A Range Charts is also known as a Range Bar and it is a type of chart that is entirely based on a range of pip movement.
What is a Range Chart?
A Range chart is a type of chart that is entirely based on a range of pip movement and not in time. That means that a bar is plotted only if a pre-specified range of pips is achieved no matter if that range is achieved in a few minutes or in a few hours. That price movement is calculated between the high and the low and each bar is closing either at high or low.
The Range Charts were developed in themid-90ss by Vicente M. Nicolellis, a Brazilian trader.
Range Charts Features
Range charts eliminate the factor of time
A Range chart bar will always close at a high or at a low
A Range chart bar has the same price increment
Range Charts are able to eliminate the annoying market noise
Range charts plot more bars during active market hours and a few bars during non-active market hours
Range charts become more active in high-volatility days and less active in low-volatility days
Range charts are ideal for analyzing trending markets
Range Charts and Settings
Forex traders usually set ranges between 5 and 25 ticks.
◙ Short-Terms: 5 ticks, 10 ticks, and 12 ticks
◙ Long-Term: 20 ticks and 25 ticks
Trading with Range Charts
Forex Traders who wish to use a Range Chart can choose among different trading platforms including MetaTrader4 by adding an additional indicator, NinjaTrader, eSignal and several other platforms.
■ Range Charts