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For many traders who are using time charts, myself included, the gap between the close of yesterday and the open of the current day is sufficient information. For this reason, I don't care to see what happened overnight, as the price action of the regular trading hours is what's important to me. Therefore, my charts only show the regular trading hours. I am using a 5 minute chart, so people who are using non-time based charts such as tick or volume charts obviously have different requirements.
Well, you're right, of course, about the regular trading hours being the most important. The way I see it, if you look at a volume or tick chart, the view you get of the market is not too different from a regular-hours only time chart, except that the overnight hours are present but squeezed down to their relative significance. You can see quite easily where the gap in RTH is, and there may be an advantage to being able to see it developing before it has happened. Gaps are important, and this gives you a heads-up. During the day, it's easy to see whether the gap is filled or not -- you still know where it is (I have a little thing that marks the RTH open, so it's very visible), so you haven't lost anything, and may have gained something.
I think this is actually very similar to a RTH-only time chart in this way, and very unlike a time chart that includes the overnight hours, which is part of why I like the volume/tick chart. The overnight highs and lows are also sometimes significant, because some traders do watch them and they can affect regular-hours trading.
As always, there are many ways to do this trading thing.
The important thing to remember is to keep your trading theme consistent across the ETH/RTH session lines. Some people believe in the auction theory volume rules, others see time price action rules. Chart interpretation is largely about wave form and signal analysis regardless of which theme camp you are embracing. What you don't want to do is switch between themes, or select a waveform that is inconsistent with your trade frame. The frame of a scalper is quick, a swinger is patient, an investor is glacial. There is a number of bars that will pass before the trader decides if things are working or not. That number is the traders sample period and must show the signals within frame he uses. The waveform must show the signals. The trader must select a bar type that is representative of the theme he is trading, and a bar size that will show his signals within his frame. For instance, it makes no sense for a short term "time" action trader to obliterate the ETH action with large volume bars, because he is mixing themes (volume with price action, and transactions with time). That trader is mixed up, and will not be able to trade consistently.
Opening gap trading has its merits, as do volume bars, time bars, tick bars, candlesticks, box bars, renko bars, the list is endless as are support/resistance, channel/trend lines, internals etc, etc.... They are all used to define price action. No one can can say one is superior to another. They are simply different trading methods. The trader must stay true to his method.
For the reader's curiosity, I use 5 and 15 minute charts, and interpret price action across the ETH/RTH line.
I like to use the RTH chart with a 30 min. interval to see where areas of supply/demand are located. Sometimes it offers an easier view and less clouded than the whole ETH chart and it helps to form my expectation for the day. I like to go long at a previous VPOC or VAL/VAH and put my TP at a supply/demand area or just fade these areas like today at the open. The boulder in front of us was too obvious to miss (see chart...).
