The Bar Speed indicator shows you how quickly a bar on your non-time-based chart has developed. This is the equivalent of having a volume indicator on a time based chart. If you're using a volume based chart then the volume indicator is meaningless and you are missing out on this vital bit of information. A tick based chart proxies a volume based chart with an approximate 97% accuracy which implies that the volume indicator is also meaningless on a tick based chart.
To solve this problem we have developed an indicator called Bar Speed. This indicator tells you how long it has taken (in seconds) for the previous bar to develop. This indicator shows activity in the market and will allow you to see quiet and active periods at a glance and at the same time keep you up-to-date if you need split accurate timing to enter or exit a trade during heightened market activity.
In our example below we can see the Bar Speed indicator operating on an ES (E-mini S&P500) chart set to 3000V (3,000 contracts per bar) interval. The lime lines show where the bar took less than 30 seconds to develop, the cyan lines show where the bar took between 30 and 100 seconds to develop and where you see no lines the bars took more than 100 seconds to develop. These values can be changed and the bars can be inverted by adjusting the parameters (more below). The Bar Speed indicator lags the chart by 1 bar - this means that the speed you see below the bar refers to the bar that was created before it.
The Bar Speed indicator has 6 parameters. The chart above was created with the default parameter settings that you see here.
|CutOff||Maximum number of seconds to consider when doing calculations. Default is 100 seconds. If a bar takes more than 100 seconds to develop then the value is set to 100 otherwise the value is the number of seconds that the bar took to develop.|
|Invert||Set to true (default) shows activity as the largest bar and inactivity as the smallest bar. When invert is set to true the indicator's value is calculated as CutOff - Time Taken, otherwise the indicator's value is TimeTaken with a maximum value of CutOff.|
|BarColor||Standard color for the bar if it is not considered fast.|
|BarThick||Thickness of the bar.|
|FastSec||Number of seconds to consider this a fast bar. Default is 30 seconds. This means that if the bar completes from open to close in 30 seconds or less the bar will be considered fast and colored appropriately.|
|FastColor||Color if the bar is over the FastSec time.|
Tips and Tricks
- The Bar Speed value that you see below a bar refers to the number of seconds that were taken to create the prior bar. Remember that we can't calculate the time taken to complete a bar until the bar completes.
- You can load the indicator onto the same chart multiple times if you want multiple views of what you consider an active market is. Change the parameters of the indicators to set the different views.
All the indicators mentioned here are available to Premium Members.
Other indicators in this Pack/Series: