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Range Chart - number of ticks for day trading


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Range Chart - number of ticks for day trading

  #1 (permalink)
Toronto, ON
 
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Range Chart - number of ticks for day trading

What is the ideal number of ticks on a Range chart for day trading?

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  #2 (permalink)
Tallinn, Estonia
 
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My recommendation is :

- compress chart to maximum. Max. number of bars
- play with different settings 5 range, 10 range, 15 range and so on

till you see " normal " price action.

There is example how I did it :


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  #3 (permalink)
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eone View Post
What is the ideal number of ticks on a Range chart for day trading?

the ideal number has to be consistent with the level of risk you can afford I think that is the only reasonable answer to your question.

it is the same for range or time bar. If your stop is 10 ticks would you like to trade with bars with an ATR of 20 ticks ? Of course you can do it if you want to blow your account

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  #4 (permalink)
Toronto, ON
 
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Thank you lemons and Okina for your responses.

Much appreciated. I am looking for widely used practices for using Range charts. To draw some parallel, using 11 min or 13 min charts is probably less popular vs. 5 min or 15 min, etc. chart. I have mainly seen 6 and 4 Range chart being used by many on this forum and wanted to understand if that is most ideal or there are others who have been experimenting with different size.

Thank you once again.

EO

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  #5 (permalink)
Tallinn, Estonia
 
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eone View Post
Thank you lemons and Okina for your responses.

Much appreciated. I am looking for widely used practices for using Range charts. To draw some parallel, using 11 min or 13 min charts is probably less popular vs. 5 min or 15 min, etc. chart. I have mainly seen 6 and 4 Range chart being used by many on this forum and wanted to understand if that is most ideal or there are others who have been experimenting with different size.

Thank you once again.

EO

If you want widely used bar types then stick to time based charts.
But most important thing is chart what you are looking at must make sense to YOU.

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  #6 (permalink)
montreal quebec/canada
 
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I quote a book from Shaun Downey that I like : Trading Time

"Trading Time.
A double meaning alluding to actually allocating the time to trade and then understanding
the critical information regarding where you are in time when a trade is placed. This facet
of time has many definitions.
1. The timeframe of the chart that was used and why?
2. How critical is the immediate price action directly after the trade is placed?
3. How long is the trade expected to last?
4. At what point in time is the trade within the trend or are we at the end of the
trend?
5. How strong is the trend based on the time it has existed?
6. What is the risk/reward in relationship to time?
These are all important questions but in my experience of visiting thousands of traders
over the years, they are questions that are rarely asked and for a large number they are
never even considered. One of the first questions I ever ask a trader when we first meet
is, what timeframe charts do you use? The answer is always a variation on the same
theme. “Oh I use a 30 min, 60 min daily and weekly”. Not one person has ever said. “I
use the timeframe chart that is relative to my concepts of risk, volatility and range
For the great trader their success with this somewhat random method is proof enough of
their inherent ability. For the not so great trader this is a recipe for disaster "

R.I.P. Olivier Terrier (aka "Okina"), 1969-2016.
Please visit this thread for more information.
Visit my futures io Trade Journal Reply With Quote
 
  #7 (permalink)
Detroit, MI
 
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eone View Post
What is the ideal number of ticks on a Range chart for day trading?

There is no "ideal" number for daytrading.

Things to consider

1) How many trades do you want in a day....smaller range bar = more trades

2) How large of stops can you handle

3) How volatile are the current market conditions.

I have been trading range bars for many years and I adjust them based on volatility. When trading the NQ for example my current size is 6 ticks. I have gone as high as 10 ticks and as small as 4 ticks. When volatility increases I also increase the size of the the range bar. You must find the right sweet spot in size for the method you trade and the volatility of the current market conditions.

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  #8 (permalink)
Toronto, ON
 
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Babool View Post
There is no "ideal" number for daytrading.

Things to consider

1) How many trades do you want in a day....smaller range bar = more trades

2) How large of stops can you handle

3) How volatile are the current market conditions.

I have been trading range bars for many years and I adjust them based on volatility. When trading the NQ for example my current size is 6 ticks. I have gone as high as 10 ticks and as small as 4 ticks. When volatility increases I also increase the size of the the range bar. You must find the right sweet spot in size for the method you trade and the volatility of the current market conditions.

Thank you Babool,
Much thank you.

May I ask how you measure volatility?

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  #9 (permalink)
montreal quebec/canada
 
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volatility :

The generalized volatility for time horizon T in years (day, minute, second, etc...) is expressed as:

volatility = σ*T^0.5

where σ is the standard deviation.

All those mathematical function are available in any charting software that I know.

Some people in the ''old'' time when computers were very slow used ATR as a proxy for volatility. But if you trade RB of course you can't use ATR (because unless you have a gap the ATR of a range bar is equal to the range bar setting in number of ticks).

For a more practical point of you you can use the standard deviation (and forget the square root of time).

R.I.P. Olivier Terrier (aka "Okina"), 1969-2016.
Please visit this thread for more information.
Visit my futures io Trade Journal Reply With Quote
 
  #10 (permalink)
Toronto, ON
 
Experience: Beginner
Platform: NinjaTrader
 
Posts: 103 since Sep 2009
Thanks: 27 given, 21 received



Okina View Post
volatility :

The generalized volatility for time horizon T in years (day, minute, second, etc...) is expressed as:

volatility = σ*T^0.5

where σ is the standard deviation.

All those mathematical function are available in any charting software that I know.

Some people in the ''old'' time when computers were very slow used ATR as a proxy for volatility. But if you trade RB of course you can't use ATR (because unless you have a gap the ATR of a range bar is equal to the range bar setting in number of ticks).

For a more practical point of you you can use the standard deviation (and forget the square root of time).

Thank you Okina
What indicator would you suggest using?

EO

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