Using Tick and Volume Charts for Future Day Traders 4.22.2016
Posted By:- Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Friday April 22, 2016
For 2016 I would like to wish all of you discipline and patience in your trading!
Why I like to use tick and volume charts for scalping
Today I decided to touch more on an educational feature rather than provide a certain market outlook.
Many of my clients and blog readers know that when it comes to short term trading I am a fan of using volume charts, tick charts, range bar charts and Renko charts rather than the traditional time charts like the 1 minutes, 5 minutes etc.
My rule of thumb is that if you as a trader make decisions based on charts that are less than 15 minutes time frame, it may be worth your time to research, back test and do some homework as to potentially using other type of charts like volume charts , Range charts etc.
Volume charts will draw a new bar once a user defined number of contracts traded. Example mini SP 10,000 volume chart will draw a new bar once 10,000 contracts traded.
Range bar charts will draw new charts once price action has exceeded a user pre define price or ticks range. Example might be an 18 ticks range bar chart on crude oil.
While the volume charts rely ONLY on volume, the range bar charts rely ONLY on price action.
Their main advantage over traditional time charts is twofold in my opinion:
1. If the market is moving fast, reports came out or there is heavy volume in the market, the traditional 5 minute chart will need 5 minutes to complete the next bar before it provides you with a signal…if you day traded futures before you will know what 5 minutes can do….The volume charts or range bar charts in this case will complete the bars MUCH faster because there is strong price action and strong volume and will be able to provide a signal faster than the time charts.
2. On the flip side, there are times when the market is dead…low volume, sideways, choppy action. If you are using the 3 minute chart and a moving avg. cross over, you may get a signal simple because time has passed and the moving averages crossed even though the market is pretty dead….If you are using a volume chart and the market is slow…it will take a while for the bars to complete and hence it may filter out some “noise” in the market.
Below is an example of range chart with mini Russell. If you like a free trial for our signals like the ones below or to discuss more in depth different charts and strategies, feel free to contact us!
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Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
|Contract June 2016||SP500||Nasdaq100||Dow Jones||Mini Russell||Dollar Index|
|Contract||June Gold||May Silver||June Crude Oil||June Bonds||June Euro|
|Resistance 3||1296.1||18.57||45.83||165 3/32||1.1517|
|Resistance 2||1284.2||18.14||45.16||164 14/32||1.1467|
|Resistance 1||1268.1||17.60||44.39||163 16/32||1.1387|
|Support 1||1240.1||16.64||42.95||161 29/32||1.1256|
|Support 2||1228.2||16.21||42.28||161 8/32||1.1206|
|Support 3||1212.1||15.67||41.51||160 10/32||1.1126|
|Contract||July Corn||July Wheat||July Beans||July SoyMeal||May Nat Gas|
|FriApr 22||3:00am||EUR||French Flash Manufacturing PMI||49.9||49.6|
|EUR||French Flash Services PMI||50.2||49.9|
|3:30am||EUR||German Flash Manufacturing PMI||51.0||50.7|
|EUR||German Flash Services PMI||55.1||55.1|
|4:00am||EUR||Flash Manufacturing PMI||51.8||51.6|
|EUR||Flash Services PMI||53.3||53.1|
|5:00am||EUR||Italian Retail Sales m/m||0.2%||0.0%|
|Day 1||EUR||ECOFIN Meetings|
|All Day||EUR||Eurogroup Meetings|
|9:45am||USD||Flash Manufacturing PMI||51.9||51.5|