TradeStation Help
Kagi Chart
Kagi charts were created in the 1870's when the Japanese stock market
started trading. Kagi charts displays a series of connecting vertical
lines whose thickness and direction are dependent on what is happening
in the market. In TradeStation, the Kagi reversal amount can be specified
as a fixed price or percentage.
In this example, the Kagi chart is using a 2% reversal:
How a Kagi Line is Built
- When the market moves in the same direction
of a prior Kagi line, the line will be extended.
- When the market moves in the opposite
direction by at least the reversal amount, a new Kagi line in the
opposite direction will be displayed.
- The color and width of the Kagi line changes
when the Kagi line breaks a prior high or low.
Kagi Interval Settings
The Reversal amount is the minimum price movement needed for a new reversal
line to be drawn in the Kagi chart. A fixed price or a percentage
can be specified for the Reversal amount. The Reversal amount must be
greater than the minimum move, and should be evenly divisible by the minimum
move or rounding errors may occur.
The Interval setting defines the interval of the data used to build
the Kagi Lines. The appropriate interval depends on your market perspective.
Users with a short-term perspective may benefit from using smaller
intervals (more precision/noise). Users with a long-term perspective
may benefit from larger intervals (less precision/noise).
Kagi Chart Display
- The arrow displayed to the right of the
current Kagi Line indicates where the current price is located on
the current line.
- The hash-mark displayed to the right of
the current Kagi Line indicates where prices need to retrace to in
order for there to be a reversal.
Trading Interpretation
- A rally (series of thick lines) is defined
as a condition in the market when the demand exceeds the supply.
- A decline (series of thin lines) is defined
as a condition in the market when the supply exceeds the demand.
- A stable market is displayed by alternating
thick and thin lines when the supply and demand are in balance.
Strategy Back-testing & Automation
Due to the construction definition of Kagi charts, the back-testing
and automation of strategies is not recommended when using this chart
type; unless the underlying interval is set to '1 Tick' and stop/limit
type orders are used, taking precautions to avoid placing these orders
where they would be filled within the "reversal range". For
additional information on back-testing and automating strategies on Advanced
Chart Types, see Advanced
Chart Types - Strategy Back-Testing & Automation.
Additional Information
- When using a Kagi chart, multi-data charts
can not be created; only one symbol can be displayed on a Chart Analysis
window at a time.
- Kagi charts are not time-based; they are
built based on price activity. Thus,
- The lines on the chart will not necessarily
represent the specified data interval or time period.
- Dates may not necessarily be evenly
spaced across the time axis (x-axis).
- Indicators and strategies can be applied
to a Kagi chart.
- Actual volume values are only displayed
when '1 tick' is the selected interval. Otherwise, the 'Up Vol' value
equals one for Thick Lines; 'Down Vol' value equals one for Thin Lines.
For a
comprehensive list of command line commands, see Command Line References (All Commands) or Command
Line Reference (Sorted by Application).
About the Chart Analysis Window