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Laissez Faire
Registered: Sep 2010
Posts: 4153 |
10-17-12 12:47 PM
For most of my studies of price action, I`ve been using time-based charts, primarily the 5-minute and 1-minute for the ES contract, which is the contract I`ve been paying most attention to. I love it.
However, many traders I talked to insisted that price-driven charts were superior for day trading and that I should do some research on them.
So, for the crude oil market, I undertook an extensive study of tick charts, range charts, volume charts and renko bars, trying a multitude of different settings for each chart. Personally, I was disappointed. I could not find any edge over minute based charts.
At times of heightened volatility when bars become large, a tick chart will let you see inside the bars and possibly offer clues about an early reversal, but honestly, I don`t find that it offers that much of an edge to me. I would not use a 5-minute chart to day trade crude oil, but I think a 1-minute chart or even a 30-second chart gives me all the information I need.
Some will argue that price driven charts smooths out price action, but so what? What do I care if price is smooth or not? I don`t draw trend lines anway.
I have been using a tick chart to AID in execution, but I rely on the 1-minute chart.
I will now do a similar extensive study with ES keeping an open mind, but I`m not super optimistic. I also have been using a tick chart for ES as well, but I rely on the 1-minute and 5-minute.
Anyone else?
Regards,
LF
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Schaefer
Registered: Oct 2004
Posts: 511 |
10-17-12 02:42 PM
Same experience here, as well. I mainly trade NQ, and I've been through range, tick, volume, renko, etc. But I always keep coming back to time based charts.
It's true, that some of them really smooth out the price action, and give you more detail, but it is counter intuitive to my style of trading, so I stopped using them.
So I guess, it all comes down to what works for you. And the only way to find out is to try them all out, and decide for yourself.
Good luck,
Schaefer
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Laissez Faire
Registered: Sep 2010
Posts: 4153 |
10-17-12 08:09 PM
Great minds think alike, Schaefer? 
On certain days, I actually think the price-driven charts hide more information from me than I can infer from a time based chart.
I like the consistency of the time based chart. Each day it is the same number of bars. No surprises there. I like having time on the X-axis and observe price travel across the two axes in a consistent manner.
I enjoy watching price oscillate from level to level. The 1-minute chart really gives me all I need.
That said, I will start my study on ES now, so I`ll keep an open mind and report back if I find anything.
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Laissez Faire
Registered: Sep 2010
Posts: 4153 |
10-17-12 10:46 PM
I could see myself replacing the 5-minute chart with a slower volume chart, but I`m not convinced.
Possibly using a 233 or 512 tick chart to aid execution.
Not convinced of that either, but will continue my studies.
No interest of discussing this, traders?
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