Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Anyone find any edge with activity based charts over time based charts?
My main chart for day trading (ES) is the 1-minute chart. I find that most of the time this chart gives a good summary of the price action without too much noise. At times of heightened volatility as seen recently, it can be too blunt. A solution during these periods of time may simply be to use a second chart instead, i.e., 30-second or less.
As I'm working on my charting methodology again, I want to once again explore other options. I know many people seem to prefer volume charts or tick charts over time based charts. Some utilize a combination.
In the past I've done in depth studies of volume, tick and range, but I have yet found a huge advantage over time based charts. IMO, quite often they visually look the same. The exception is during times of huge volatility, but as mentioned, this can be solved by simply using a sub-minute time frame instead.
Any comments?
Which charts do you use for day trading?
PS: I seem to recall that volume/tick charts would form some nice 'bases' on swing highs and lows the last time I trialed them, but this pattern seems to be gone now.
I'm actually confused, how does a 30 second chart offer more clarity during increased volatility than a higher time frame chart which would be according to your charts, the 1 minute chart. When your 1 minute gets choppy and blunt, look to a higher time frame chart, for your system it could be 5 min. Someone trading 15 min chart may look at an hourly chart as their higher time frame chart.
However, you will find much more chop and noise on a 30 second or less if you use that as your HTF chart.
I use tick charts, not for any complex special reason. But because I'm used to it and i often interchange with bar charts of 2 mins and my HTF chart ranges about 5/10 minute. Price will still be displayed the same across all charts, if it moves down 5 points, however you like to see it, it will still be seen as a move down by 5 points.
Edit: Assuming we are looking at it, as it forms and not comparing 5 min bar to 1/4/24 hrs bar. one bar can represent the entire day or thousands of bars can represent an entire day. but my point is across all different charts when it does drop by 5 points. everyone sees the drop regardless of what type of chart they are using.
Some people like a 10,000 volume. Others have theirs for specific reasons, I just chose something that I like the pace of. It's not too fast and not too slow like 15 minute bar chart.
Id say your both right, a'lot can happen in 1 minute but most likely unless its a "black swan " event we arent going to go anywhere significant .. kinda like running on a tread mill i can turn it all the way up to 10 and it looks like I'm doing a lot but really i haven't moved an inch.
It really depends on how you use charts and what you're looking for. What if I'm a scalper?
Incidentally, I'm not, but I want low risk entries and good execution without using very wide stops. For me, the 5-minute chart is not sufficient for that purpose.
Even if you rely on higher timeframes for signals, you'd still want to drill down to a finer level if you want the best possible execution. Other people might be comfortable taking on more heat, being early, but that's not my preference.
Getting back on topic, it would be interesting to hear if people have found any particular advantages with activity based charts over time based charts...
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!
Ian
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.
Since you mentioned tick charts specifically. Do you have an opinion on volume charts also?
I know many people love volume charts, but to me, I feel that tick charts make more sense.
Curiously, I find that they usually don't look that different anyway. Usually, both tick/volume/minute look fairly similar on any given day. Unless you use really fine settings.
