Cynthia Kase on Kase Bar Trading - Part 2

are we ready to move on to the picking case bar range yeah certainly I think

people understand the concept but then comes the challenge of how to choose the range what range should I use and the methodology is very simple um here at the top we have a 15-minute chart so for example if you were a Trader and you normally would trade a 15-minute chart you'd set up a 15-minute chart like you always do and then you would apply the true range to the 15minute a chart now here um this is a 24-hour market and we've got a very low true range overnight and then the true range comes up during the day so just on this chart the true range is varying from about 1. 85 to 2. 65 and on most charting systems the average true range is available you just apply it to the Chart so I'm going to pick 2. 25 as my target true range and why is that why Point 2. 25 well it's kind of in between the range between 1. 85 and 2. 65 just trying to pick a representative true range for this chart and so then I'm going to go into my case bar chart and I'm going to set my target to 2. 25 and whereas you can see at the top the range varies around a bit from 1. 85 to 2. 65 on the bottom of the chart uh the true range varies by very little it's right around 2. 25 for every bar now I didn't ask am I able to get case bars is it something that's available in say like a trade station or meta stock or anything like that um it's available presently on trade station and it will be made available on Bloomberg professional um later on this year okay is it something extra is an extra feature I have to pay for it's free on both systems okay got it okay and here's a similar chart uh the next page shows a similar chart the same instrument for a 45 minute chart so it's a similar type of thing uh we set up a 45 minute chart we see that on average the range uh is between about 3. 68 and 4. 10 so I'm going to pick 3. 89 kind of as a representative a size and at the bottom I'm going to set my target for the case uh bar at 3. 89 yeah I can and see on the bottom too when we do input that even in a sideways Market you still get more of a feeling of being able to pick tops and bottoms a little bit easier I guess that's right it it can cond it spreads out high range bars and it condenses small range bars so it eliminates a lot of noise I think in the market tremendous tremendously let's look at one more chart uh on uh just comparing uh time versus case bars

and then we can look at some actual uh examples of charts uh time versus uh case with uh with some indicators on the screen to see how it would make a difference in trading okay uh the next chart is um the e- mini and uh the 60-minute chart I've got a 60-minute chart on the bottom and then I've got um two different uh case bar lengths up on the screen the top you could just see by looking at it the top chart has a few more bars than the middle chart which means that the case bar range is slightly smaller and what I've done here is because the uh e- mini tends to have a high range during the day and a lower range at night the top chart is set to a representative true range for the 24-hour period and the middle is set to a representative true range just for the day session so uh anybody that's setting it up can kind of pick the maximum range if they just want a representative of the day session or just an average range if they want a representative of the whole um 24-hour period does anyone give does one give more signals than the other well the more bars you have the more signal you're going to have okay right so the next uh chart it shows uh an the uh time chart at the

top and uh case bars at the bottom and uh with just a simple moving average system double moving average system crossover system and the macd and so if you compare the signals from the top to the bottom you can see start out on the top with the time bar with the whipsaw with the moving average whipsaw and that whipsaw is absent on the bottom chart the case part chart then moving along uh in red there's a uh momentum Divergence signal higher high in price lower high in momentum on the time chart which gives a false exit system signal and there is no signal at all on the case bar chart then moving forward there's another momentum Divergence with which would turn an exit it confirms at 10897 on the time chart it confirms at 1090 um on the uh case bar chart so confirms at a better price on the case bar chart and then following that there's another whips saww however it's a 10-point whipsaw on the um time chart and a 3. 5 point whipsaw on the case chart also to get back in uh the time chart crosses over 2. 75 points higher to the case bar AC cross this back and then at the very end uh they uh both charts have a momentum Divergence calling for an exit off the same high so that's just a real simple example of the type of behavior that one sees on the time bars versus case bars all right good so sounds like get you in a better prices and then keeps you out of bad trades with those false signals that's correct just a couple of snapshots to uh to wrap up with the

up just a couple of snapshots with the case statw system we're only looking at entries here but uh first of all just looking at the charts uh you can see that the chart on the right is just cleaner smoother the price action is just uh more regular and if you look towards the right of the chart of the time bar chart on the left you can see there's a huge single bar um single bar uh move down and that's broken up very nicely on the case bars now our methodology is to take second signals in the direction of a trend so we would look for a long signal with the low holding and Then followed by another long signal and if you look on the left uh you can see that there's an L A pullback and A new L and then the market Dr declines so on the minute chart on the 60-minute chart uh there's a false long signal where on the case chart there's only one L so there's no false long signal on the bottom of the uh move after the down move is over uh the opposite takes place is that you have a down move that's then over and then on the time bar you only get one L so you don't have a chance to get in or or's let's say out of your short and into a long where on the right um there's on the case bars there's two L's so you're able to see that you have a second by signal uh to reverse the trade or get out of the short and reverse the trade or just go long all right so you found that the waiting for that second signal gives you a higher probability trades yeah I mean it's all based on Elliot wave theory we have either 1 2 3 four five or ABC so uh normally if you're going to have a move you'll have an ABC so you can take the c or a 1 two 3 four five you take three so that's the theory behind that all right you've got one more chart here Force case bars versus time bars on yes I have the last chart it's a case bars versus time bars and before we look at the actual signals let's take a look at the uh the flag you could see that on the case bar chart you can see a flag you could see a corrective flag it's very clear uh it's very clear about what's going on and so a Trader that knows anything about geometric patterns would be looking at that flag and saying uh I'm not sure I want to trade this short but certainly um if I'm long I think I want to stay long and wait for breakout to the upside or from out of the market I'm looking for a long signal to uh get back into the upside where on the left that flag more or less disappears it just becomes this very Strang looking um strange looking uh pattern uh also so that's one feature is that these patterns show much more clearly and then the other uh thing is that if you look at the long signal coming up off the bottom you only get one L so on the 60-minute chart we never get a pullback and a second L to get long so we'd either have to jump in without confirmation or wait for the second L which comes at the top of the move uh where on the case bars you can see you get an L get a nice pull back and then a new well and uh and it goes up from there all right and so again the these signals these long and short signals even though the ell wave is not counted there or uh that's what the signal is based on those is OT wave counts well it's based on the idea that very few Market moves are comprised of one wave okay so we don't count the waves we just wait for a pull back and a new wave to start so it's really based more on uh swings pivot lows pivot highs and swings so you have a pivot low you have a long signal you have a pivot High pivot low and then a new long signal well we've just scratched the service here kind of covered a lot of ground I guess that's right can people can go to your site to kind of find out more about case bars and how to use them people can go to our site and um there's a description of case bars in our manual for a trade station and those people that have Bloomberg uh can go to case go within Bloomberg and take a look in at case go all right well we'll link to Cynthia's site at Casco it's k. com Cynthia thanks very much for your time today appreciate you spending some time showing us the slides and showing us your case bars you're welcome