Price vs Time & Price vs Volume Charts

This is a discussion on Price vs Time & Price vs Volume Charts within the Technical Analysis forums, part of the Methods category; I was thinking the other day about how often I switch time periods relative to the activity of the market. ...

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Old Oct 8, 2008, 6:54pm   #1
 
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Price vs Time & Price vs Volume Charts

I was thinking the other day about how often I switch time periods relative to the activity of the market. For example, on a sleepy market day (unlike today) I may be looking at 30 - 60 minute candle chart. Whereas, on a day like today, I may focus on 1 - 5 minute candle charts. Really, I figured, it depends on the market activity - i.e. the volume.

Based on this, I thought it may be better to use charts where the candles represent volume rather than time. So, a single candle may represent 50,000 contracts (or whatever) rather than an amount of time like 5 minutes. Sure enough, such charts do exist as I found in this article on the net:

Improve Your Trading with Tick and Volume Based Charts

My questions are:

Has anybody used such charting before?

Did you find they worked better or were clearer?

Does it solve the switching issue I mentioned above or are you constantly having to switch the volumes of the candles instead of the time?

Who provides these types of charts and is there anywhere that you know of where I can find more information about them?

Thanks

JD
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Old Oct 8, 2008, 7:11pm   #2
 
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OMG, another complication to add to the ten thousand indicators! My brain is already boggled. Without bothering to strain it more looking into this, surely volume cannot tell us the direction of trading? It could be buying or selling...

We could have red volume candles showing a decline in volume but the real chart could be going up faster than ever.
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Old Oct 8, 2008, 7:18pm   #3
 
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Originally Posted by 10kLoser View Post
OMG, another complication to add to the ten thousand indicators! My brain is already boggled. Without bothering to strain it more looking into this, surely volume cannot tell us the direction of trading? It could be buying or selling...

We could have red volume candles showing a decline in volume but the real chart could be going up faster than ever.
You have missed the point slightly. Charts are not indicators in the usual TA sense of the word.

It has nothing to do with what the volume indicates - volume represents a simultaneous buy and sell transaction. It, therefore, doesn't indicate direction. That wasn't the reason for my post. I just wanted to know if using a Price vs Volume candle chart (so time is not represented on the chart at all) gave more consistent charting relative to the market activity.

Last edited by Jaydee; Oct 8, 2008 at 7:24pm.
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Old Oct 8, 2008, 7:30pm   #4
 
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Yes, I've missed the point completely. Your aim is to have a more meaningful volume indication?
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Old Oct 8, 2008, 7:42pm   #5
 
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Originally Posted by 10kLoser View Post
Yes, I've missed the point completely. Your aim is to have a more meaningful volume indication?
No, I just want to have a consistent x-axis for price movement. Price relative to time isn't consistent if time is plotted on the x-axis because market activity varies over time. However, if volume was on the x-axis, it may (I don't know for sure which I why I'm asking) be more consistent.

Essentially, I'm hoping I wouldn't have to change the charts (like flicking between 5 and 30 min candles) as the market activity changes. Instead, by using volume I'm hoping it would keep everything constant.
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Old Oct 8, 2008, 8:49pm   #6
 
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none time based charts are wonderful to trade. i have used them before and i know traders that use them all the time.
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Old Oct 8, 2008, 9:00pm   #7
 
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Originally Posted by forker View Post
none time based charts are wonderful to trade. i have used them before and i know traders that use them all the time.
Do you remember which provider you used? CQG perhaps?
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