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MBars
Here is a new one for you that I would find of interest. A price study called Mbars!! The explanation below comes from a February 2003 article in SFO magazine by Desmond MacRae. Can this one be done for us? Renko bars are similar but not the same.
“They look like standard bars, but are different in three ways. One is that they are always equal in height. This is because they are based on specific price ranges selected by their users. If, for example, the price range chosen is six ticks, which in the S&P 500 E-mini futures contract equals $75, all of the bars represent a price value of $75.
The second difference is that the open of a new bar is always one price tick above or below the close of the previous bar. This is because a new bar does not begin until the old bar has been completed, which can only occur when a price tick exceeds the range set by the trader using them. While opens can appear anywhere on MBars, closes are always at the tops or the bottoms of these bars.
The third difference is that MBar charts have no gaps. Say, for example, the MBar value for the S&P500 E-mini is set at six ticks ($75). Say, too, that there is a sudden event that causes this contract to gap up 12 points from 910 to 922. This 12-point gap has a total of 36 ticks (each point equaling $50 is composed of four $12.50 ticks).
On a six-tick ($75) MBar chart, this 12-point gap would be filled with seven six-tick “phantom” up-bars. The sequence is as follows: 910 to 911.50 is the first bar; the second bar opens at 911.75 and closes at 913.25; the third bar opens at 913.50, closing at 915. The fourth is 915.25 to 916.75; fifth is 917 to 918.50; sixth is 918.75 to 920.25; seventh is 920.50 to 922. If this contract were to gap down 12 points from 910 to 898, the sequence for six-tick (1.5 point) MBars would be the same, but in descending order.”
“They look like standard bars, but are different in three ways. One is that they are always equal in height. This is because they are based on specific price ranges selected by their users. If, for example, the price range chosen is six ticks, which in the S&P 500 E-mini futures contract equals $75, all of the bars represent a price value of $75.
The second difference is that the open of a new bar is always one price tick above or below the close of the previous bar. This is because a new bar does not begin until the old bar has been completed, which can only occur when a price tick exceeds the range set by the trader using them. While opens can appear anywhere on MBars, closes are always at the tops or the bottoms of these bars.
The third difference is that MBar charts have no gaps. Say, for example, the MBar value for the S&P500 E-mini is set at six ticks ($75). Say, too, that there is a sudden event that causes this contract to gap up 12 points from 910 to 922. This 12-point gap has a total of 36 ticks (each point equaling $50 is composed of four $12.50 ticks).
On a six-tick ($75) MBar chart, this 12-point gap would be filled with seven six-tick “phantom” up-bars. The sequence is as follows: 910 to 911.50 is the first bar; the second bar opens at 911.75 and closes at 913.25; the third bar opens at 913.50, closing at 915. The fourth is 915.25 to 916.75; fifth is 917 to 918.50; sixth is 918.75 to 920.25; seventh is 920.50 to 922. If this contract were to gap down 12 points from 910 to 898, the sequence for six-tick (1.5 point) MBars would be the same, but in descending order.”