Does anyone have any links to any pics of what Momentum Bars actually look like? I'm always looking for new things to program in and fool around with. Thanks.
I believe what I use may quailify as momentum bars. It's a variation of Richard Arms equivolume. Instead of each bar based on a period of time, it's fixed volume(100 contracts, 200, etc). Very easy to see SAR & detecting false breakouts. Example: A normal 1m up bar covers 4 ticks with open & close at the extremes and volume of 1000(good momentum, right...?). But this volume method will show a 3t up movement on 100v, then 1t consolidation of 900v during that minute(Not a good momentum bar.). Looking for an orderly distribution of volume over that 4t range, good momentum.
Just wanted to thank all that have contributed to this thread, especially TriPack. This thread has peaked my curiosity more than anything I have read in the last year! Keep the ideas coming! JWest
Understanding how to use bars certainly is the core item for making money. Keeping a monitoring focus by being at the right place at the right time is what makes trading a KISS operation.
This is how I work with Volumetric Bars. (They are offered in my charting software) http://www.fibonaccitrader.com/HELP40/volumetric_bars/default.htm Hope this helps
I've noticed from extensive research that some sort of relationship exists between more buying than selling and vice versa, but what confuses me is that when measuring it in terms of either volume, weighted exponential volume, or number of transactions, nothing gives a clear indication of the MM's "resistence" to price change. Sudden movements occur for no apparent reason with low volume in either direction, and at times massive pressure on one end doesn't equal price movement. So the real thing I want to see with a bar/charting method is how much the MM's and price actually react to volume, as well as how much buying/selling is being done. Part of that is volatility, but it seems inconsistent. Say there is 1,000,000 shares more being bought by the outside market than being sold; in some of my Island data calculations, it works as expected: the price will rise a certain amount per a certain number of shares excess in that direction. Each stock has its own value for that, based on the float, liquidity, and MM strategies. However, at times it may not do much to the price, meaning that someone is "absorbing" the liquidity. I do note that round numbers like at each dollar mark form resistence, but I believe that is due more to trader's tendancy to place orders at these prices than MM behavior. A stock has has different properties at $4.00 than it does at $4.17 because of this. I once charted T&S volume bars which had a fixed size, but a percentage of it was red/green depending on recent activity. It would create new bars whenever volume or volume excess pressure reached a threshold difference, similar to the fixed price bars. In the attached picture, each red/green volume bar represents a percentage of buy/sell pressure from T&S. A new bar is created when the total volume since the last bar is > MAXVOL, the volume of the most active minute of the day. There is also price, price MA, buy/sell MA, buy/sell volume, and buy/sell transaction count. Could a derivative of this system be useful?
Hi, constant range bars (also called momentum bars), together with constant change and constant volume bars, have been implemented in InvestorRT last month. As I just posted a list of resources about these momentum bars in the IRT yahoo forum, this looks like the relevant thread to cut and paste it here on ET. Enjoy, Eddy ============================================================================= Hi, First, I have to say that having these new features in IRT is a great news, because this bar charting techniques really represents IMHO the future of Technical Analysis and were so far not widely known/used only because there were not available as standard feature in the main charting package... So here are some resources to convince you : 1) SFOMAG (http://www.sfomag.com) Two interesting discussions about such bars were published by Desmond MacRae in the February and April 2003 issues => Paradigm Shift Lights the Way to Momentum Bars => Momentum Bars: The Sequel â The New World of TA and Parallel Invention 2) DANTON LONG article (already reproduced in this thread) A great discussion about constant range bars can be found here http://www.daytradingthemarkets.com/forums/showthread.php?t=58. It provides a great overview/comparison with other chart types (constant tick, kagi, renko charts, etc.). This article is an absolute must read !!!!! 3) FRANK DILERNIA book extract An other very interesting paper is available here : http://www.dacharts.com/articles/_AnalyMktTrad.htm 4) CYNTHIA KASE book and articles Momentum bars / constant range bars are also called Universal bars or Kase bars with reference to the very interesting book of Cynthia Kase 'Trading with the odds'. http://www.amazon.com/exec/obidos/tg/detail/-/155738911X/ For the record, if by carefully reading this book (p 140 & more), one will notice that Kase bars are different than momentum bars because the range of each bars is not constant but based on a complex ATR formula, with some low and high cap values.. Of course, then everything depends on the update frequency of the ATR value⦠IF this is updated once a day, for example, then Kase bars have a constant range on an intraday chart and are similar to momentum bars. But the use of ATR concept is very adequate as it may adapt the range of the bars so that you would eliminate a relatively bigger noise in case of higher volatility.. Btw, I recommend the reading too of the C. Kase articles which can be found here : http://www.kaseco.com/articles_etc/articles.htm (if you don't like to fill up forms, just download the the articles directly from here : http://www.kaseco.com/articles_etc/articles/requests/) =============================================================================
Here is a screenshot of my implementation of MBars compared to sale plots. It has a sensitivity of +/- $0.04.