This is something You as a trader can determine by observing how much price tends to move on the selected instrument. You can then set the range bar size accordingly. Another option which is more widely used and recommended by Investopedia is as follows:
“While we could apply the same range bar settings across the board, it is more helpful to determine an appropriate range setting for each trading instrument. One method for establishing suitable settings is to consider the trading instrument’s average daily range. This can be accomplished through observation or by utilizing indicators such as average true range (ATR) on a daily chart interval. Once the average daily range has been determined, a percentage of that range could be used to establish the desired price range for a range bar chart.”
The short video below will help you better understand this concept and how to apply it on the Metatrader4 platform.
The professional RangeBars plug-in for the MT4 platform enables traders to leverage the concept of constant range bars in a live trading environment. It also offers precise and convenient backtesting methods.
When you attach the range bar indicator to a standard one minute time chart and define the desired range for a single bar, the plug-in will first create a historical range bar chart from all available history on the M1 anchor chart using the closest possible approximation algorithm. Next, the indicator will instantly start plotting live range bars in real time and you will be able to add indicators, draw trend lines, mark price levels, apply standard MT4 templates and even run EAs directly on your custom range bar chart. You will be able to do exactly the same things as you can do on standard time-based charts in Metatrader.
The PRO version of the indicator is additionally shipped with a convenient script that lets you create precise range bars charts using data downloaded from tick data repositories and utilize range bar charts in metatrader’s standard backtester to test your EAs on range bar charts with 99% modeling quality*.
*) The procedure requires a licensed version of Tick Data Suite or Tick Story.
The following video takes you through this process step by step.