Chart Range US

RangeUS is a special chart that filters out market noise, and candlesticks are built based on the distance traveled. This type of chart is not dependent on time or volume.

Here is an example of a RangeUS chart for the CL futures:

Principle of RangeUS candle construction:

The RangeUS chart consists of two types of candles:

1. Trend candles

2. Reversal candles

Three parameters are used for their construction:

1. Open Offset - a shift from the beginning of the session, from which the drawing of the first candlestick starts. The use of this parameter affects the chart as a whole, since it shifts rigid boundaries.

2. Tick Trend - is the distance at which a trend candle will be formed and closed. The distance is counted up or down.

3. Tick Reversal -  is the distance at which the reversal candle will be formed and closed. A mandatory condition for closing is that the price must move in the opposite direction of the previous candle.

The figure below (Fig.1) shows an example of building RangeUS with the following parameters: Tick Trend - 10 and Tick Reversal - 5, for futures 6E.

Fig.1:

A trend candle measuring 10 price points is located between markers 1 and 2 in the figure. At point 1, an opening occurred, at point 2 - closing. Short candles with shadows are Tick Reversal, i.e. reversal candles.

On the charts of RangeUS (as well as on the classic Japanese candlestick charts) candles may have shadows, but they are always directed against the candle itself. In other words, the shadow on a descending red candle can only occur at the top, while on an ascending green one, it can only be at the bottom, and no other way around. This rule applies only to formed candles. If the closing has not happened yet, the shadows can be in any direction.

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Fig 2:

In the figure above (Fig. 2), there is a reversal candle between markers 1 and 2, with a size of 5 ticks. The opening occurred at point 2, and the closing at point 1, but the price moved until point 3, which resulted in the formation of a long shadow.

A reversal candle formed as a rising one. This means that the price has passed 5 ticks in the opposite direction from the closing of the previous trend candle. Despite the fact that the candle in this example has a long shadow at the bottom, the price did not overcome the 10-tick mark and returned higher. Reversal candles are formed according to this principle.

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Fig.3:

If a trend candle has already been formed, and the price continues moving for 10 ticks in the same direction, then the next trend candle is formed (as in the figure above (Fig.3)).

With certain settings that are individual for different instruments, the RangeUS chart will hide unnecessary market noise and show important support and resistance levels.