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 movements and not on 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 the mid-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