The For-Exe R&D department (sounds a lot more impressive than it really is) has spent the last week testing and trading range bars - a most profitable week it was, mostly from scalping the DAX.
If you don't already know, range bars differ from normal price bars in that they only create a bar when price has moved X number of pips. Time is not a consideration, just price, giving rather clean looking charts without the 'noise'. It is purported that various indicators such as moving averages, RSI, Ichimoku, etc are more effective on range bars - something that our research seems to agree with. We also found that harmonic patterns are easier to spot and the drawing of supply/demand zones just a bit more objective.
We created a little indicator to generate buy/sell signals using the Alligator. The pictures below shows the signals generated over the same period. The potential profitability of the range bar signals is self-evident.
It should be noted that a couple of nice trending periods were selected for the above pictures - not all periods will be so easy to trade but all-in-all it's fair to say that trading range bars 'with the trend' should do you well. We will continue our research.
Snorm trades only with GKFX and has no hesitation in recommending them, for tight fixed spreads and quick execution (even during NFP, from personal experience).
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