Here is an example of a 9 pip range bar chart. Notice how clean the swings are. Each bar is 9 pips. New bars are printed as the range of the 9 pip bar is broken. I just chose 9 pips arbitrarily but was pleasantly surprised when I saw the result. Perhaps on the another forex pair, a different range would be better. Think about time charts for a moment. A 5 minute chart might work great on the EURUSD as we can see, but perhaps on another pair, a different time frame would be better. Maybe the EURJPY would trade better with a 7 minute chart, for example. We would be out of luck because we don’t have that option available to us with MT4. With our new Range Bar Plug-in, we DO have the option to find the best Ranges to trade though.
Now here’s a look at the same window of time with a 5 minute bar.
5 Minute Chart Example
Notice how much ‘wilder’ this chart looks. Granted, these 5 minute bars did give us some great trades too. The Seven Summits Trader Forex is great at working with the chart you put it on. This particular window of time produced great trades no matter which chart you decided to use today. In fact, the 5 minute bar has been a steady performer for us with the EURUSD. But as I alluded to with the EURJPY example above, that’s not always the case nor is it the point. Range Bars give us a whole new world of opportunities, allowing us to find profitable charts that we can better tailor to meet our own personal needs. Now we can take advantage of the moves that occur in the market WHEN they happen. A 5 minute bar might at times have what would be a nice tradeable move, except that it’s all contained within one bar and thus, completely untradeable. The Range Bar would catch such moves.
Contrast how much cleaner the swings were on the Range Bar chart to the 5 minute chart. There’s certainly a place for both types of charts but now, with Range Bars, we have so many more tradeable opportunities with MT4 using the Seven Summits Trader Forex, and THAT is a great thing. And Renko too! Renko can show you some of the cleanest swinging charts there are.
Most people think of Forex trading with the MT4 platform being limited to the time based charts that MT4 provides. Mainly 5 minute, 15 minute, hourly, etc. They’re not bad by any stretch of the imagination and Seven Summits Trader Forex (SST FX) responds superbly to time based charts. But they are somewhat limiting and with MT4, you really don’t have very many choices to choose from.
Now though, with the plug-in filter that we’ve made available, you can now apply the Seven Summits Trader Forex to pure price action charts — Range Bars! Range bars have distinct advantages in that they are dynamic to the actual price action that is flowing through the market. Unlike a time based chart, like a 5 minute chart for example, where each bar MUST close after every 5 minutes regardless of order flow, Range Bars open and close as a result of the price ‘breaking out’ to a new range. It is dynamically dependent on price action itself, and not the artificially imposed ‘rule’ of time. Artificially imposing some sort of time rule, like, the bar must close after every 5 minutes no matter what, often results in very large bars with lots of trading going on inside of it, or very small bars with little to no trading. It has nothing to do with the buying and selling that is taking place in the market. It is only dependent on time itself. But the market couldn’t care less about time. See the limitation?
Range Bars print as the price is moving beyond a designated range. We have found many different ranges to be quite effective. A 6 pip range works great. Even a 20 pip range produces some great trades, although they do create larger trade profiles and can often take longer to develop. We can look at the activity taking place in a particular market and decide what range gives us the best swinging action within the window of time that we want to trade. Regardless, they’re all based on ‘pure price action,’ as is the Seven Summits Trader Forex.
It’s true that the Seven Summits Trader Forex can produce some dynamite trades with time based charts and I would certainly NOT want you to abandon them. BUT, dynamic Range Bars have a unique look and feel that many of you are going to get hooked on once you learn how to use them and how to apply them within the Seven Summits Trader Forex framework. You’ll soon learn how to uncover new profitable trade opportunities that most traders would have no idea even exist at all. That’s what I love about them. Rather than follow the herd and be like everyone else, Range and Renko give you the option of blazing new trails and profiting in ways that will set you apart and keep you a step ahead of the competition. And for that, It’s well worth the effort learning how to work with Range and Renko charts with the Seven Summits Trader Forex.