Range Bars - a new look at the market
All of us have often come across the fact that sometimes the price fluctuates for a long time in some small range, creating “noise” on the charts and distorting the indicators. In order to remove such noise, a new type of graphs was created - Range bars. Invented the range bars for use in their own trading in 1995, the Brazilian trader Vicent M. Nicolelis. Below we will familiarize ourselves with the installation script Range bars at Metatrader 4 and consider the benefits of this type of chart.
Range Bars Charts in Metatrader 4
Today we will analyze a new type of chart. To say that they are completely new is wrong. But since they are not standard for Metatrader 4, most users are unaware of their existence. In this article, we will consider these charts and add them to our trading terminal so that you can work with them.
What are these graphics that are not in Metatrader 4?
These charts are called RangeBars. In 1995, the Brazilian trader Nicole Alice the Younger, the author of these charts, developed them due to the fact that he did not like that there is an element of time on ordinary charts:
That is, each of our candles is a certain period of time, and we can see how the price moved during this time.
Let's say that we have an open M15 chart:
This means that each candle is 15 minutes of time that has already passed. We see how the price moved, how it opened at the beginning of this 15 minute gap. But charts, as you know, can have periods when the price just stands still. The graphs periodically show that there is no significant movement, as in the photo below:
For 40 candles, nothing happened. For 10 hours, the price stood still and did not move anywhere.
But the nature of the indicators is such that they follow the price, and there could be a buy signal. But if it was a signal for sales, then it could spoil our trade a little. Perhaps we would get a loss and all because of the flat, when the signals are fuzzy. Price provokes indicators to give not quite correct signals. The thing is that candles appear in a certain period of time, and not when the price has passed any significant or set by us interval in points.
Range Bars are different in that they have no time. Here, each candlestick means a price movement, and not some period of time. That is, until the price moves anywhere, a new bar will not be drawn. In the photo I have a Range Bar open with an interval of 13 points:
And set the same indicator on a regular chart. What will we see? See for yourself:
I think you yourself have noticed how the CCI indicators on the charts differ. On a regular chart, the indicator shows a tossing line that does not know where to go:
And on Range Bar, it's a smoother and smoother line:
It unfolds only when the price unfolds. And not because of any shaking in the market, as is the case with the usual schedule.
The same with the rest of the indicators. Each of them will have different readings, because there is no time dependence on the RangeBar. A new candle is drawn only when the price passes a given number of points.
Let's see how to install this chart in your Metatrader 4. Open the archive, which can be downloaded at the end of the article. We copy the indicator and library files to the terminal following the typical instructions.
After that, open the trading terminal. In order to set the Range Bar chart, we need a currency pair with which you will work. Let's say this is GBPUSD:
The graph window appears:
Set the RangeBarChart indicator on it:
In the settings window that appears, you can configure the schedule as you wish:
First setup Pipipange is the number of items we want to see in the RangeBar. Prior to that, we had an open chart where each RangeBar had 13 points. You can, for example, use 10 points:
Next comes Timeframe.
If you are going to work with only one chart for your currency pair, then the timeframe is not important. Time does not participate in the construction of the RangeBar chart. This setting is designed so that you can open multiple charts for the same currency pair, but with different settings for the same PipRange.
For example, if you want to open two charts of the EURUSD pair, so that on one of them the PipRange settings are 10 points, and on the other 15 points. Therefore, to open one chart, you can set the value to 2, and for another 3:
This setting is mainly needed so that you can distinguish them in the system. Timeframe is set in minutes. In this case, we need 2 minutes. This is required for our metatrader. In the graphs themselves, I remind you, time is not used. Therefore, if we use only one chart, then you do not need to change anything in the field.
Next comes RefreshWindowOnAskPriceChange.
This field means how the price will be updated based on the ask, if set to true, or based on the bid. After finishing work with the settings, click OK:
Information on the values that we set earlier appears above:
Next, click "File" - "Open Offline":
Find GBP / USD, M2 time frame:
Double-click on it with the mouse and open the chart:
It is initially displayed in bars. As for the usual chart, change to candles:
All the functions that are available for a regular chart are also available for RangeBars charts.
On the chart, we can see that each candle is 10 points:
Thanks to the chart, you can immediately see a clear trend down. Although on a regular chart it would look like this:
Unlike a simple chart on RangeBars, it's much easier to recognize a trend. I remind you that on such charts you can set various indicators, including custom ones.
In general, this is a different view of the market. This is not the holy grail that always gives the perfect picture. But for many, such charts can be much more convenient than the standard ones in Metatrader 4.
That's all. See you soon!
Indicator settings for building Range Bars:
Pipipange - the size of each candle in points
OfflineTimeFrame - timeframe for building a Range Bar chart. Because Since the time in the range bars is not used, this setting is needed only in order to be able to open several Range Bars charts for one currency pair (see the video for the installation process).
RefreshChartOnAskPriceChange - if you enable this parameter (true), the price on the chart will be updated when the Ask price changes, by default the price changes along with the Bid price.
RenderUsing1MhistoryBars - the number of minute bars that will be used to create the Range Bar chart. If set to 0, all available minute bars will be used.
UseSoundSignalOnNewBar - on / off the sound signal when a new bar / candle appears.
DisableComment - on / off the comment in the upper right corner of the chart with the Range Bar indicator set.
Note: Please note that when creating a Range Bars chart, the script emulates the price movement from minute charts, and in real time the chart is built from ticks. Therefore, the most correct Range Bars chart can be obtained only by starting it and not turning it off so that new bars are formed from ticks in real time.