The range bars in Forex analysis are indicators that will not have to be avoided. Unlike traditional time-based charts, range bars provide a fresh perspective on price action by focusing solely on price movement rather than time.

Range bars are a type of charting technique that represents price movement based on a specified price range rather than a fixed time interval.

Each range bar forms when the price moves a specific amount whether up or down, regardless of the time taken for that movement.

This method allows traders to visualize price trends and potential reversals more clearly.

How Range Bars Work

To create a range bar chart, you first select a range (e.g., 10 pips). Once the price moves up or down by that range, a new bar is formed. Here’s how it typically works:

Price Movement: If the price moves up by 10 pips, a new bar is created above the previous one. Conversely, if the price drops by 10 pips, a new bar is formed below.

No Time Element: Unlike traditional charts, the time it takes for the price to reach the range is irrelevant. This means a range bar may form in a matter of seconds or hours.

Bar Composition: Each range bar consists of an open, high, low, and close, similar to other bar chart types.

Steps on How to Setup Range Bars on Different Trading Platforms 

MetaTrader 4 (MT4)

1. Open the MetaTrader 4 Platform: Launch your MT4 application and log in to your trading account.

2. Select the Currency Pair: In the Market Watch window, right-click on the currency pair you want to analyze and select “Chart Window.”

3. Open the Navigator Window: Press Ctrl + N to open the Navigator Window.

4. Access the Range Bar Indicator:

If you don’t have a range bar indicator installed, you may need to download one from the MQL5 Market or use a custom script. There are various free options available online.

After downloading, place the indicator file into the MQL4/Indicators folder in your MT4 directory.

5. Attach the Range Bar Indicator:

Go back to the Navigator window, find the range bar indicator, and drag it onto the chart.

You may need to set the parameters, such as the desired range (in pips), and then click “OK.”

6. Customize the Chart: Adjust your chart settings (colours, grid, etc.) to your preference to enhance visibility.

MetaTrader 5 (MT5)

1. Open the MetaTrader 5 Platform: Start MT5 and log into your trading account.

2. Select the Currency Pair: In the Market Watch window, right-click the currency pair you want and select Chart Window.

3. Open the Navigator Window: Press Ctrl + N to access the Navigator.

4. Access the Range Bar Indicator:

If you don’t have a range bar indicator, download one from the MQL5 Market or another source, and place it in the MQL5/Indicators directory.

5. Attach the Range Bar Indicator:

Find the range bar indicator in the Navigator, drag it onto the chart, and adjust the parameters for your desired range.

6. Customize Your Chart: Change colours and settings to suit your trading style.

TradingView

1. Open TradingView: Go to the TradingView website and log in or create an account.

2. Select the Currency Pair: Type the desired currency pair in the search bar and select it from the results.

3. Change Chart Type to Range Bars:

Click on the chart-type icon (usually found at the top left, where it shows “Candles” by default).

From the dropdown menu, select Range Bars.

4. Adjust the Range Settings:

Click on the gear icon next to the “Range Bars” option to adjust settings such as the range size.

Set your preferred range size (e.g., 10 pips) and click “OK” or “Apply.”

5. Customize Your Chart: Modify the chart’s visual settings (colours, background) as per your preferences.

NinjaTrader

1. Open NinjaTrader: Launch NinjaTrader and connect to your trading account.

2. Select a Chart: Go to the “Control Center,” click on “File,” then “New,” and select “Chart.”

3. Choose the Instrument: In the instrument box, select the currency pair you want to analyze and click OK.

4. Select Range Bars:

In the “Data Series” window that appears, locate the “Type” dropdown menu.

Select “Range” from the list.

5. Set the Range: Enter the desired range (in ticks or pips) in the “Range” box.

6. Click OK: After setting the range, click “OK” to create the chart.

7. Customize Your Chart: You can adjust the visual settings of the chart by right-clicking and selecting “Properties” to change colours, gridlines, and more.

Advantages of Using Range Bars in Forex Analysis

1. Elimination of Market Noise

Range bars filter out minor price fluctuations that can obscure the underlying trend. By focusing solely on significant price movements, traders can better identify true market sentiment and avoid false signals.

2. Improved Trend Analysis

Since range bars react only to price changes, they can provide a clearer view of the trend direction. This helps traders make more informed decisions about entry and exit points.

3. Flexible Timeframes

Range bars can adapt to the trader’s preferences. For instance, a day trader might use smaller ranges (5 or 10 pips), while a swing trader could opt for larger ranges (20 or 30 pips). This flexibility makes range bars suitable for various trading styles.

4. Enhanced Risk Management

Traders can set stop-loss and take-profit levels more effectively with range bars, as they provide a clearer picture of price levels and potential reversals.

Disadvantages of Using Range Bars in Forex Analysis

1. Lack of Time Context

While the elimination of time allows for focused analysis, it can also be a drawback. Traders accustomed to time-based charts might find it challenging to adjust to the absence of time elements, which can lead to confusion regarding market timing.

2. Learning Curve

For traders unfamiliar with range bars, there may be a learning curve involved in interpreting the charts and applying them effectively within their trading strategies.

3. Potential Missed Opportunities

Since range bars only form when a certain price movement occurs, traders might miss out on trades if the price doesn’t move significantly within a specific timeframe.

How to Use Range Bars in Forex Analysis

1. Spot Trends

Range bars can help traders identify trends more effectively. When multiple range bars form in the same direction, it indicates a strong trend.

A series of range bars that alternate directions may signal a consolidation phase.

2. Identify Reversals

Traders can use range bars to spot potential trend reversals. A sudden shift in the direction of range bars, particularly after a strong trend, can indicate that the trend is losing momentum and may reverse.

3. Use Range Bars with Other Indicators

For a more comprehensive analysis, traders can combine range bars with other indicators, such as moving averages or oscillators.

For example, using range bars alongside the Relative Strength Index (RSI) can help confirm overbought or oversold conditions.

4. Set Targets and Stops

Range bars can aid in setting realistic targets and stop-loss levels. Since the bars reflect significant price movements, traders can place their stop-loss orders just outside the most recent range bar to minimize risk.

Frequently Asked Questions 

1. What is the main difference between range bars and traditional candlestick charts?

Range bars focus solely on price movements without considering time, while traditional candlestick charts represent price movement over fixed time intervals.

This means that range bars may provide a clearer view of price trends and reversals by eliminating market noise.

2. How do I choose the right range for my trading strategy?

Selecting the appropriate range depends on your trading style and market conditions. Short-term traders might opt for smaller ranges (e.g., 5 or 10 pips), while long-term traders may choose larger ranges (e.g., 20 or 30 pips) to capture more significant price movements.

3. Can range bars be used in all Forex pairs?

Yes, range bars can be applied to any Forex pair. However, traders should consider the volatility of the currency pair when selecting the range to ensure that the bars accurately reflect price movements.

4. Are range bars suitable for beginners?

While range bars can be beneficial for all traders, beginners might face a learning curve when transitioning from traditional chart types.

It’s essential for new traders to practice using range bars and understand how to interpret them effectively before implementing them in live trading.