The amount of volume per any time period reflects the pace of the market. Higher volume periods of time correlate with more movement/volatility. IMO for someone that scalps and trades intraday - it is essential to distinguish between the low volume and high volume periods of time and sit out the low volume periods. So far I have found that the Time Bar Indicator is the best way to measure pace using CVB. The only problem is that it is highly confusing and counterintuitive indicator because it spikes to the highest levels when pace is the lowest and registers the lowest numbers when pace is the highest. So inverting the Time Bar Indicator would make it much more useful. I'm gonna PM Jerry to see if he can create an option to invert the Time Bar Indicator. Please contact him if you want to see it as well.
As an additional point, scalping can be achieved in a slow market as well as a fast market. This can be achieved better on Constant Volume/Share Charts because of the consistency at which the bars are created.
You might want to rethink what you have written. The trick to scalping is to time your entry in moments of low volume and be a tic or two ahead of the pack. When the big boys slap their MOs down they push your trade ahead like a surfboard on a wave. The other high volume you may wish to give some thought to is a clearance spike. In this case big boys are clearing their positions and if you take the other side then you will most likely be on the wrong side of the next wave. Just food for thought regards f9
If you're reading the speed with which CV bars complete and using that information in your trading, then I don't see how having a time histogram at the bottom of the chart would be anything but a useful visual aid and historical record. To the op, any software that allows you to program indicators would be capable of an inverted time histogram. There's an indicator in the NinjaTrader forums you could easily invert. - palinuro
For those using CVB's, the triad of variables is simply switched around a bit. Time and volume are interchanged. So the best leading indicator of price becomes the market pace a first derivative with respect to time. As often is the case a high impact visual indicator is required to take advantage or scalping, trend following or following the trading level of the popular ProLogic CVB approach (traverse trading of trends). The OP will not be able to process this contribution because of his confusion caused by how he links unlinkable dimensions of the market, particularly volatility. Market pace varies by seasons and econometric conditions. Use a non stationary window of 1600 5 minute bars to define the spectrum of pace and create a rainbow of visual time related colored dots. To do this divde the volume pace spectrum into a distribution of ten equal parts. Let the extremes be the ends of the rainbow (violet and red). Pair the remaining 8 central subsets and make them blue, green, yellow, and orange by descending pace. Place the indicator below the time absissa labelling in order to automatically have the first derivative of the time stamps for the CVB's. Calculating this unaided by an indicator may be as difficult as is has been for the OP to deal with the variables he mentions in the OP. What you see is dots in a row that change color over time; the color change is easily built into the mind for any of the three trading modes mentioned above. The mental process is kindred to music scale understanding done by the ear and mind's memory. The colors play out a theme or melody that is easily snesed and soon remembered as a consequence of repetition. Trust comes from the reliable repetition and the reward of making money by following the indicator. As seen the OP has no plan nor has he been successful. What he has learned is fear and anxiety as noted from his plaintive quests and whining. Here is how to use the indicator for three modes of trading: 1. scalping. This is a brisk short term trading modus that comes largely from fear of the markets after entry and emotional relief achieved by exiting very soon win or lose. during the day 40 to 60 trades will happen as a consequence of a series of two bar patterns that overlap. One pattern is detected and used as a leading indicator of price to scalp. It is the single color change from dot to dot. As the day procedes, regardless of market direction the rainbow is traversed from violet to red and back to violet. Scalping is don in both market directions usually alternating from short to long or vice versa. Freaked out traders may miss many trades since they are in emotional recovery. Scalps are done for each color change at the time of the color change. Blue, blue, green , blue would be two trades the first against the trend and the second with the trend. These (the blue -green range) would be occurring after 10 and before 10:45, usually. Over a point per trade would result, usually. 2. trading the ProfLogic modus(trading traverses of trends. This is inbetween trand trading and scalping so it is presented below and last. 3. Trend trading takes place 4 to 7 times a day. Since the pace declines as the day goes forward until the pm BO of pace, a different color visual pattern than scalping is used. The long diagonal of a trend is the objective since it represents max price change over the time of the trend. Two colors are observed for this: CVB color and rainbow pace color. The Pace or rainbow movement increases as a trend ensues. the trend is looking for it's price limit which occurs at the maximum rainbow color AND where the CVB bars change color after being the same color dominantly. since 4 to 7 trades occur, a lot of time is spent holding on one dominant CVB color as the rainbow dots procede through many scalps that freakout traders who are learning the fear and anxiety of failure. Here you make about all of the ATR as the daily range expands and after that you go to multiples of ATR as the price moves within theestablished range. Most traders will get this type of trading down after they learn how any day's R and S are established. Detecting that R or S has occurred will be obvious after a while. 2. Return to trading the traverses of trends (Prologic trading periodicity). Within the rainbow peaking of color which indicates a trend overlap is commencing, there are some periods when the color retraces to a lowest pace for that trend and then returns to advance in pace to an equal or greater pace. Remember the pace is a given color in the rainbow. The ratio of advance to retrace is 3^3 to 2^3 or 27 to 8. this sawtooth function has an odd number of scalps within each part where the minumum is three for any part (see scalping color patterns). So a traverse trade is done in the direction of the dominant CVB color and reversals occur at each end of the rainbow color spectrum in play. Only 3 or four colors are possible during a given part of the day as the pace range changes. it may be difficult to see the difference between the trend trading and the traverse trading. Trends are longer and there is both CVB colors in the trend and the dominant color is in a ratio as stated above. fro traverses there is a majority of one color only punctuated by an occassional scalping opposite color. this means about 15 or so trades will occur during the day. Most traders on the way to failure get pretty freaky and they cannot deal with their lengthening list of bad trade categoies which are overpowering their few good trade or breakeven trades. they can use the rainbow as a respite for staying on the sidelines during red, orange and even yellow periods of market pace. These are the times that they are most affected by the things that negatively affect the OP (read his posts for the myriad of examples he poses for our benefit). So three very distinct patterns of pace rainbow colors define the three trading styles. Scalping is single color pace (change) where a dominant and non dominat CVB colors alternate as well (these are tapes alternating on increasing and decreasing volume respectively). Traverses are combinations of scalps in odd accummulations (three minimum) and they are depicted by 15 pace range movements (the rainbow progression has a min and max pace within the trending range which is larger and dominated by CVB color) during a day whether the market is trending or range bound. Doing trends is the beginner's best game and the dual color simultaneous pattern of the CVB color reversal and the rainbow max color very easy to see if the person can stay calm and wait for it. The first one is at the end of the initial daily range expension, the second is arounf the time when the max color becomes blue or green instead of the first one where violet is the color. The two color shift (a double pace increase) out of the freakout sideline colors (red, orange and yellow) that should be used by those almost finished trading (through learning failure) begins the afternoon. To compliment the rainbow, there is the dominant PA pattern which, fortunately, is only two bars. Throwing this in is a good idea and it especially works on time bars. This graphic shows how it all works. Unfortunately, for most people they are inan entry/exit orientation which is a very severe handicap that leads to most trader failure (fear and anxiety of incoherence and the Bohr Effect Oxygen deprivation in the brain) are the onlt two most severe failings). The graphic pattern occurs during the intrabar trading mentioned above. Once the pace changes during the CVB to meet the trade condition, the trade is done.
LOL This is just another signal generator that can be used for several styles of trading as an ATS. Obviously the coding up all three is what leads to the suppression coding that is so essential to eliminate spurous signals in most coding efforts. It is probably true that most coding does not have suppression and as a consequence has drawdowns as part of the ATS. The range of daily profits for these three goes from 3x to 6x the ATR once you have clean signals only getting through the suppression circuits. Pace turns out to be one of the best ways to gate appropriate ATS signals into the trading decision tree.
----------------------------------------------------------------------------------- Prof that sounds convincing however, how do you do that - correctly constructed/weighted and perfectly consistent chart -. Entirely new to me - your help would be appreciated. Thanks for taking your time. Ch.
- ---------------------------------------------------------------------------------------- Jack would be very helpful for me to know what you mean by : OP and which indicator do you mean (previous post) and ATS signals. Thanks Ch.