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Chapter 7, Part I. Chart types. Page 5

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 15, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Now, take a look at Chart #4 and tell me, what is the difference between those two bars?


    #4 Examples of bars
    [​IMG]

    Pipruit: Well, on the first bar dash from the right side is higher then from the left, and on the second bar is vice versa…​

    Commander in Pips: Good, and what does that mean to us?

    Pipruit: Since these dashes shows open and close price correspondingly, I think that during the first bar close price is higher than the open price, hence, during this period market shows some upward price action. On the second bar, conversely – there was a down move, because the bar closed at a lower price than it opened.​

    Commander in Pips: Excellent! And how we can determine the trading range of the particular period?

    Pipruit: This is simple. Trading range is just a difference between high of the period and low of the period, i.e. particular bar. But let me ask something?​

    Commander in Pips: Sure, go ahead!

    Pipruit: How we can determine the price range or open/close levels of some period that is not typical for our charting software. Say, the software does not allow us to build 3.5 day bars or 3 week bars, what we should to do in this case?​

    Commander in Pips: Can you guess by yourself? You need just drop your time frame and use lower time frame bars for this purpose. For example, you need the trading range of the 3.5 weeks. What does it mean? 3.5 weeks is equal to 17 days. Use the daily chart, so you can find the bar with lowest price with 17 days and with highest price within this 17 days. This will be the trading range that you want to determine. So, the same is with, say 17 hours range. Just drop to hourly chart and make the same observations. The most types of charting software currently allow us to build charts as low as a 1 minute chart, or even 1 tick chart.
     
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