TradeStation Help

Kase Bar Chart

Kase Bars are equal True Range bars previously known as Kase Universal Bars. The Kase Bar method creates bars with a true range based on a user's specified Target Range value by using only real price data. Kase Bar charts look like a traditional bar or candlestick chart with the exception that the size of each bar is dictated by a Target Range value; all the bars are approximately the same size (range).

Kase Bars have two main advantages over other "equal range" bar methods.

  1. Kase bars are based on equal true ranges, which takes into account gaps that may occur between the previous bar's close and the current high or low into the bar's range; as opposed to other "equal range" bar methods that only account for the high-low range and leave out any gaps.
  2. Kase Bars are built using only real data.  If there are any gaps in the underlying data; such gaps are shown as opposed to filling the gap by creating synthetic bars. If the minimum range between two ticks exceed the target range, the actual minimum range is shown. This is in opposition to other "equal range" bar methods, which force bars to be an exact size using synthetic data.

    For example, if two sequential prices were $10.10 and $10.20, Kase Bars using a Target Range of .05 (5-cents) will not insert synthetic data, but instead will generate a 10-cent bar since that is as close to the target range as one can get with the real data. Other "equal range" would have to insert a synthetic tick at $10.15, breaking up the 10-cent move into two bars, each with a range of 5-cents.

Benefits gained in using Kase Bars:

As you can see, the following Kase Bar chart consolidates the activity into fewer bars than the 60-minute chart.  

How a Kase Bar is Built

As prices update, the True Range of the data is evaluated. Once the specified Target Range is met, the current Kase Bar is closed-out and a new Kase Bar is opened.

Kase Bar Interval Settings

The target range defines the approximate price range, and must be greater than the minimum move. There are a number of ways that one can specify a Target Range value:

How Will Kase Bars Help Me Trade?

There are two major benefits that Kase Bars offer to trading, they are:

  1. Reduction in the volatility displayed on the charts. Volatility and risk are directly related and volatility is proportional to the True Range. Therefore, the more variation there is in the True Range from bar-to-bar, the more risk there is.  
  2. Cleaner signals; produced from smoother charts.

Strategy Back-testing & Automation

Strategies can be effectively back-tested on Kase Bar charts, when using either a '1 Tick' or '1 Minute' underlying interval. Automation and real-time analysis of strategies on Kase Bar charts should only be carried-out using a '1 Tick' underlying interval. For additional information on back-testing and automating strategies on Advanced Chart Types, see Advanced Chart Types - Strategy Back-Testing & Automation.

Additional Information

For a comprehensive list of command line commands, see Command Line References (All Commands) or Command Line Reference (Sorted by Application).

For more information on Kase Bars, ask Kase: askkase@kaseco.com.

Related Topics

About the Chart Analysis Window