Yesterday re-tooled my RangeBarHighLow indicator to work properly with Renkos since I visited the MedianRenko thread and decided to take another look at them. I like Japanese things usually - although for some reason I still prefer OHLC to candles. Maybe I should try those hollow candles but I don't think I have them or have seen a download for them anywhere.

In any case, the RBHL works great with Renkos. The main reason I didn't ever look at them was not knowing where the highs/lows were going to be, but now that is fixed. Even the default Renkos are quite workable with this plotting feature. (attached uses Median Renkos). Next I would like to get it to work with PF but that will be harder.

Then I coded 'Ash rat' inspired by the TRO Rat thread which was closed but which contains some interesting information along with far too much fluff. Frankly, I got more from his attitude and use of statistics than any sense of clear method, though if I understand aright he basically uses average daily ranges to calculate when a possible low or high is in (and he only buys lows I think), and then after a bounce of X% of that daily range from the probable Daily Low, he buys any time there is a pullback and then a higher high, i.e. he buys up bars. Something like that. It makes a lot of sense and jives with several things I have been mulling over of late, principally sticking with one direction and not changing sides too often. If the longer term trend is up (or whatever criteria you use, say it's under Band 2 in a Fib Band type indicator), you buy and all you do is buy.

But in working with the Renkos and these ideas last night and developing the AshRat indicator which knows what the high or close of a Renko is going to be, it occurred to me that Range Bars, and especially Renkos, are like bars that visually display an ATM strategy, so working with them to train with MM I think could be extremely helpful. In fact, along with generally goofing off the next few days and hanging out with friends and drinking too much homebrew (I live in rural area remember!) I would like to build the current 'AshRat' into a money-management training indicator working on Range or Renkos during market replay or live Sim. I tried to do this with RatioSysBand indicator (in another thread somewhere) but the coding went above my paygrade.

In any case, here are two pictures. One shows at TRO (rat) indicator that basically buys HH bars once a low has been put in using something that is close to a 5 bar Donchian approach, or sells a LL once a high is in. It's not based on the Daily Range approach, just swing after swing.

I made the mistake of loading this with Renkos, which it cannot see well, and also did not realise that the 'rules' assumed by the indicator are to buy the buy trigger only when the close is above it, not as soon as it is hit. I think this is not the method, but it is how the indicator thinks, so working with Renkos in a rather fast - and unusually choppy - gold market this morning with a new indicator that I didn't understand was difficult. After an hour or so I was down $700. Then I switched to a Range Bar chart and understood its logic better and managed to get nearly all of it back, and then starting going under again as I was getting very tired. It's a fast-moving approach with 5-range bars - at least it was today.

At the same time, I was using my own indicator on a parallel 5 range chart (also attached) so that was a bit confusing. But I knew that would happen and after two hours am thoroughly familiar with both approaches and can work on them further in a more responsible fashion.

There was something very relaxing and simple about having such incredibly simple rules. No volume. No SR. Just simple price bars, the indicators just showing basic information about the bars.

Comparing Renkos and Range bars, clearly Renkos hold a trend longer. However, they can get very badly chopped. This is perhaps choosing bars that are too narrow for the market. But I personally need to work with about $100 stops for money management reasons. I think an account should be able to trade 1% risk per $10,000 = $100.00. So a 5-bar Renko has an 11tick $115.00 stop already, and a 5 range bar has a 7 tick $75.00 stop so that is what I prefer to research, at least for now. Using much larger ranges to determine trend makes perfect sense, but not for this sort of entry and exit money management training.

Because you know the range of the bars, you know your stop before the trade is entered and have a PT as well based on whatever RR ratio you want and then get a sense of what works and what doesn't. Today I ended up with a 7 tick stop (the range bar plus one tick above and below), a 7 tick PT on #1 and a 15 tick PT on #2 which was only hit once I think. But it was a very choppy time I tried this out in.

(I intended to go over to my 'real' charts and have a proper session for the journal but a) I was tired from the intense Renko and Range workout on 2 charts at once and b) the markets are just floor traders picking up money from saps so they can go out and buy emeralds for their girlfriends before bringing home a larger turkey to the wife and kids. At least that's what it looked like half an hour ago. Maybe it's hit 1200 in Gold whilst I am typing!

I know my posts tend to be too long. (The English schoolboy in me!) Sorry. (there I go again!)

But when I have done more work on the indicator, I shall share it and also show some pictures with signals.

I can't imagine trading a Range chart without the RBHL indicator, and it is VERY helpful with Renkos. Works with Range, Alt-Range, Renkos, SbS Renkos, Median Renkos. Very handy. 2.5 k!

Pictures: the one with the TRO indicator: the idea is buy when it crosses the High with the cream-colored hash, and sell when it crosses the low with the purple hash. Sell are drawn only after a buy signal has been triggered and confirmed with a close above them and also some sort of support-resistance criteria has been met in that there is new resistance. Once there is new resistance, the sell hash is active and any time there is a LL you sell. This is better in theory than practice because the hash marks don't change without close confirmation and in fact the method is to buy the HH's at the high and sell the LL's at the low as soon as you know which way you are going. But anyway. There is some merit to this approach and I intend to take a closer look at it over the next week or so especially in regards to developing a money-management training indicator for use with Range and Renko bars in particular. I think quite a few people will find it of interest.

The Ash Rat picture has a simpler indicator though in this choppy market it doesn't look appealing. When there are trends it is nice. Basically there are always two plots based on where the high or low will be. As soon as a close has formed and it's an up bar, the buy plot goes one tick above the high and the sell/stop plot goes to one tick below where the max low will be. Now with Renkos this works fine, but with range bars it doesn't keep track of the possible highs and lows intrabar like the RBHL indy does, but since I have it running, no problem. In any case, it is VERY simple when the chart is not all squashed up to show on the thread, and makes for very straightforward no-brainer type entries and exits. The art is choosing when to be on the buy side for a while and when to be on the sell side versus taking every single little swing every time which simply won't work. But as a training indicator it is simple, good, effective.

Cory: am I right that your Rolling Pivots is creating a Rolling Vwap re-calculating every hour? I have a hard time reading others codes and also am a bit pressed right now making it even harder to drill down and try to understand what you have done.

it doesn't re-calculate Vmap, it takes a snap shot of a regular Vmap every 60m or 30m and use that value to plot the line for the rest of the period.

Steve2222:

1. Embarrassing to read that ridiculously long post. But as have said elsewhere, despite being middle-aged am still an English schoolboy at heart when I hit the keyboard. Nothing to be done about it!
2. Re your query: "Is it possible to add this to the RHS of the forming bar next to the 'dash' formed marking the possible hi/lo. I would find it more useful to quickly see the quoted price and not just the 'dash'."

Can't be done because these were formulated as text indicators for reasons to do with Ninja scripting (getting them to go off the chart as the bars change). So even though that option exists, it doesn't do anything. Now if you can find a way to plot it and have the previous plot disappear (I don't think you can!) then you can have the price value show in the axis.

I am not using Range Bars any more (at least right now) but I agree with you: it's invaluable! The default one that prints out 'range remaining: 3 ticks' is okay, but I much prefer seeing the actual price level visually both above and below the current High/Low of the forming bars.

There are a couple of other versions out, including one here at futures.io (formerly BMT), and maybe they can display the price in the axis the way you want.