What is a Range Interval and How Do I Choose It?
Range bars enable traders to analyze price movements of financial assets while minimizing market noise. Unlike time-based charts, range bars do not factor in time, which helps create a clearer view of price action known as the 'clean chart effect.' A new range bar is generated each time the price reaches a specific value set by the user.
How Are Range Bars Created?
Each Range bar begins with an opening price (Open). As the price moves, the bar's size increases from this point, either upward or downward.
The price movement within the bar is determined by the difference between its highest (High) and lowest (Low) points.• The bar is completed once the High-Low range equals the selected Range interval.
If the price stays within the [Low, High] range, the bar's closing price (Close) updates accordingly.
When the price moves beyond the [Low, High] range, the current bar closes, and a new bar begins to form.
How can I choose Range bars on the chart?
There are two methods:
Choose Range bars from the chart type menu located in the top panel.
Choose the desired range interval from the interval menu located on the top panel.
The Range interval defines the price movement span that triggers the creation of a new bar. Essentially, one Range corresponds to the smallest possible price change, known as the Tick Size. This relationship can be expressed with the following formula:
1 Range = Tick Size
You can find the Tick Size values in the Symbol Info menu (by right-clicking on the chart series and selecting Symbol Info…).
It's important to note that the Range bars are unaffected by time parameters. When you select the Range chart type, the chart will automatically switch to a default Range interval or retain the last used Range interval.
What options are available for Range charts?
Range charts come in two main styles: Bars and Candles. Here, we'll focus on the properties specific to Bars Range charts:
Up bars — define the color for the upward movement bars.
Down bars — define the color for the downward movement bars.
Projection up bars — specify the color of the projected upward bars.
Projection down bars — specify the color of the projected downward bars.
Projection bars — bars generated based on data from a temporary, still-forming bar.
Thin bars — ensure bars are always displayed with a thin width (preventing them from appearing bold when zoomed in).
Phantom bars — control the display of virtual bars.
Phantom bars — bars that are constructed within price ranges where no trading occurred.
Last — configure the display of the line indicating the most recent price.
Previous day close — configure the display of the line showing the previous trading day's closing price.
The settings for the Candles Range chart are as follows:
Body — define the color of the candle body for both upward and downward candles.
Borders — specify the color of the borders around up and down candles.
Wick — select the color of the wicks for up and down candles.
Projection candles — choose the color for the projection candles in both upward and downward directions.
Features and Limitations of Range Bars
• Range bars are generated from data points based on 1-second interval bars, which include Open, [High, Low], and Close prices.
• Custom time intervals, beyond the standard predefined options, are available only to users with a paid subscription plan, such as Pro Plus or higher.
• To publish ideas using Range bars, the interval must encompass more than 10 Range units.
• The Bar Replay feature is not compatible with Range bars.
What do Renko wicks indicate?
On a Renko chart, wicks represent significant price movements within a single Renko brick, if such movements occurred.
A new Renko brick is formed based on a specific Box Size, which can be set directly (Traditional method) or indirectly (ATR method). The criteria for creating a new brick depend on the direction of the last brick: to continue in the same direction, the price must move at least one Box Size in that direction. To reverse and form a brick in the opposite direction, the price must move at least two Box Sizes—first reaching the level of the previous brick’s open, and then moving beyond it by one Box Size.
Occasionally, the price may move more than one Box Size but less than two in the opposite direction of the last brick. This indicates a notable price swing that didn't fully reverse the trend. These movements are marked on the Renko chart with wicks. Consequently, high wicks will only appear on bricks moving downward, and low wicks on bricks moving upward.
Wicks are enabled by default on Renko charts. You can customize their color or toggle their visibility within the Symbol tab of the Chart settings dialog.
Renko wicks derive their data from the actual prices displayed on the standard, non-Renko chart, whereas the Open and Close values of Renko bricks are synthetic and always divisible by the chart's Box Size. The origin of these wick values depends on the overall chart settings (also detailed in the Chart settings): if the Renko chart is constructed using only Close prices, the wicks will reflect the highest and lowest Close prices; if OHLC data is selected, the wicks will correspond to the highest High and lowest Low prices respectively.
Let's consider a specific example:
In the screenshot above, we see a Renko chart of AAPL at a 1-day timeframe. The source is set to OHLC, with a box size of 3. There is a sequence of two downward-moving bricks, with the second one formed on April 11, 2022. The following brick also points downward and was created on April 18, 2022, featuring a high wick of 171.27.
Below that, the chart displays the same symbol and timeframe but in a traditional candlestick format. We examine which candles contributed to the formation of the April 18 brick. Since the previous brick was formed on April 11, the candles from that date up to and including April 18 are used to build the next brick.
In this scenario, before the price dropped to 165—where a new down brick could form—it first rose to 171.21. This was above the open of the previous brick (171), but not enough to change the overall direction of the Renko chart to upward. After reaching that level, the price declined, leading to the formation of another downward brick. The upward swing is indicated by a high wick on the resulting Renko brick.
