Tools to help you measure price and time ranges
Not surprisingly, we get quite a few “how do I…?” questions here at Optuma Towers and we try to update the KnowledgeBase and create free videos to help clients find what they need, but this particular query has come up a few times this week, which I thought I’d share here.
The question was along the lines of “what’s the best way to count time and price movements on the charts?” Like many things in Optuma, there can be a number of different ways to achieve this, so here are some examples of some of the tools that we have available, which can be particularly useful in presentations or reports.
This tool can be used to count the distance in time between two user-defined points (KnowledgeBase article). The options can be set to bars (trading days on a daily chart), calendar days, weeks, etc. In this example the high to low took 57 trading days, whereas the subsequent low-to-low was 57 calendar days. Repeating the values can help identify potential cycles, which can then be applied to the cycles tools
This tool can be used to count price change between two user-defined points (KnowledgeBase article). The tool can be set to show the percentage change, price change, or both. Like the Time Measure tool, the Repeat property can be used to identify potential support or resistance levels.
In this example, the initial move of 507 points – or 10.8% – is repeated, but set with an expansion value of 1.382, or 701 points:
Time Price Measure
As the name suggests, this is a combination of the two tools, which measures the time and price between two points (KnowledgeBase article). The tool includes a number of labels which can be turned on or off including the dates and prices, with the added flexibility to create your own label. In this example, I’ve added (P1+P2)/2 to show the midpoint of the range:
Time Price Labels
The previous tools all measure between two points, but what if you wanted to measure more than that? You could apply the tools multiple times, or you could use the TPL tool (KnowledgeBase article, including video). This allows you to apply an anchor label, and then by selecting the Add New Label option under the tool’s Actions you can add multiple labels, each one counting from the previous.
Note: when applying three or more labels the tool can calculate retracement measures of the previous label range.
In this example, the initial move down took 16 trading days (22 calendar days), and then 19 trading days to recover just over 100% of that range. Label 4 tells us the percentage fall (7.3%) or 112% of the previous range in 34 calendar days.
Note: when using daily charts don’t forget that it’s possible to display the chart in calendar days instead of trading days. When enabled, the ‘Bars’ count will be the same as the ‘Calendar Days’ count in the time measure tools.
Range From Extremes
The last tool I’ll mention is the Range From Extremes (KnowledgeBase article) which is a slightly different tool from the others, but equally useful. This tool will automatically calculate the price move from the highest high or lowest low over a user-defined period. As such, it does not require you to manually place the tool on the chart as it will automatically calculate the range from the high / low extremes to most recent closing price. This range can be expressed in either percentage, standard deviations, or Average True Range values.
Here we see the RFE tool set to 6 months for Bitcoin, indicating a 46.8% drop from its 6 month high, and 13.3% above its 6 month low:
Because the Range From Extremes is a tool that is automatically calculated, it can be used in watchlists using the RFE() function. Add RFE() to the scripting window and click on it to select the lookback period, high/low, and measurement. In the above example the % from 6M High column is calculated using the following:
RFE(BACKTYPE=Months, BARS=6, DEFAULT=High)
The low column:
RFE(DEFAULT=Low, BACKTYPE=Months, BARS=6)
These are just a few examples of some of the tools we have to help with analysis – and don’t forget that with the scripting language you can create your own tools, such as the 50% level of the all time high. If there are any other types of tools that you would like to learn about, let us know.
Darren Hawkins, MSTA
Senior Software Specialist at Optuma
Darren is the senior Software Specialist at Optuma. He joined the company in 2009 after attending an introductory technical analysis course. Darren now instructs users all over the world, from experienced Wall Street traders and professional money managers to individual traders drawing their first trendlines.
Darren grew up in the UK and attended college in the USA where he earned a BA in Economics from St Mary's College of Maryland. He went on to spend a few years working at the Nasdaq Stock Market in Washington DC. Going on to live and work in Australia, the US and currently the UK, Darren has a broad understanding of the individual needs of traders, portfolio managers and investors utilising a wide range of methodologies.
In 2014 Darren passed the UK-based Society of Technical Analysts diploma course, and is in the process of studying for Level 3 of the CMT Program.
When not looking at charts, Darren keeps a keen eye on England's cricket team - especially if they are playing against Australia. He lives in the Essex countryside in England, with wife Wendy and their labrador, Gabba.