Range Bars Charts Exposed-The Timing Solution in Trading

[Tiberiu]

The Question to be made is: "What does a Trader need, to be Successful?". It looks like a complex Question, right from the start. Your thoughts fly away to Trading Plans, Strategies, Systems, Methods, but You have to keep into attention the >>> Timing Factor <<<.

 

The Entry and the Exit (Stop Loss or Take Profit) of the Trade, are the Components that make it Succesful or not.

 

Of course that you need a complete Analysis, both Fundamental, and Technical to get the Best Entry and Exit for the trade. You might have a great analysis, very accurate, very precise, regarding the Direction of the Market Price, but if you enter too early You might trigger our Stop Loss before the Trade goes the way You have Predicted. On the other hand if You enter too Late, you might lose the Market Move and wake up in the Middle of a high risk trade.

 

The >>>TIMING<<< issue involves a Time Factor - the best Moment to Enter/Exit the Market.

 

 

How can You find the Best Moment in a Time Based Chart?... You have to take "another View of the Market", one that is beyond the Time Factor.

 

So, We have a Timing Problem, and the Best Solution can be found by Detaching Yourself from the Time Factor.

 

 

The next step to take is to concentrate on the >>>Price Movement<<<, on the Volatility of the Market, beyond the Time by using the Range Bars/Candles Charts.

 

 

>> It is amazing how You can use Trading Instruments from the time Based charts, in the Constant Range Bars/Candles Charts analysis, and combine them with specific Tools from the Price Movement Charts (R.B.C. - Range Bars Charts).

 

>> For example, You can use Pivots (Daily, Weekly and Monthly - Time Based) combined with Moving Averages from the Range Bars Charts, other than those from the related Time Based Charts, and also Trendlines and Channels based only on Price Movement.

 

>> However, the real Help comes from the Volumes indicator, and the Volume Spread Analysis conducted in the range Bars Charts, because We have a different number of Bars/Candles, and the Volume is distributed different from the time Based Charts.

 

>> Another Important Difference, the Bars/Candle Formations, show Different Signals, sometimes earlier then the Time Based Chart, correlated with Volume and the Technical and Fundamental Analysis in both types of Charts.

 

 

>> >>>IMPORTANT<<< Volume doesn't Always follow the Fundamental Anaysis and News. They are sometimes higher during the OPEN/CLOSE of the Asian (Tokyo), London or New York.

 

 

>>>SOLUTION - Use the Time Factors, Fundamentals and Market Opening and Closing to Spot the Best Entry and Exit Signals by using the Constant Range Bars Charts (Price Movement and Volatility Charts), with the Specific Tools: Volumes, Volume Spread Analysis, combines with Candle/Bars Formations and Technical Analysis. Just Follow the "Smart Money" (Professional Traders) Real Movement.

 

To Your Success,

Doctortyby - Tiberiu

[Tiberiu]

First, let's see an example of the signals provided by the Volumes combined with Candle Formations in both Types of Charts (Time Based and Range Bars Charts - 10 Pips).

 

http://www.dukascopy.com/imageserver/img/809fb72fb0d0bd1be3e801dcc440cf2a/500_2/image516.jpg

 

 

 

In analogy with the Time-Based Chart - 15 Minutes Time Frame:

 

http://www.dukascopy.com/imageserver/img/14cb0af32cd80fd154ddac0f3b9a3661/500_2/image191.jpg

 

To Your Success,

Doctortyby, Tiberiu

[Tiberiu]

Next You can see two examples of How you can combine different instruments in Constant Range Bars Charts.

 

Example 1:

 

http://www.dukascopy.com/imageserver/img/5095d1c5fe2d4588a10d06f427cededc/500_2/image392.jpg

 

 

 

Example 2:

 

http://www.dukascopy.com/imageserver/img/dce68830cfa7a37a9a6a2df0a1cb9338/500_2/image261.jpg

 

To Your Success,

Doctortyby

[Tiberiu]

I personally use these Range Bars Charts setups:

 

- 4 and 7 Pips Range Bars for Scalping,(related to 15 minutes Time based charts)

- 15 Pips for intraday trading,(corelated with 1Hour Charts),

- 35 Pips for intraweek Trading,(corelated with 4Hours Charts - exception USD/JPY which is correlated with 15 Pips RBC).

 

I also use Time Based indicators in Range Bars Charts like Pivots (Daily, Weekly and Monthly - Main Pivot, 3 Supports, and 3 resistences). It gives me the other view of the Market in analogy with The Time Based Charts.

 

- For each Trading Instrument (Major Pairs, Stocks, bonds, Gold, Crude Oil ...), You can use ATR - Average True Range, which is the Daily volatility of the price in pips. You can choose a percentage (10, 20, 50%) of the Daily range for a Constant Range Bar.

 

- Of course that Range Bars' Lenght will also be settled from the Trader's Style point of View (Scalping, Intraday, Swing trading, Positional Trading, Investing)

 

- Appropriate Values in Range Bars Charts for Different Instruments: EUR/USD - 15 pips, Gold - 15 Pips, Crude Oil - 20 Pips, Mini Dow Jones - 25 pips, E-mini - S&P 500 - 12 Pips.

 

To Your Success,

 

Doctortyby

Editat Februarie 12, 2012 de Tiberiu

[Tiberiu]

The >> Key-Levels << that I watch in My Technical Analysis are strictly correlated with the Trading tools and Instruments that I use.

 

What I haven't posted until now is the fact that I use >>2 Time-Frames (4 Hours and 1 Hour, or Daily and 4 Hours) and 2 Constant Range Bars charts setups (35 Pips and 15 Pips)<< to enter the Market.

 

The Bigger Time Frame or Range Bars Charts Setup is called the SETUP Chart.

The Entry/Timing, smaller time-frame or Range Bars Charts setup is called the TRIGGER Chart.

 

Key-Levels for the Setup Charts:

 

- Pivot Points (Daily, Weekly and Monthly - Main Pivots, 3 Supports and 3 Resistences),

- Fibonacci Retracements (during a Trend),

- Simple Moving Averages (30,50,100 and 200 SMA - also effective during an Uptrend or a Downtrend),

- Trendlines and Channel Trendlines (During trends and Congestion areas),

- Support and Resistences

 

Key-Levels for the Trigger Charts, besides the ones from the Setup Chart:

 

- Different SMA's (the same setups 30,50,100 and 200SMA) - signal confirmation,

- 5 and 13 EMA cross - signal confirmation,

- RSI - Trendline Break-out, False Break-out - entry/exit confirmation,

- ABCD or 123 Patterns - entry/exit confirmation,

- sometimes MACD (convergence, divergence, trendline break-outs) - confirmation.

 

I correlate the Instruments Above with Volumes Analysis and Candlestick/Bars Formations.

To enter the Market the Trend on the Setup Chart has to be Correlated with the Trend on the Trigger Chart (correlation of the Signals).

 

>>IMPORTANT<< : I use Different instruments according to the Market Conditions. I use some of the Instruments - all the Time, Some of the Tools for some of the Time, All of the Instruments for a period of time, Sometimes No Key-Level if I trade "Naked" (Based only on price action and Volumes), but I think to Cannot Trade all the time without using these Tools .(after a Quote from Abraham Lincoln).

 

>>So, Key-Levels are Market Points that give the Price/Time Movement a certain order for the traders to see the Levels where there could be important changes in the Price Action.<<

[Tiberiu]

Key-Levels Clasification and Live Example from EUR/USD

I classify my Key-Levels in my Analysis based on their Importance and Impact on the Traders' Psychology:

 

a) Simple Key-Levels, (I use them only for information purpose )for example:

 

Weekly Main Pivot, Monthly S1 Pivot, a certain Support level, the 200 SMA, the Downtrend Line in an Downtrend, a Fibonacci Retracement.

 

http://www.dukascopy.com/imageserver/img/69fc41c3914cb9f1a33599f846b3f800/500_2/image7.jpg

 

 

b) 1st Level Key-Levels - 2 Simple Key-Levels Confluence:

 

- 2 Pivots Cross, A pivot and a SMA, A pivot and a Trendline, a Pivot and a Support/Resistence, Two Trendlines, 2 Moving Averages Cross (50 and 200SMA "Red Cross", 100 and 200SMA Cross), a Cross between a Pivot and a Fibonacci Retracement, a Cross Between a Fibonacci and a Trendline, a cross between a Fibonacci and a SMA.

I also use these Key-Levels for an information pupose signal.

 

http://www.dukascopy.com/imageserver/img/78a9af7e08507f8702b0e73107e70c54/500_2/image972.jpg

 

 

c) 2nd Level Key-Levels - 3 Simple Key-Levels Confluence:

 

- a Pivot , a Fibonacci and a SMA, 2 Pivots and a Fibonacci, 3 Pivots, 3 Moving averages Cross, a Downtrend Line, an Uptrend Line and a Pivot Confluence.

These Levels are for a Signal Information and have to be sustained by the Trigger Chart Analysis , the Volumes or the candle Formations.Which brings us to the Most Important Key-Levels.

 

SETUP Chart:

 

http://www.dukascopy.com/imageserver/img/f11c4d21748868d708fd311ab76c1bd9/500_2/image432.jpg

 

 

Trigger Chart Confirmation (Volumes and Correlation):

 

http://www.dukascopy.com/imageserver/img/76c2389fd494bb81e5c5d1996a31de9b/500_2/image438.jpg

 

 

d) 3rd Degree Levels, >>CODE RED Key-Levels<<. The Most Important Key-Levels on the Setup Chart are the 2nd Level Key-Levels that are confirmed by the Volumes Analysis / Candlestick/Bar Formations on both charts SETUP and TRIGGER CHARTS.(as shown in the two images above).

 

For Example, right now as I write this Article I see a CODE RED KEY-LEVEL tested on the 4Hours Chart on the EUR/USD at the first our of the New York Trading Session (in the Two images above):

 

>> SETUP CHART (4 Hours Time Based Chart):

 

Confluence between Weekly R1 Pivot / 61,8% Fibonacci Retracement from the Daily Chart and

30SMA, confirmed by the last candle (bearish pin-bar) and Volumes (as shown in the Chart).

 

>> TRIGGER CHART (1 Hour Time Based Chart):

 

Confirmation of the Bearish Signal, more than that 50 and 100SMA cross, False Bullish Break-Out above Daily R1 Pivot Candlestick Fromation and high Volume on the Last Bearish Candle (last Hour).

 

This is a great Bearish Signal to Enter Short on the Market.

Of Course You will enter the Market with the Exit (Stop Loss and Take Profit) already established.

 

And one other Secret... The Entry signal has to be also confirmed by the Range Bars Charts in analogy with the time Based charts. For the Example Above this would mean that You have to look also into the analysis on 35 Pips and 15 Pips Range Bars Charts.

 

To YOur Success,

Doctortyby