Price driven charts - Do you adjust settings based on changes in volatility?

Discussion in 'Technical Analysis' started by Laissez Faire, Mar 7, 2018.

  1. Xela


    I'm not quite sure what you mean by "sensitive to price action and trading", but I certainly agree that they give you a better representation of what's going on than timed charts do. (There's nothing to stop you from looking at both/all three, if you want to?).

    For what it's worth (if anything) if you're looking at changing how your charts are constructed, personally I'd strongly recommend constant-volume bars over tick charts. My reservations about tick charts include my perception that, unlike volume charts, they don't/can't distinguish between tiny and huge orders being transacted.

    It's not easy to verify. It requires meticulous, methodical research and analysis over a long period.

    I'd been increasingly strongly advised to switch to volume charts by (successful, professional) traders I knew, who knew how I traded. I eventually tried it, and ended up wishing I'd done so at an earlier stage (but I'm very difficult to teach/advise and have to work almost everything out for myself). I effectively ran both methods (i.e. timed and volume charts) side-by-side for 6 months, taking "the same" price-action-based entries for each, with the same trade management (different trades, of course, though not very different numbers of trades, overall), and compared the results, which were consistently and significantly favourable for futures/volume: briefly, I was able to average about 25% more profit, overall, without increasing the risk, each month for 6 consecutive months. This is, of course, a very superficial, abbreviated summary - the statistical analysis was much more complicated and intricate than I'm making it sound; but the mechanics of actually doing it weren't.

    Again, with apologies, I'm not quite clear what you mean by "price-driven charts", here. What sort of charts aren't "price-driven"? o_O
    #11     Mar 8, 2018
    Laissez Faire likes this.
  2. Thanks for your input, Xela. I'm on the run, so will reply fast on your last comment/question.

    Maybe 'activity-based' is a more precise word. Regardless, time based charts plot based on time & price, but they don't need price movement to be plotted. In effect, you could have a 1 point range on the ES with 390 1-minute bars each day.
    #12     Mar 8, 2018
    Xela likes this.
  3. qxr1011


    no significant edge, except when price moves fast against you
    #13     Mar 8, 2018
    Laissez Faire likes this.
  4. qxr1011


    that was good advice
    #14     Mar 8, 2018
    Xela likes this.
  5. when looking at the auctioning process, what is important to me are swing highs & lows. these tell me the number of attempts to take price higher/lower, & at what levels. we can imagine how much of these are omitted when we use an M15/5 tf for eg. even M1 during high impact news will miss the finer details. if you do not trade intraday, time based charts are good enough. also, you trade ES which has a 12.5usd tick value. this is a 'thick' per tick contract to me, as is NK. my personal opinion is tick/volume charts are less useful here, since the thicker tick values mean the range prices move will be less

    the read of finer details to me is the advantage of tick/volume charts as one looking for intraday entries. yes, a finer tf like 30s will show more. but say vs a 500tick chart that prints every 500tick, you will get alot more bars. a 500tick bar will also reflect the amount of trading interest as it prints each bar. when trading activity is high, it prints more. when low, it prints less, giving one a sense of the current interest level

    for settings, as a daytrader, I want to see an entire day's worth of x tick bars on my screen, without having to squint my eyes. if I use 1000ticks for an instrument, & it shows up on only half my screen, I will go smaller till my screen fills. not to say time based charts are useless. I also use time based charts for higher tf chart lines preparation
    #15     Mar 8, 2018
    777 likes this.
  6. Try Looking at the Bigger Picture Bud - As to where you are intended on trending the Pair and where you think that the Pair should end up - If this fails than have your settings inline with what you think that Price is trying to convey to you than re-check your work as Time Pasts as so you can begin to understand when you are at adequate Support or Resistance Level as of the Price Moving Onwards. I hope that you will find this piece helpful.
    Last edited: Mar 10, 2018
    #16     Mar 10, 2018
  7. toucan


    Laissez Faire...

    I use tick charts and volatility changes over time, so i review my charts weekly and change the tick sizes, if needed for the next weeks trading.

    I also review weekly and change if needed, trading paramaters like number of contracts, initial stoploss and variable stops.


    #17     Mar 10, 2018
    Laissez Faire likes this.
  8. The question was about adjusting charting software parameters - Correct me it I`m wrong.
    #18     Mar 10, 2018
  9. I update values of my volatility study monthly. Many different types of studies out there. Only one is needed. Fragmenting it into a trade plan will be the challenge of your life if successful.
    #19     Mar 17, 2018
  10. Sounds interesting. Care to share more...? :)

    I pay close to various price parameters including various ways to measure volatility which is updated daily/weekly, but haven't yet incorporated it in my use of tick/volume charts which I'm still studying.
    #20     Mar 17, 2018