Range Bar Charts

The Future of Charting is Here Today

A true Range Bar chart only builds new bars when the price covers a given and specific range (instead of just building candlesticks every 5 or 15 minutes etc), and then moves to the right just like normal chart to start building the next bar.  Real Range Bar charting will not "paint" a new bar for long periods if price hasn't moved enough, and will not paint a small flat bar just to move forward because the clock is advancing.  In other words, "time" has no effect on this type of chart.

Due to the fact that time has been removed from the TradingFX Range Bar Charts you can benefit from and gain a much cleaner, noise free charting display with every specific pip range study you select, regardless of the currency pair you are tracking.  This means that all of the tall elongated bars from rapid price moves and all of the thin lifeless bars from slower price moves are gone, and you are instead provided with a very consistent pure price Range Bar charting display.  Plus the typical candlestick chart tails and wicks are also greatly reduced, since a new Range Bar is only created after and each time the current pip range is filled, which gives much more significance to the small tails and wicks that do present themselves.

The charts below
represent the same period of activity on the same pair. However you will notice how the Range Bars disassemble the tall elongated time-based candlesticks, tails and wicks created from rapid price moves and reassemble the very small candlesticks from slower price action. This allows every technical indicator, oscillator and study to respond properly, which improves their performance and reduces lag, while creating a superior and more consistent charting display.  You should also look at how the TFXD oscillator is smoothed considerably by the Range Bars verses the MACD on the time-based chart.  This is the same benefit and improved performance you will find with any indicator placed on the TradingFX Range Bar Charts.

             Candlesticks made every 5 minutes                            Range Bars made every 8 pips of price movement
          10 Candlesticks ~ 77 pips marked high to low                        25 Range Bars ~ 77 pips marked high to low

Range Bars Disassemble Rapid Price and Consolidate Slower Price Moves

The most advanced and promising approach to charting is to eliminate time from the equation and concentrate on the price action.  After all, it is price that you trade rather than time, unless you trade the options market.  Essentially this refers back to the early days of technical analysis and the use of Point and Figure Charts that only recorded price changes and opened a new bar once that range was covered.  You can also apply modern concepts of indicators, which are bar based.  The resulting smoother charts makes it possible to adjust your indicator's periods by imputing a lower number to run more closely to the current price, effectively reducing lag from any technical study.

Our experience and back-testing has proven that Range Bars are particularly good at focusing on and clarifying price movement.  With Range Bars, long meandering horizontal "congestion" is condensed into a bar or two, concentrating attention on the essential underlying price movement while eliminating unnecessary chart "clutter" and "noise".  This also makes the use of trend lines easier, and chart patterns more identifiable.  Most chart noise can be removed by selecting the appropriate Pip Range Bar for the currency pair you're trading.  Using a bar size slightly larger than the typical oscillations in the 1 to 5 minute charts as a guideline, you will be eliminating most of the noise that causes false signals, late decisions and poor trade entries.

                                        Clear Entry and Exit Signals

The charts below represent the same period of market activity on the same currency pair.  Once again you will notice how the Range Bars disassemble the tall elongated time-based candlesticks, tails and wicks created from rapid price moves and reassemble the very small candlesticks from slower price action.  Plus you can again see how the TFXD oscillator is smoothed considerably by the Range Bars and provides more accurate display verses the MACD on the time-based chart.  TradingFX Charts allow for a more precise charting strategy by eliminating the noise and enabling more accurate indications for entering and exiting trades.

       Range bars made every 8 pips of prive movement                       Candlesticks made every 15 minutes

Both examples show the same pair and time frame with approximate price movement from and starting at:
77.80 up to 78.30 (+50) down to 77.35 (-95) up to 78.20 (+85) down to 77.10 (-110) up to the 77.40 range (+30)

These examples clearly show some of the differences and benefits of using the TradingFX Range Bar Charts, plus explains a few of the reasons why many traders experience problems when trying to make decisions with charts that are based on time intervals and not pure price movement.  What does time have to do with your charts and trade decisions, when as a trader what you really care about is what's happening to the price and the clarity of your chart displays?

Are you ready to learn how to use Range Bar charts in live market conditions? You will see a more accurate view of the currency pairs and their pure price movements using the TradingFX Charts.  TradingFX can help you become more consistent and trade with greater confidence, while improving your market behavior long term.