Non-Time Based Charts dramatically simplify chart data. OmniTrader 2012 implements 6 NTB Chart types. In this page, we show examples of each of them: Range | Tick | Point & Figure | Renko | 3-Line Break | Volume
Range Charts - Eliminate Small Trading Ranges to Clarify the Trend
Range Bars form from Ticks when a specified price range is achieved, up or down. Because these bars form dynamically, they will look like regular Candle Charts, with one range built after the other. Range Charts are very good at eliminating trading range noise and identifying the true breakouts. (
We are using a .2% Range on these charts.)
The Range Chart on SPY shows a very clear consolidation at about 11:30 and a downtrend starting at 13:30. The consistent color of the moves helps keep one in the trade (similar to Renko).
Another great Range Bar example on CVX.
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Range Chart on AXP, showing a very clear Consolidation from 11:30 to 13:30, then a break to the downside with solid red bars all the way to the Close. Note that the actual Chart has more up-and-down price action within the ranges – this is something a Range Chart will filter out.
Tick Charts - Reversal SPEED of Market Movement Through Trade Activity
Tick Charts give us an ENORMOUS advantage over 1 Minute Charts, because they show so much more information. Trends, Consolidations and Support/Resistance Breaks are much easier to detect in a Tick Chart than a 1-Minute Chart.
SPY is a very “liquid” ETF that trades continuously. The above chart is based on 100 Ticks. Note how the price action is much clearer in this chart than the 1 Minute Chart below it, and especially the Support Break at 125.7 at about 14:10 and 30 seconds.
Another shot of SPY, a few minutes later.
AXP does not trade as often as SPY, which is why its 100 Tick Chart looks a lot like the 1 Minute Chart. There is still value in the Tick Chart, however, because we see price action (activity) dramatically accelerate at 14:13 as AXP breaks Support. This means the market is very actively trading it – suddenly – and it is in a free fall. This is something we can profit from.
A 100 Tick Chart on CAT. Note the consolidation that formed in the Tick Chart from about 14:11 to 14:14. The break of this right range was very obvious in the Tick Chart – not so much in the 1 Minute Chart.
Point & Figure Charts - Easily Identify Long Term Support & Resistance
Point & Figure charts are great for identifying longer term trend changes, by establishing Support and Resistance lines.
In IBM, the transition from trading range to bullish movement in September was fairly easy to see in the Point & Figure Chart (based no 1 ATR movement over 50 bars).
For BA, we see several Resistance Lines that were easy to mark in the Point and Figure Chart.
Point & Figure is also great for drawing Trend Lines, as we see here on BAC.
Renko Charts - Generates Exceedingly Clear Patterns & Signals
Renko (Daily, 1 ATR) above Daily Candle chart for AA, with all chart patterns activated and a Moving Average Strategy. Note how crisp the Signals and patterns are in the Renko, compared to the Candle Chart? Trading Higher Highs and Lower Lows just got a whole lot easier!
Bank of America with Daily Renko and Daily Candle. Note how clear the trends are – both up and down – and how well the chart patterns in the Renko Signal entries. The Candle Chart has many Signals and Patterns because the price data is not as simple. Renko Charts help you stay with the trend.
3-Line Break - Clearly See Chart Reversals and Cycles
3-Line Price Break is fabulous for identifying key reversals. Here is the Daily 3LPB Chart on AXP above the Daily Candle Chart. Note how clear the reversals and cycles are in the 3LPB Chart.
CAT with 3LPB and Daily. Again, note the very clear turning points at Higher Lows and Lower Highs.
3LPB can be used for market timing. In the 3LPB Chart for SPY, we see a number of bars form after the turns, indicating the market moved up or down afterwards. This information can help us trade with the prevailing market direction.
Volume Charts - Confirm Trend Changes with Supply & Demand
Volume Charts are more subtle than the previous NTB Chart types, but if you look closely in the following charts you can see that the Trend Lines and Support/ Resistance are “straighter” because the bars are forming on a specific volume increment (twice average volume over 50 bars).
Trend Lines are much easier to draw in the Volume Chart on AA.
This example very clearly shows the effect of looking at Volume vs. Price on the SPY ETF, which represents the market. Note how straight the Trend is in the Volume Chart compared to the regular Candle Chart.
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Again, very clear lines can be seen in MCD. Other than this effect, the other bars form more or less the same as the Candle chart, making Volume Charts a highly viable replacement for Candle Charts. Also, note that the Highs and Lows eliminate “wicks” in the Volume Chart.
Again, a clear case for Volume Charts on this Real Time (15 Minute) Chart of JPM. The Trends are much easier to see because the chart spaces itself out more, based on volume action.
