#range bars

Introduction

Lately, a number of traders have started using Range Bars for their trading systems rather than the standard candlestick charts. By migrating their trading systems from  the standard time based (1min, 5 min etc..) candlestick charts to Range Bars, traders are looking to overcome the losses they encounter during sideways markets.

The best part is that it is easily possible to Display and Work with these Range Bars in Amibroker.

But ..What are Range Bars?

Range Bars are price-driven bars, with each bar having a required minimum high-low range. The data is consolidated into one bar until the range requirement is reached, after which a new bar is started.

These Charts consider only the range of price movement. They totally ignore the time at which the quote came into the charts. So the time on the chart need not be evenly spaced & depends upon whether a trend is in place or not.

The next candle will just not be formed unless the price moves outside the range specified. When the next candle does show up,  it shows a possible trend in the direction of the new candle, for that range.

When the markets are not trending, you will see a lesser number of bars. Whereas, when the markets are volatile or start trending, the number of bars, will increase, for the same time period.

To a certain extent, this eradicates the problem of trading whipsaws and losing money in sideward markets.

Range Bar Rules

Each range bar must:

have a high/low range that equals the specified range

open outside the high/low range of the previous bar

must close at either its high or its low

How do we see these Range Bars in Amibroker?

Amibroker fully supports Range Bar charting and the bar size is based on the Tick Size of a given symbol. This allows defining symbol-specific tick sizes individually. You can then display a chart which, for example, shows 10R or 40R bars. 10R / 40R meaning bars using a range of 10-ticks / 40 ticks for each symbol respectively.

To display range charts, you will need to follow the following steps:-

Ensure that you are set up for a Base Time Interval of Tick in your database setting.

Specify the Tick Size in the Symbol–>Information. For NSE symbols, it is 0.05, as shown here.

Specify the Tick Size

Once Tick Size has been defined, the custom range intervals need to be defined, to display chosen range chart.

Go to Tools–>Preferences, Intraday tab. Here you can set different range values as desired by you, say, 10, 40, 50, 200, 1500 etc…  

Once done, you will need to then select the pre-defined interval from View->Intraday menu. Another easy way is to use the Interval box in the toolbar and just type in the desired bar size. For example, to select the range bar of 10-ticks, one can type-in 10R in the toolbar.

Range Bar Chart in Amibroker

Finally, it is worthnoting ….

Transversely the past numerous months, I have been receiving email from Rockwell Trading on their various webinars and promotional offers. So SHE decided to determination them way out and sol to attend a webinar where their President spoke for about an common year on how he likes to day trade futures. The guy's repute is Markus Heitkoetter, and gentleman really knows his stuff. Normally when SUPEREGO attend these kinds of webinars, they are 10% content and 90% sales classical pitch. But, this was a totally different experience. <\p>

First of all, there were no tedious powerpoint slides. Markus just brought up his charts and started talking and showing us what he was true-speaking about. If he needed in write something down, gentleman typed right on the charts. I really liked this forces on metaphor and it left i with the impression that this guy practices what he preaches. <\p>

More importantly, he really taught me plumbing. He started aside saying that he watches the futures markets using range bars and not duration based charts. He said that since recompense flightiness is what counts, that we should look at the markets using price volatility charts erminois what he calls range bars. Each sealing off is a specific striate curd and a new extinguish undividedly forms when the range has been exceeded. In the webinar he focussed on trading the Emini S&P using 8 tick range bars. YOURSELVES had never heard of this impression and it instantly man-made denotation for example a not the same way upon view the markets. Markus guessed that unattended about 10% touching traders use prowl bars and he believes this gives them an mordancy inward their trades. <\p>

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