hello traders its a samurai trade here Oh I'm putting together this short video
for the many questions that I have from from potential clients and students and
other traders that find me on YouTube asking questions about the different
types of charts that they'll see me trade at different times they may see me
trade vote using volume charts tick charts range etc why do I use
candlesticks so I thought well I'll just put together a quick video for you to
see and perhaps for me to cover some of these answers for you if you haven't
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along not leave enough of this let's have a look at this here if you're not
already full screen bottom right hand corner and you'll be able to expand this
as well so first of all of course we've got bar charts and I still deal with
some of the old-school traders excuse me guys you know who you are
that still swear by bar charts and a bar chart and exactly the same as a
candlestick chart they give you a lot of information what your closing price is
your in price etc and people like L Brooks
who is a very very big price action trader he won't even consider anything
else and man mind you he's great the fantastic books etc puts out but I
prefer candlesticks I believe the candlesticks are a lot more visual and
after a period of time you get to in a blink of an eye once again you've got a
good idea of what the market is doing it gives you exactly the same information I
just think they're more or much better visually so by the way if I'm going too
quickly please feel free to stop this video if you want to have a look or read
any more of this information I just don't want to make this video too long
for you so there are many ways to read the market and I mainly use japanese
candles as I mentioned we can use time-based charts number of transactions
we use and you'll see me use volume ticks volume and range I rarely use time when
I'm trading I'll always have a anchor chart open about three times higher some
say that the anchor chart must be time I don't personally see the difference okay
so once again I love tick volume and price so with time based charts if
you're a day trader it's very relevant of course if you're trading Forex you
may be trading for Ali 12 and daily and you'll usually use time-based charts and
and candles it gives you a lot of information
the disadvantage of course it can be what I call very very choppy and when
you're trading for hours a lot can happen with four hours in a four hour
period or even in five minutes that's why I like some of the other timeframes
that we're going to have a look at now a tick chart which is probably my favorite
counts down the number of predetermined transaction before forming and you
handle and you can see just over here we've got a nice little double top you
can do these with time based chance but I think tick charts just make them a lot
smoother as far as reading a market now of course they can be very volatile as
well I can move very very quickly now the type of trading that I do if the
markets moving too quickly I'll usually sit it out anyway because that's where
we're going to have slippage and it's a lot harder for my style of trading what
I believe I'm just not quick enough on some of
those then you've got volume charts like you'll see me trade the NQ on volume
you'll see me trade the the euro stoxx 50 the FESX on volume as well and I
just think it gives a very and we're going to have a look at some live
examples of that in a moment I just think there are much better chart then
you've got range range forms a new candle every time a predetermined number
of points or pips have been exceeded now let me just explain something here
points or pips now pips of course we're relating to Forex now we have three
different things here we've got ticks points or pips now if you take the ES
which is $50 a point it moves in 0.25 increments which is a tick which is
$12.54 so where I talked about or where a
trader talks about the markets ticked up its moved in an increment now if we go
and take the NQ it's $20 a point in this four ticks to a point on the NQ the Dow
the YM only has a point it moves in $5 points there are no increments in
between so it's just at a point so hopefully I haven't
confuse you but I've just had that come through a number of times and we're
pips coming to pips is a four is the minimum movement that you have on Forex
so hopefully I explained that okay just something I wanted to throw in there you
know the advantages they were range charts remove the noise in markets and
highlights congestion in the market which is where we want to be very
cautious when we see on a range chart three or four candles horizontally or
side by side in a narrow range you want to be very very cautious there we're
looking for our breakout now we can see even you've got four candles here but
you've got a lot of information because there are our other indicators that we
would be using here we've got a nice little double top etc which I don't want
to go into right now now there is something I do want to quickly talk
about also is Renko charts I've done a huge amount of work on Renko charts and
some some very extensive research reports using Renko and automated
strategies particularly trading double tops double bottoms and ranges using
Renko now Renko really smooths the look but you also can lose a lot of
information on a Renko chart and that's literally what a Renko chart can look
like and you can trade all different types of timeframes once again using
Renko now what I did want to show you here is the a 5 pip renko here on the
euro yen against the five-minute time based chart of the same time period and
you can see here in time okay for an example could our trend lines there and
can over here so you can see here and you can see the five minutes there and
look how smooth it is with the Renko so it really gives you a very clean shot
however you lose a lot of information as well if
there are there are some good benefits in in trading Renko however I don't
trade them for day trading summit that we're doing with managed accounts we're
going to be using rent codes in our automated strategies but I don't use
Renko charts for my day trading now what I do want to do now let's just go across
to a chart and let's have a look at this now a couple things I want to go through
which comes up constantly now let me just sum now I know for new traders
you'll be looking at this chart and there's a lot of things on their wall is
it looks like it but once you understand the relationship to each one of them
you'll understand why we have them on there now
the thing here this is a 55 sorry this is a g-wiz I've got the wrong market
here let me just uh copy this is what I want to show you that was by the way
that was the euro dollar the 89 tick chart on there but what I do want to
show here let's get the right chart here is he NQ 55 ticks now I trade during
market hours I trade the 133 tick now if I go across now this is in TradeStation
my charting package you can see here and this is virtually a virtually every
trading package is numerous options that you have line breaks point and figure
range Renko tick volume and you can adjust all of these now what you can see
here I've got it set to a 55 tick 5,000 candles back and during the day this is
what I trade I use the tick chart where the volume is much lower now where I am
recording this today in Australia it's 1:42 pm. on a Friday afternoon and so
far for the turnover I'm just going to tell you we've turned over here 13,000
contracts since the market is reopened so where
traditionally you can turn over 120 to 250 thousand contracts during the main
New York hours so we've been open now for what's at about five hours now the
mark is four or five hours now and we've only turned over 13,000 contracts so we
have much lower volume so if I was to apply and change this so we can see here
this is going back this year this whole chart goes from the market reopen here
at 8:00 am. my time right up until
right now which is 143 you can see we've if I was live trading right now there's
been some great trading opportunities and there's quite a few candles now if I
was to drop that time frame down so here to sorry increase that I should say to
133 tick will be able to squeeze it all on a window there's the whole day's
action as you can see there so I'll drop it down depending on the time now for
133 tick can move very very quickly as well during market hours so you might
want to increase that to a 233 or a 550 like I'll quite often use on the euro
stoxx 50 now the Euro stoxx 50 the FESX is the symbol in TradeStation you get
a very similar amount of contracts trade on that market compared to say the ES so
you get some great volume you couldn't will say quitting just makes it a lot
harder trading a 133 to a 233 I think the 550 tick or share bar or volume is
much better on that particular market now let me now change this to time so
let's have a look we'll change it to by the minute and let's make it a 3 minute
and here of course you can put in how much time on to go back let's just go
back two weeks and it comes up okay so we can see here that on time we can see
where the market opened very very quickly on the three minute candles and
since then see what a fairly narrow trading range now to me that's nowhere
near as attractive to trade as in comparison two a chip two a tick chart now
another option I have is trading volume now because we've got very low volume
we've only as I mentioned turned over about 13,000 contracts now just on that
point one thing that I find really interesting the YM the Dow turns over
during New York hours probably generally I would say just off the top of my head
probably 30% 40% lower number of contracts compared to the NQ but during
the after-hours market there's a lot of traders come home and trade the doubt
they're almost identical so so far today we've turned over on the doubt twelve
thousand eight twenty two compared to just over 13 thousand I find that
interesting now let's just go and have a look at a volume now here let me just
put on a hundred volume that's for contract so for every 100 contracts our
trades we get a new candle form and you can see here that we've gone up we're in
a fairly tight range you've gone up we had the pivot bounce off here we formed
a double top we've gone up and tested it we've had a pivot bounce down here etc
so you have lots of options now one of the emails that I had today was about
range and sorry about ticks so should say so you can see there that's where you
adjust your tick just in that little box there you know if you only had one tick
that is February contract all right let's just have a look let's just put in
in here and see if we see what happens here from
I have a lot more candles come in and you can see the amount of candles and it
makes it very very hard to trade okay it is tradable but if we go back there you
can see how many candles we have formed there remembering we have got a lot of
our great setups here but you also got another problem and that's the amount of
volume so to get your fills of course so getting back to this what else did I
want to cover okay so during the after-hours market if
you're trading the YM which the dow or the NQ on both of those I recommend a 55
ticks chart during the live market hours or of course it's all live but during
the New York hours on the YM I'll still keep it I'll increase it to about an 89
tick now one thing I do want to show you is this the ES now so far the ES the e
Mini's which of course has the largest turnover of the US. futures contracts
so far today we've turned over one hundred and one thousand contracts now
this is the 144 tick now I like to trade either volume or 550
when New York was open but here I like you can see here where the markets
open I really like the 144 tick now you can see there we had a beautiful t2
we had another t2 your entry was there and you can see you get some
really good movement so if you were trading today or say you got home from
work in New York or or LA or over in Europe well of course it's very pretty
early there but you still get some great and you'll find this great movement
you'll see this virtually every day get some some great movement on the 144 of
course we haven't seen a higher volume at the moment because of what's
happening in Greece at the moment but look at all of these here now remember
we're waiting for price action under our 34 so we're going to try a trade
opportunity here we had another rush
opportunity there we've got a nice little t10 there etc we've got a nice
pivot bounce etc so my preference getting back is tick and volume charts
time I don't like today trade on time chart so I think we miss out on too many
good trading opportunities so traders hopefully this short video gives you
some more fills in some of the gaps that you may be missing thank you