Time Based TradeFlow Charts
CQG 7.7 introduces Time Based TradeFlow Charts. This new charting style is similar to CQG’s TradeFlow™ charts, but this new version, as the name implies, is based on time. Please recall that TradeFlow charts are CQG’s innovative view of traders’ actions at the best bid and ask prices in the exchanges order book. The high and low of the TradeFlow bar is the best bid and best ask. The TradeFlow bars are color-coded to reflect the level of executed volume. The red portion is the percentage of trades executed at the bid price and the green portion is the percentage of trades executed at the ask price. The color brightness and the width of the TradeFlow Bars reflect the volume of executed trades. Bright and wide TradeFlow bars indicate heavy volume and thin, dark TradeFlow bars indicate low volume. Time is not a factor. New TradeFlow bars are plotted as the bid ask prices change.
Time Based TradeFlow are similar to TradeFlow bars except they use time for plotting new bars. You can set up Time Based
TradeFlow to be built on any intraday period you choose. The example shown here is a 1-minute Time Based TradeFlow chart with a couple of my custom studies using a 5-bar running sum of trades at the ask price (the green line) versus trades into the bid price (the red line). The histogram oscillator is plotting the difference between the two lines.
Time Based TradeFlow are color-coded to indicate the percentage of the trades at the ask price (green) and trades into the bid price (red). In addition, the width and brightness of the coloring indicate heavy or light volume. Wide bright bars indicate heavy volume.
We can see in the chart that following the retest of the 1322.00 low and when some economic news came out at 9:00 Central Time the market rallied with heavy volume. The Time Based TradeFlow bars became wide and bright. Buyers were coming in. As the market climbed above 1334.00 to 1335.25, the prices bars began to narrow. The Time Based TradeFlow bars were darker during the second test of the high. In addition, the 5-bar running sum of trades into the ask price (the green line in the middle pane) diverged with the earlier peak. Traders were no longer willing to pay up and the market started to move back down.
Some traders may find that Time Based TradeFlow Charts are a nice bridge between classic intraday bar charts they are used to and CQG’s TradeFlow charts, which do not use time. The key element I think is getting the important volume information detailed by either version as to what traders are doing. Other charting styles only give you the last price and total volume. TradeFlow charts including the new time based version provide for you better insight into traders actions at the best bid and best ask price.