Akros
06-02-2006, 05:43 AM
Momentum Bars
by Howard Arrington
Two articles in the Stocks, Futures & Options magazine introduced a new charting concept. The first article was 'Paradigm Shift Lights the Way to Momentum Bars' by Desmond MacRae, SFO Feb 2003. The follow-up article was 'Momentum Bars: The Sequel ...' by Desmond MacRae, SFO Apr 2003. These articles describe a charting concept developed by Danton Long called Momentum Bars.
Momentum Bars are basically constant range bars. The bars look like standard chart bars with an open, high, low, close and volume. The high-low range of each bar is constant. A new bar does not start until a price tick is received that would exceed the fixed range of the current bar. Momentum Bar charts have the following characteristics:
Each bar is the same height because the range is constant.
The close of a bar is always at the high or low of the bar.
The open of a bar is always one tick below or above the close of the preceding bar.
The time period covered by each bar varies.
All gaps are filled with inserted 'phantom' bars.
The 'phantom' bars that are inserted to fill a gap create an interesting effect on standard studies. It is true that orders cannot be filled on these 'phantom' bars. But they may generate trade signals more rapidly. You will have to experiment with Momentum Bars to get a feel for study behavior with this new charting concept.
http://img474.imageshack.us/img474/7476/49119lc.gif
by Howard Arrington
Two articles in the Stocks, Futures & Options magazine introduced a new charting concept. The first article was 'Paradigm Shift Lights the Way to Momentum Bars' by Desmond MacRae, SFO Feb 2003. The follow-up article was 'Momentum Bars: The Sequel ...' by Desmond MacRae, SFO Apr 2003. These articles describe a charting concept developed by Danton Long called Momentum Bars.
Momentum Bars are basically constant range bars. The bars look like standard chart bars with an open, high, low, close and volume. The high-low range of each bar is constant. A new bar does not start until a price tick is received that would exceed the fixed range of the current bar. Momentum Bar charts have the following characteristics:
Each bar is the same height because the range is constant.
The close of a bar is always at the high or low of the bar.
The open of a bar is always one tick below or above the close of the preceding bar.
The time period covered by each bar varies.
All gaps are filled with inserted 'phantom' bars.
The 'phantom' bars that are inserted to fill a gap create an interesting effect on standard studies. It is true that orders cannot be filled on these 'phantom' bars. But they may generate trade signals more rapidly. You will have to experiment with Momentum Bars to get a feel for study behavior with this new charting concept.
http://img474.imageshack.us/img474/7476/49119lc.gif