Change Charts

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Change charts isn’t a statement. its just another setup option.

I’m not exactly sure if this will be beneficial or not, but it looks promising. Since Richard is now posting videos with androids resisting the sexual advancements of humans, I thought I would break my own rules, and post something market related.

I’ve been experimenting with range charts, and one thing that I’ve not been able to do, is trade breakouts. It does a fairly good job of identifying reversals. The breakouts are probably there too, but unless I get a good retracement, I can’t recognize it quick enough. By the time I see it, the train has left the city - much less the station.

Take a look at a ‘change’ chart. The setting is exactly the same as a range chart - 2 points. The only difference is the construction. For example, if the current bar opens at 2000, a new bar will start at 2002.25, or 1997.75. That may not seem that different on the surface, but it actually is. Some of these bars may actually print with a range of several points. That in itself isn’t surprising, but the picture it paints, seems to be. I’ve cherry picked two examples using the different settings.

It also has a Renko feel to it that Prospectus might like. Identifying flags, and other setups used in a trending market, seems easier with this type of chart.

Rinse Job on the Change chart

Rinse Job on the 5′ chart

Gap on the 5′ chart

Gap on the Change chart

Gap on the Range Chart

I didn’t post the rinse job on the range chart, because like I previously stated, it does a good job on reversals. The problem with the range chart (to me) is that it took so long before it gathered enough steam to power ahead. After the gap, it didn’t appear to do much , and didn’t seem like it would. However, on the Change Chart, you could see the orderly nature of the breakout.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com