Range bar chart trading is an advantageous and effective way for traders to identify profitable opportunities in the markets. Just like using Renko candles, it eliminates noise from price action and filters out irrelevant market noise that can cloud the judgment of a trader. This blog post will explore range bar chart trading in further detail so traders can better understand this powerful analysis tool at their disposal.
What Are Range Bars?
Range bars are one of a kind method for building price graphs and are great for discovering the basic pattern and development of the present bar. Since every bar on the diagram has the same range (high to low), it lessens the instability and whipsaw inside of the range of the bar.
These bars are produced ceaselessly as another tick is framed outside the base price range. Point & figure or Renko diagrams firmly identify them, equivalent to price range change. This kind of bar chart outline is an investigation of unadulterated price development, and time is not taken while plotting the price activity. Range bar development does not depend on time but instead relies on price development; thus, the x-axis of this kind of diagram is insignificant.
At the point when these bars are developed, the diagram’s reliance on the time scale (x-axis) has been uprooted as it creates its own price scale on the y-axis. This helps to evacuate gaps and create clear levels of support & resistance. Range bars additionally work with other pattern markers, most indicators. These are awesome for watching dynamic price action and are useful in recognizing support & resistance lines, buy/sell signals, and trendlines.
More About Range Bars
Must have a high/low range that equals the pre-defined range.
Should start out of the high/low range of the last bar.
Should close at either its low or its high.
How To See Range Bar In Amibroker?
Initially, we need to specify the tick size of the scrip in Amibroker. To define the tick size of a scrip in AmiBroker follow the image below.
- Open Amibroker and Open the Charts in which you need to plot range bars
- Go to Symbol -> Information (Ami Version 5.50 and above)
- Go to Contract Specification and enter the tick size value as the lowest possible price movement. If the tick size value is not defined AmiBroker by default takes the value as 0.01. As in Nifty tick size should be 0.05 as the minimum price movement possible in Nifty is 0.05 points.
- Now set your favourite tick size by clicking Tools -> Preferences -> Intraday and put your needed tick size as shown below. After setting the tick size now you can change to range bars easily by right-clicking over the charts, then go to Intraday and select your needed charts.
Our Secret Range Bar Chart Trading Strategy
This is our secret trading system to trade Range Bars. These Bars are already minimizing whipsaws and our proprietary trading system is catching all possible moves. Since the start of this year, it has booked 1600+ points in Nifty future. It’s AMAZING. And between 15th June 2015 to 31st July 2015, it booked 400+ points. It’s REALLY AMAZING. Yes, it’s 101% mechanical. No brain involved, no mind involved. There will be a few losing trades also. But if you can not bear consecutive losses system is not for you. You need nerves of steel to trade. We have seen guaranteed returns in the long term.
What is Our Range Bar Chart Trading Strategy?
We trade Range Bars with a SuperTrend indicator. Together, this system can eliminate most of the noises and filter out the whipsaws. We enabled this system for even trading normal candles. We also enabled this for closing positions at the end of the day or choosing your desired trade start time. Check the below image for this trading system in action in normal intraday 5 minutes candle.
However, we now discontinued the usage of the system on AmiBroker and you can use the same Range Bars in other charting platforms.
Range Bar Chart Trading in Zerodha Kite
You can get Range Bars in Zerodha Kite too. To get them just open any chart in Zerodha Kite and from the Candles dropdown select –> Aggregated Types –> Range Bars.
This will open the Range Bar charts in Zerodha Kite. Suppose in Infosys stock we selected 10 as the range and hit enter. Instead of selecting the range yourself, you can also select Auto Select.
Here too, you can add a supporting indicator like SuperTrend and can start trading the markets noise-free. Check the image below to see how you can catch a long rally with this combination.
Range Bar Chart Trading has been shown to be a powerful tool for traders who are looking for flexibility and greater control over the way that they approach their trades. This type of charting allows traders to eliminate distractions, focus on ranges rather than time frames, and identify variations in support or resistance that longer-term charts may otherwise miss. The ability to customize this type of chart trading provides an unparalleled insight into properly understanding market trends more effectively. Range Bar Chart trading is quickly becoming a must-have skill of professional traders due to its many advantages as discussed in this blog post.