Hi. No problems this time. Just had a question for TS Support or really anyone who knows...
MCFX is the first software I've seen that provides an alternative to charts that generate candles according to the passage of time. They call this (count or) price compression, and, in what I believe to be it's superior form, it uses price movement to generate new candles or bars (ex. 10 point, 20 point, etc...).
Did TS Support INVENT price compression? I ask this because I never even heard of it before becoming an MCFX subscriber. It has proven invaluable to my analysis and is an amazing feature that should by all means be retained in future versions.
Just curious. Thanks for the help.
Question about data compression methods
Price compression or tick bars or what ever you'd like to call them have been around for ages in "future" land. It's just seems that MCFX is one of the first FX only charting packages that provides it. I personally haven't used them much. I'd be curious to hear from you as to how useful you find them, if you don't mind my asking.
Oh, well that's interesting. I'm assuming price compression is pretty widely used by futures traders? I'm really wondering why such a brilliant idea hasn't caught on with the rest of the trading world, esp. stock charting.Price compression or tick bars or what ever you'd like to call them have been around for ages in "future" land. It's just seems that MCFX is one of the first FX only charting packages that provides it. I personally haven't used them much. I'd be curious to hear from you as to how useful you find them, if you don't mind my asking.
In my opinion PC makes all the difference in the world. If you lay a price compressed and a time compressed chart side by side you'll see that price compression looks cleaner, less confusing, and the movement just looks better organized.
The reason for this is that time is totally irrelevant to price movement in the markets. The psych mechanism that creates the trending behavior in markets uses vertical length of reactionary events to build trends. In other words, trends structure themselves according to the length of retracing movements within the trend. There is also a counting scheme that comes into play but that's too much detail for this explanation.
Price compression is great because the criteria it uses for candle generation syncs perfectly with the criteria that the market uses to construct trends. The result is that you get candles that mean something (pricewise), candles that correlate to price movement - which always has internal significance.
With a time compressed chart candles are generated even when price is stagnet or just moving sideways. These candles tend to clutter the chart with virtually meaningless data and distort the visual picture. What is important is the relative size of reactionary events.
The varying candle sizes in time compressed charts also distort this picture. In a PC chart all the candles are the same size (except for the ones next to session breaks - but ideally these should also be the same size. They should be integrated with neighboring candles so as not to create unecessary spacing which distorts the dichotomy (horizontal event spacing) of an event (TSSUPPORT please TAKE NOTE). All candles should be full size according to the point criteria of the chart. Dichotomy is important because events with greater dichotomy are more likely to be relevant at higher scales.
In short, the structures and counting patterns I use in my analysis are much easier to see in a price compressed chart. That's why I'm a convert, and I believe more people would be if they were aware of the many advantages...
Hey aussieFX, thanks for the knowledge man, I appreciate it!
I realize the above may sound confusing... thought I'd add a graphic to illustrate what I mean. 
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Well it's good to know that my argument had some effect.No problems Terminal. I often thought if anyone used tick (or price compression) charts in FX. You're the second person I know of. I think I'll have to have a good look at them now
If you or anyone else would like some more info on the structures and counting schemes mentioned above my site offers a FREE tutorial download (Note to moderator: I don't sell anything other than the tutorial from the site so this is NOT an attempt to profit from or exploit MCFX users - only a friendly gesture encouraging folks to take up the study of price movement). Just go to the site (EWTalternative.com) and click on the "FREE copy" button at the bottom...
...type in the following for username and password:
usr name: u56
password: seven
The tutorial uses Index movement (mainly the Dow) in it's examples but the things taught apply to all markets including Forex.
Maybe it'll give you some new ideas.
Not to question your above statement but I was recently talking with a old trading friend in England about our discussion here on the origin of price compression and he said the following:Price compression or tick bars or what ever you'd like to call them have been around for ages in "future" land.
Perhaps PC began in the futures market but is simply seldom used, or its use has waned over the years...I am surprised by his statement as I look at futures charts every day and quite frankly, have seen no evidence that price compression charts are used at all. Look for yourself on futuresource.com/charts/ and you will see the normal time compression charts with candles or bars all over the place.
That's cool. Like many other things in trading some have seen things / used things and some haven't. For example, in futures I have used tic (price) charts, (proper) gann swing charts. You can even have volume based bar charts, but I've never used them. But you are correct in your assumptions because a) not many people actually use them, b) only a few charting packaged actually have them (none of the online ones have them as far as I know) and c) yes, their use has probably waned, or better still, never really became mainstream.
As they say, you learn something new every day. I'm sure your friend has seen or used plenty of things I know nothing about. That's why I like talking to other traders
As they say, you learn something new every day. I'm sure your friend has seen or used plenty of things I know nothing about. That's why I like talking to other traders