Range bars and Point and Figure

Happy Diwali to all traders.

While Range bars are the newest kid on the block in trading without time charts, there is a lot of similarity between them and other conventional non time charts like Renko, Kagi and Point and figure charts.

Range bars are constructed in a way that shows complete price movement tracing from close of the previous range bar to the high, low and the close of the corresponding time bar. The basis of movement is reversals that are more than the range bar unit.

All the other three categories of charts Renko, Kagi and Point and Figure charts show discrete movements of price based on a unit similar to the Range Bar range, but with the additional price rounding of the highs and lows to the range unit (brick in Renko and box in Point and figure and reversal unit in Kagi).

In fact if one rounds price in the range bars and looks at trend movement based on successive highs being at least one range unit higher (for uptrend) or lower (for downtrend), the result is presto!! a Renko chart :) ... And we know that Renko and Point and Figure and Kagi charts are basically the same charts with different visual representation. Kagi also adds the reversal unit to be a fixed value or a percentage.

At TradeWithMe, we are working on a new version of Range bars that avoids some of the noise generated by the representation of the charts to include the closing value. The intermediate results are interesting. Stay tuned for more details here.

Have a safe long weekend.