Mapping Your Voyage of Discovery - CQG.com

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Part 1Basic Chart TypesConstant volume barsConstant Volume bars have many advantages over traditional chart types, in that they builddata based on activity. This can be either set as the number of trades (ticks), or an absolutevolume setting. I prefer the latter. The problem with Tick based volume is the everincreasingnumber of ticks from HFT’s (high frequency trading). This means that thegoalposts continue to shift. The principle advantage of volume-based bars is that many ofthe traditional momentum indicators are skewed on normal timeframe based charts byperiods of relative inactivity, or the extended hours that most markets are now open. Thismeans that momentum tends to flat line and requires a structured approach to etherredefine data, or have a method for adjusting to the correct timeframe chart for youranalysis. Most traders do this instinctively. However, it is equally important to have amethod for what volume setting you should use. Here, is the method I employ.Taking the E-mini as an example, I first compute what my typical risk is via Volatility TimeBands, as they compute risk based on the time of the day it actually is. I know fromexperience that it is usually around four big figures. However, you can use a 1 periodAverage True Range. Adjust your chart timeframe until that figure is 20% above what youview as acceptable risk. In my case, this means an Average True Range of five big figures.The 10-minute chart shows that five is often a limit of range with occasional spikes oneconomic numbers.
Next, place the volume study on the chart and modify it so it is showing the bid / askvolume. This also tells you whether buyers or sellers are in charge or if there are spikes inactivity.Take the normalised volume that misses the opening and closing and gauge where thenormal limits of volume are. On this market, it is typically between twenty and twenty fivethousand.This is now the volume range that you can use on the Constant Volume chart. The differencebetween that and a 10 minute chart may initially seems superficial, but analysis of the in thenumber of bars built in a day is considerable, with nearly twice as many Constant VolumeBars in the original pit hours. The morning session will build less and help preventmomentum flat lining.
Page 1 and 2: IntroductionStructure is everything
Page 3 and 4: have been enough. Through time, I b
Page 8 and 9: The 10-minute chart and the 25,000
Page 10 and 11: Profile® is that linking price, ti
Page 12 and 13: Basic philosophiesIt is primarily u
Page 15 and 16: TFlow and Pre Trade AnalyticsTFlow
Page 17 and 18: This is how my TFlow is first displ
Page 19 and 20: SmoothedSmoothed use a proprietary
Page 21 and 22: This example highlights once more h
Page 23 and 24: What does Entry Signal Evaluator do
Page 25 and 26: Momentum IndicatorsThe vast majorit
Page 28 and 29: Slow StochasticsSlow Stochastics re
Page 30 and 31: This chart is half day of the Eurod
Page 32 and 33: Trend Lines and FibonacciThe need t
Page 34 and 35: PatternsIn many ways, patterns are
Page 36 and 37: FX is an area where no one looks fo
Page 38 and 39: DOJI’SThis the only Candlestick p
Page 40 and 41: Analysis from the Profile Area Tool
Page 42 and 43: Intraday Doji’s can be qualified
Page 44 and 45: The top itself was a Shooting Star
Page 46: Fundamental Analysis.How to interpr

Mapping Your Voyage of Discovery - CQG.com

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