[Tradewinds]

Originally Posted by bomberone1 »

Tradewinds thanks for your replay,
when do we intrabar don't we get the same results?
Could you explain more please?

The typical thing that everyone does, is look at the chart, then make a trading decision. I use a trading ladder, and found that I often do well paying attention to what the price is doing on the trading ladder. On the trading ladder, there is no aggregation period, and there is no time frame, there is just price doing what it does. So in a sense, the pure price action is not being fit into some kind of artificial constraint. Those artificial constraints are either a block of time, a block of volume, or some other measurement. The price data is being aggregated into blocks of data. Each bar on a chart is data constrained to some "container". And even though grouping sections of trades into blocks of data can be helpful, it also can be misleading.

I often had difficulty reconciling pure price action, (with no framework or boundaries) to the way I perceived price data behavior on a chart. I've come to believe that my perception of what price is really doing is being unduly biased by how I perceive the price bars. For example, a long red candle with a close down. It's red, the close is down, so I think in terms of price going down. But price could have been going up at the end of the bar. In fact, price could have already turned up and be starting an uptrend on that long red bar. If the bar has a tail at the bottom, then the close was off the bottom. The price was actually going UP at the end of that bar. I'm thinking DOWN, but at the end of the bar the price is going UP.

On the price ladder, there is no reference to the last high or low; there is no context to past price behavior. The bar on the chart is red, but on the price ladder, you see that the price is going up. Of course, you can see that on the candlestick also, but the red color and the close down may bias your perception of what the price behavior really is.

Some people prefer a 1 tick chart in order to avoid these artificial constraints put on the data that may bias your perception. I have no interest in a 1 tick chart, but I can understand why someone would want to see price in it's "purest" form.

I don't want a 1 tick chart, but I want to somehow try to counterbalance this possible undo bias to my perception. I also do not want to trade solely on price action. So I want to keep my charts, just understand them better.

So at some point I realized that all kinds of things could be going on intrabar that I am not really consciously processing. So there was a huge hole in my understanding of price behavior. Price bars focus on the OHLC. Open, high, low and close. But those 4 data points only represent a very small section of the data. So in effect, I could be basing my decisions on just a small subset of data, and ignoring everything else. This doesn't make any sense to me. I want a more complete understanding of what is really going on.

I could go to smaller and smaller aggregation periods, but that would mean more and more charts and more and more screens to monitor.

Hopefully this explains my interest in intrabar behavior, and my efforts to come up with ways to process intrabar data.