RANGE BARS
Range bars are a type of market chart that ignores time and focuses solely on price movement. Each bar has the same height, set by the trader, and is only created when the price moves by a specific amount (the "range"). This makes them less cluttered and easier to identify trends than time-based charts
How they work
Price-based, not time-based: Unlike candlestick or line charts, which are influenced by time, range bars don't care how long an asset takes to move.
Fixed-size bar: A trader sets a specific size for the bar (e.g., 10 ticks or points).
New bar creation: A new bar is formed only when the price moves a predefined amount. If the price moves less, the bar is not created and the movement is added to the current bar.
Time-elimination: The time it takes for the price to move to form a bar can range from seconds to hours, depending on market volatility..
Advantages
Price Focus: Allows you to focus on price movements without the distraction of charts cluttered with bars of varying lengths.
Trend Clarity: Makes trends clearer and easier to identify.
Risk Management: Because they are all the same point size, they facilitate planning exits, stops, and profit targets.
Flexibility: Traders can adjust the range size to suit their needs and the asset being traded.
Disadvantages
Loss of time information: Information about when events occurred is completely discarded.
Complex reconstruction: Chart reconstruction may require the availability of all price ticks (individual quote data), especially if they are being generated derivatively.
SP500 RANGE BARS THIS WEEK
