This is not a smoothing function. This specifically regarding the completed traded volume at each price point/range. On a typical time based chart each bar consists of the range in price that happened during the construction of that particular time increment. If it is a 5 minute bar then the bar depicts the range in price over that 5 minute period. If that 5 minute period is on a ES chart at 4 am EST, typically the bar range will be small and the volume of completed trades in that bar will be very small. If that 5 minute bar period is immediately following the Fed Report, typically the bar range will be great and the volume of completed trades in that bar will be very large. This clearly shows that time based charting bars can and do vary vastly basted on the weight of the completed trades in that bar. This difference in weight effects the consistency of the outcomes of all methods applied on them because of the difference of the completed trade volume weight of each bar. Tic Charts are the same as time charts because a single tic can consist of 1 transaction of 1 contract or share traded or 1 transaction of 200 contracts or shares traded. This inconsistency in completed trade volume weight greatly effects the consistency of systems or methods. Range or equi-volume bars are again the same, inconsistent based on completed trade volume weight. A constant volume bar chart is a chart where each bar is exactly the same completed trade volume weight. That could be a 50 constant volume bar chart where each bar shows the range in price of the last previous 50 contracts or shares traded, a 10,000 constant volume bar chart where each bar shows the range in price of the last previous 10,000 contracts or shares traded or any increment you personally want to create. The smaller the number of contracts or share per bar, the faster the chart. The larger the number of contracts or share per bar, the slower the chart. Look at the chart I posted for Crude Oil. You said yourself it was "easy on the eyes" to read. If a chart is easy to read then one can teach themselves to take advantage of the information it provides on a consistent basis.
The markets work because people buy and sell. Our only concern is to be able to see those transactions accurately and clearly occurring in real time on a chart. My charts depict that in a clear and balanced way by showing that for every "X" number of completed trades bought or sold the price range for those "X" number of completed trades are shown in a single "X" bar of the users choice. This way the user/trader has complete control of the speed of the chart he/she is trading. Any mathematician you explain this to understands that the construction is simple, precise, accurate and can confirm that this environment gives one the ability to create a chart where the pattern interactions NEVER CHANGE.
Prof, hopefully that is a judgement reserved exclusively for your system, especially since you place such great emphasis on traded volume as a central tenet for its design. If you were painting with a broader brush, there are plenty of effective TA systems that in fact have no use for volume in any context.
I hope when you watch TV you choose to find the clearest picture possible because whether you watch the Golden Globes on a 10" black and white CRT or a 100" HD Sony flat screen, the program is identical.
Pioneer Elite Kuro Pro-111FD, but the VOLUME goes through Klipschorns courtesy a sweet little tube Mac Integrated.
Sorry, you just don't get it. I said "watch" TV not listen to it. Audio volume is not the same as visual/fixed contract or share volume.
Guys, why are you arguing amongst yourselves? You both believe that TA works, but different 'concoctions'...the argument (if it's even worth it) is with the malcontents who demand it never works.
Other than bid/ask liquidity both would be equally useless for making a trade entry decision, IMO. There are two counterparties to every trade, and an intiating party (liquidity taker) is not necessarily smarter or for that matter more germaine to your position's welfare and eventual outcome than the liquidity maker. That being said, if you have developed the use of volume into repeatable trade identifier with statistically positive expectancies then more power to you. But there are plenty of very successful traders out there who do not give any credence to volume in terms of trade entry considerations other than immediate order book liquidity for execution.