Discussion of article "Liquid Chart"
In my opinion, all this is far-fetched. The given results of optimisation tell us nothing, because optimisation is just fitting. It is clear that by increasing the number of passes several times by adding new parameters, we a priori increase the accuracy of this fitting. We have to see how it behaves on the forward.
And fundamentally it is not very clear why it should work. Well, to be more precise, I see logic only in one case, which you mentioned at the very beginning, when we take shifts in 1 hour increments to find the most "correct" time zone (for H4 or D1 bars). But digging inside hour bars.... I don't know if there is any logic in it.
Well it makes sense if you assume that most of the volumes are at the beginning and end of the bar. For example, news is usually released in a rather round time.
And also such a chart should be good for generating history for tests.
Hee :-) It would be harder to breed rabbits that way
After reading B. Williams' books, I also paid attention to the fact that a reversal bar can be detected by moving to a smaller timeframe and combining several of them.
But of course I had no statistical data on the profitability of such approaches.
Now I will try to improve the work of my Expert Advisor by dividing the 4-hour period into hourly periods and applying dynamic shift for more timely entry and exit.
Thanks to the author for his useful work.
Very useful article, especially for people who use candlestick analysis in trading, it is irreplaceable.
That's pretty cool.
Kudos to the author of the idea!
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New article Liquid Chart has been published:
Would you like to see an hourly chart with bars opening from the second and the fifth minute of the hour? What does a redrawn chart look like when the opening time of bars is changing every minute? What advantages does trading on such charts have? You will find answers to these questions in this article.
Once I noticed that charts with the H4 timeframe and higher looked different at every broker's. The reason behind it was that the brokers were located in different time zones. In some cases certain parts of the same charts were significantly different in spite of a small difference between time zones. On one chart there was a distinct reversal pattern and the same part of the other one did not represent any precise pattern.
Then it crossed my mind to write an indicator which would redraw the H1 chart so that there is always a complete closing bar on the right. The M1 period was chosen as a source of prices. As a result, an hourly chart was redrawn every minute and in an hour I had 60 varieties of the same hourly chart. Its form was changing in a smooth and flowing manner revealing hidden patterns that the initial pattern did not even have a hint on.
I called this indicator "liquid chart" for its specific appearance. Depending on the plotting mode, the chart "flows" (gets redrawn) either when a new bar of the basic period appears or when the value of static shift gets changed. In this article we shall consider the principles of plotting a "liquid chart", then write an indicator and compare efficiency of using this technology for Experts trading by indicators and Experts trading by patterns.
1. Plotting Principle
Before we start, we are going to define the terms.
Shift is a difference between opening prices of the resulting chart bars and the opening prices of the source chart bars.
Current timeframe is the timeframe of the source chart.
Basic timeframe is a timeframe with prices we are going to use for forming bars of the resulting chart.
Basic period cannot exceed the current one. Current period must be divided by the basic period without remainder. The greater the ratio of the current timeframe to the basic one, the more different variations of the resulting chart we can get. However, if the ratio is too large, then the historical data of the basic timeframe may not be sufficient for drawing necessary number of the resulting chart bars.
There are three types of plotting a chart.
In the static shift mode, opening times of the bars are shifted by the set time. Dynamic shift in the opening mode makes it look like a bar has just been opened and in the closing mode as if the bar will be closed soon.
Let us have a closer look.
Author: Serhii Shevchuk