Another way is to have a time chart (lets say 1 min bars) and on the background you have the CVB. When the pace is slow, you will have many 1 Min bars inside one CVB. The CVB will be wide. When the pace is fast you will have skinny CVB with possibly just one 1 min bar inside.
Bigger spikes in the market don't always correlate to larger or longer term directional moves. Sometimes they do . . . sometimes they do not. Time based are charts are based on a variable aspect . . . that of time. Time based charts contain a varying number of contracts or shares are traded per minute (bar). This varying number has a great deal to do with what creates the choppiness and noise you see on a chart. You are seeing and mentioned the drawdowns to using time based charts . . . inconsistency. A constant volume/share based chart, one that is constructed (weighted) correctly and perfectly consistent, contains no inherent variable aspect. Every bar is weighted the same thus eliminating the embedded noise that most charts inflict on the charts. The advantage to well constructed CVB charts is perfect consistency. Whatever method you are using the triggers play out consistently. They simply play out faster when the markets are volitile and play out more slowly when the markets are weaker but they play out consistently and that is their PRIME advantage. You must ask yourself, do you want consistency in your decision making processes, regardless of the time of day when trading or do you want choppy, erratic and inconsistent outcomes to your decision making processes?
By overlaying time bars on volume bars you are muddying the waters. It makes price action really confusing. Try it for your self though, it might work for you.
You simply have to use a structured and consistent set of increments for all markets. No differnent than using 5 min, 10 min, 30 min, 60 min etc. charts. I use a nesting of the prime number 7 for all markets. Works well for me.
Exactly and that is why I said, watch the screen or go back to time bars. I think that your question should have been "help me to use CCVB" regards f9
I agree with ProfLogic. The need to add time to CVB should be evaluated. It is like adding time to P&F or Renko charts etc... These type of charts are meant to remove time from the equation. Why add it back?
I use CVB for intraday trading and can tell you that I measure 'market pace' by the speed at which the bars are built. Like anything in life, it takes a bit of time to get the 'feel' for it. I don't see how it would be practical to plot both time and CVB in the same charting window and they would be grossly out of scale. A more practical approach might be to simply observe both charts side by side, or over and under, as it were. A big move in a time chart, say 5 min. that builds a large bar may need many bars on a CVB chart. The spike in volume you see on the time chart can be confirmed by the printing of repeated volume bars. [/QUOTE] Well stated.
Speaking of it... You and ProfLogic are good traders. Can you or ProfLogic comment on the using of CVB or point me to a link of good information about them? Thanks in advance. (I've read somewhere that ProfLogic might have invented the CVB or at least popularize them.)
Search the threads, there are some good bits in here. Whether I invented them is open to discussion but not in here. I've been working on getting them offered by charting companies for a long time but for some reason most of the software companies ignore the requests. They can't comprehend their huge value. It's almost like they prefer us traders in the dark all of the time.