points or so. The next trade is long on the confirming oscillation at 12116 with an Early Entry Exit about 12130. Quick trade but should have netted you about 5 to 8 points. The last was from a Minor Confirmation of the Prime Confirming Bottom putting you long again about 12135. You would have stayed with this trade until we had an oscillation failure at about 3:48 pm EST at about 12165 for a net of about another 30 points. All together about 65 points for the day or about $650 per contract; one countertrend trade & 2 trend trades.

Now I know there were a lot of other swings in the market today but MY feeling is that I would rather be consistently profitable each and every day then chase the market and make a bunch one day and give it all back the next. I have people make fun for that philosophy but I would rather make less trades and more money any day. To each their own though.

The chart I posted ia split into two sections. The top is price in Volume Bars (343 Volume Bar Chart). The price & HH/LL labels on the oscillations are computer generated in real time. The lines connecting them just shows you visually the movement of price between each Support & Resistance point. These too are computer generated in real time. The arrows and labels I put in manually to show you the entry and exit points. Now remember, this is the TREND CHART. The specific entry and exits come off the next fastest chart and in this case it would be the 49 Volume Bar Chart. It is just easier to show it all to you on one chart.

The lower section is the Ergodic. The red and blue line is the Up & Down Momentum of this particular indicator. I like to think of the Ergodic as showing me the overall strength or weakness of the market. The histogram is sea green and is the slope of the Ergodic. I like to think of the histogram as showing me the immediate direction of price. The price & HH/LL labels here as well are computer generated in real time as is the trend lines on the ERG. The convergence labels are mine for the purpose of clarifying the entries again.

The process is really simple but takes screen time to get yourself confident with reading the oscillations. The more bad habits you have the longer it will take you to just trust what you see. I tell traders not to believe anything that anyone tells you unless you can verify it for yourself by seeing "it" (whatever it is you are looking at) take place 100 times without fail. To be honest with you though most traders do not possess the patience to learn to trade this way because they want immediate gratification.
More...

Greetings ProfLogic,

Thank you again for your time.I hope to be able to do the same for you or another if I ever develop a profitable discipline.

You hit the nail on the head as far as making fewer trades,patience is essential in this game.It is likely my biggest obstacle.

Like I mentioned before,I want to be able to net 10 - 15 pts a day consistently.I see this mindset is flawed.Concentrate on the skill,and maybe more than my target will be met?

Thanks again,
cordially Tom
 
Quote from kiwi_trader:
The normalizing factor is a key part of the divergence but not responsible for its speed of display (I have rewritten cci with different normalizing factors and despite the indicator's originator having a different use intended for it I find his original factor to be best).
More...

Good point Kiwi. I have attached a part of the original Commodities magazine October 1980 CCI article that talks about comparison studies of various cycle lengths on the CCI. I too agree that the CCI's ability to pick up divergence (and associated divergent type oscillator patterns) is excellent, so long as the period setting and tick chart parameters are optimised for the particular instrument.

In my discussions with Mr Donald Lambert (CCI developer), he has told me he would rather be remembered for his work on ESMA (exponentially smoothed averages) as oppossed to (in his exact words) "all that CCI nonsense". I honestly thought he was joking around, but then he showed me that he uses a very basic Williams R (he calls it Lamda and was not even aware that it was similar to Williams R until an associate pointed it out) for his own long term investment making decisions.
 

Attachments

I have brought up an ergodic window with two indicators of nested lengths and it is not bad ... not bad at all.

I trade the es with s&r plus channels and a mix of ask/bid volume.

Put quite simply, I wait for an s&r point and then watch the the strength of the players hitting the bid or ask.

remember that there is a stockpile of stops both at and straddling the s&r point and these must be consumed first.

The nested ergodic does make a useful contribution to this method as it is confirming the strength of price action only.

I might also add that I also, avoid taking a loss.
As I work to a daily net points target per lot, every loss then needs to be recovered and my allotted time is a max of 120 mins. Usually I am done inside 90 minutes.

The key to this game is size and that only comes with confidence which in turn arises out of nice smooth trading.
The comms on size trading are a small proportion of one point and so I have no hesitation in pulling the plug if I dont like the trade.

I have a note to myself on my monitor.
"To miss a trade is acceptable.
To take a loss is unforgivable"
It is not as simple as this obviously, but it does keep me in check.
 
Status
Not open for further replies.
Back
Top