Anyone find any edge with activity based charts over time based charts? | Traders Hideout - futures trading strategies, market news, trading charts and platforms

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Anyone find any edge with activity based charts over time based charts?

  #9 (permalink)

charlotte nc
Trading Experience: Master
Platform: ninjatrader
Broker/Data: NinjaTrader
Favorite Futures: Emini (ES, YM, NQ, ect.)
Posts: 379 since Jan 2015
Thanks: 69 given, 918 received

There are a few neat things you can do with tick charts that you can't do with time based charts.

You can develop an easy view of the average trade size. (In a 100 Tick bar) If you have a total volume of 1000, then you know that the average trade size in 10. You can back into this type of calculation with any size tick bar, but this will give you clues about what type of traders are in the market. Some people create trading rules around following the larger players, though I won't comment on how well this works.

If you have a really granular setting like 1 tick for example, and you run this to only update on price level changes then you can capture every price level change the market makes. Some platforms allow this, but others might not. But seeing every single price level is neat and can lead to a few edges. I won't speak to how well they work, but there are a lot of schools of thought on if a price level gets penetrated or not on the first or second pass then x,y,z will occur. At the time time if a price level gets penetrated every time, then when the market moves to this price level again... A,B,C will occur. This level of granularity may not be for most chart traders, but scalpers love this stuff, and there are some chart trading scalpers out there, just not a lot.

If you are trying to perfectly time your entry to get on the right side of the noise and capture a tick or 2, then analyzing the action at the price levels can get you on the right side of the noise often times. If you are looking too far out though (1 minute to 5 minute data) you may miss a key price level change that can throw your entry off by 1 tick.

While I will concede that it is very challenging to work with granular data as a chart trader, there are some possible benefits to it if you are fast enough. This is what playing video games as kids for 20 years prepped you for right?

Best of luck!


In the analytical world there is no such thing as art, there is only the science you know and the science you don't know. Characterizing the science you don't know as "art" is a fools game.
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