I have to agree with Fat Tails, this would require a "new bar type." Your sketches seem like they ought to work but if you give the theory a little more thought flaws soon arise.
1. An outlined candle with wicks........ I'll assume the ends of the wicks would indicate the high/low of the time period. What if, the high and low range is only 5 ticks, your asking to put a lot of visual data in a relatively small space.
2. Inside the candle it will be changing color with red or blue depending on the current net fo the volume
for that bar at that time. Almost like a bucket being filled up with water but only it would be volume...... Same issue, what about the open/close the body of the candle, do you except this to indicate the price movement, if so what happens to the "bucket" on a doji bar? I'm just asking.
3. Inside or below the bar it would give a small running net amount at that time. Plus for buys and minus for
sells. I guess one would have to figure out on the volume which is the ask trades and which are the bid
trades........ No problem here, other than the font size, the more you squeeze the bars together the more unreadable the numbers become, but there's hope.
4. When the bar closes it would then show the final out come. The bar would be filled blue for plus net volume
or red for negative net volume. On the bottom of the bar or inside it would show the amount by which it
was net........ Again the doji issue, the "bucket" is in the way of all the price action while the bar is building. As prices move up and down within the range of the bar, and when the bar is finished you never know if you're going to have a candle body or not.
Whether this type of visual display of bid/ask volume would enhanced anyone's trading is anyone's guess. But for those who like to tinker it my prove to be a worthy adventure, I'm not that guy but the topic caught my interest. I do have a few thoughts. 1) build a box around the bars and "fill" it with the b/a volume data (see chart) it would "fill" behind the bar and if the bar was tall enough it may show you what you're looking for. 2) Make some weird volume bar, like a histogram bar and anchor it to the low of a 5m bar and chart the volume/ratio data above or below it. There are may ways to view b/a data readily available in most charting platforms. There are almost as many formulas for ascertaining the bid/ask ratio (buy/sell "pressure"), some folks go as far as theorizing whether the other side of their fill was a market order or limit order. I'm attaching a chart with bid/ask ratio labeled above and below the bars, two bid/ask volume studies and a standard volume histogram. I hope you find what works for you .
Equivolume-can u duplicate script with real volume?
I like the layout of the bid/ask chart, but you have the same info if you read your candlesticks. What I think would be tons better, is add real volume number in the place of your bid/ask numbers. Add it realtime so as volume goes in the volume number will go up and down with price action and when it closes show total volume. My thoughts are as shown in example pic of another type of volume candle chart(I dislike because I want to have it with a regular candlestick with wicks), if real volume was displayed as you saw trend forming ie. double top as trend moved closer to the top if you see a decrease in volume as price action continues you would short towards top, rather than take a bad trade...Thoughts???
FYI I have a book explaining equivolume candlesticks, over and over it shows pics as I listed in different trading scenarios where volume comes in and trend changes.. I cant use there candles because I read regular candles and I always back up my read of candle with other info, which I cant with there equivolume candles. Also I have never tried to use Equivolume charting realtime so I dont know how the forming the candles are, lag time etc....
Wanted to clarify- regular candlestick that has a volume number realtime hooked to it that shows total volume going into as candle along with price action. How this is different from bid/ask a candle could show 12k volume,1k or 112k volume which is a (huge difference) meaning "watch out" Thoughts. Big thx in advance
Last edited by Rad4633; October 9th, 2011 at 10:57 AM.
Reason: better clarification