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joshdance

The Close of a Bar is Meaningless

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  SunTrader said:
Start with 1+1 then and let me know when you are done.

 

Because I sure am.

 

 

You can expand on horse races all you can.

 

Until you don't pull out some numbers your talk is not about math and probabilities.

 

I hope you have someone to talk to because I am done will taking a condescending attitude.

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It is really Nice thing to share with you..i just read the opinions and eagerly want to share mine.First of all i believe that closing is absolutely effective on long term analysis. i am using line charts for trading and all we know that line charts are totally based on closings. As far as my observation i believe that one level is break when it close below or above the level. beauty of line chart is that there is no shadows. so if i need to open or close a position than i will wait for various closings.if a level breaks in 30 M and 1H chart respectively it will indicate me that now there is more chances to break that level in 4H chart and 1Day chart which clear my mind to sit on a long or short direction.if it resist some levels i will think about to stand a side.

So as far as my observation i believe that close of a Bar or Candle is not meaningless.

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The only close that has a higher relative importance is the close of a day.

Because it forces those working on very small time Horizons to close positions.

 

Multiples of this Day .. week month YEAR will have also a (less) relative importance.

Divisions will have even less relative importance ( but yes, some )

 

Still all these even are of only relative importance.

 

What has an absolute importance.. IS not the close of a time frame.

 

But the end of a Buying or Selling wave..

 

Something that is very educative is to draw a 1 box reversal P&F chart.

 

2x 5x or 10x the bid/ask spread ( depending on the price ) . make sure you use the course of trades ( they are the absolute reality ) and not any H/L of a time framed bar.

 

Then look at what you have drawn

Ask what is it that makes the chart change columns ?

 

It is not any time frame or the close of any time frame. it is when buyers and sellers become exhausted .

 

Those tops and bottoms of the alternating columns.

Have an Absolute Reality. They have Absolute Position in Space and Time.

 

Just like looking at a Mountain from varying distances.

 

Its top is THE TOP etc

 

Changing the BOX size is not changing time frame it is just changing the distance you are viewing the absolute reality FROM.

 

Motorway

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  motorway said:
The only close that has a higher relative importance is the close of a day...........

 

What has an absolute importance.. IS not the close of a time frame.

 

But the end of a Buying or Selling wave..

 

Finding tops and bottoms definitely is more important but it wasn't the question.

 

In any case P&F is good in hindsight.

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  joshdance said:
As always, this is solely my opinion as there is little "truth" in the markets but rather we merely have opinions and our own view of things.

 

Bar closes are not "important" in the sense that they mean anything significant to any significant number of people.

 

The close of a bar is a snapshot of a price traded in the flow of market activity.

 

Is the close of a bar truly meaningless? Let's have a look...

 

1. There is little truth in the markets. If this is a true statement, then the only truths are price, and more importantly, change in price. So far, so good.

 

2. Bar closes are not important to any significant number of people (variable time frame distortion, etc, muddles the picture, ...) I'm not so sure that this is a true statement. A more accurate statement might be "no single time frame's close (or range bar, or tick bar, etc) is more significant than any other time frame's close."

 

3. The close of a bar is a snapshot of price traded in the flow of market activity. So very true.

 

And at some point, since we are taking measurements of the flow of market activity, we are going to have to choose a price somewhere in the price bar to make our trading decision. If we are going to "measure" price action, we are going to have to pick some point and call it personally significant, or we'd never enter the market!

 

And if we are using price bars, what are we going to call "significant" if not the open, or the close, or the high, or the low, or all of the above? The only wrong answer is "none of the above."

 

So JD's title is relative. One man's meaningless is another man's bread and butter...

 

 

Luv,

Phantom

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  phantom said:
1. There is little truth in the markets. If this is a true statement, then the only truths are price, and more importantly, change in price. So far, so good.

 

Actually you lost me here phantom -- I don't see how price can be "true" or "false."

 

  phantom said:
A more accurate statement might be "no single time frame's close (or range bar, or tick bar, etc) is more significant than any other time frame's close."

 

Possibly, but after further thinking, if we measure significance by how many traders (or the potential trading volume of such traders) view a specific time frame, then perhaps we could say that one is more significant than another. If 50% of all market participants watched exactly the same chart, then it would be more significant than any other, assuming that those who watched it used its bar closes in making trading decisions.

 

  phantom said:
we are going to have to choose a price somewhere in the price bar to make our trading decision.

 

Let me fix that: "we are going to have to make a decision, and are going to have to enter the market at some price." For example, those who do not trade with bars, and who have no concept of a "bar," do not need such a bar to make a choice on when to enter the market. They must, however, enter at some price, of course. This goes along with the intent of this thread.

 

  phantom said:
So JD's title is relative. One man's meaningless is another man's bread and butter...

 

Agree, and thank you for your contributions and opinions, they are appreciated and valued!

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  motorway said:
The only close that has a higher relative importance is the close of a day.

Because it forces those working on very small time Horizons to close positions.

 

Bingo.

 

  motorway said:
But the end of a Buying or Selling wave..

 

Something that is very educative is to draw a 1 box reversal P&F chart.

 

2x 5x or 10x the bid/ask spread ( depending on the price ) . make sure you use the course of trades ( they are the absolute reality ) and not any H/L of a time framed bar.

 

I have never gotten into P&F charts but am going to use this an example to learn some new things. I have two settings: a box size and reversal size. For the ES, what settings should I use to start with in my quest here motorway? Sorry, I'm just not familiar with the terminology of what "1 box reversal" is.

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Try box size .5 and reversal size 1

 

As alternate ( depending on your software )

 

You could try BOX size .25 and reversal 2

 

 

Try also Box Size 1 X Reversal 1 (alternate Box size .5 X Reversal 2 )

 

Should give you nice charts.

 

.25 being the min increment on the instrument.

 

Motorway

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Do not look at the charts as just a form of breakout method.

 

Look at it in the same terms as market profile.

 

Look at The Horizontal Formations especially..

 

Your charts will seem to adapt to market time.

But they are not adapting .. They are market time.

 

Do not focus just on the static aspects of the chart

But the changes in activity as well.

 

Watching the chart FLOW and Build structure is the best teacher.

 

Motorway

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  motorway said:
Look at The Horizontal Formations especially..

..

Do not focus just on the static aspects of the chart

But the changes in activity as well.

 

Watching the chart FLOW and Build structure is the best teacher.

 

 

Very nice.

 

I have tried to view a PnF chart and do not like it so far, but I will not write it off yet. I see the intention of the charting method, but don't see the market's intent much clearer than what I normally watch.

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Something to think about for those who do chose to explore

market reality from the perspective of P&F

 

From Peter J Steidlmayer

 

Modern day reinventor(?) of P&F

 

COMPARE to ALEXANDER WHEELAN very dense but very good little text on P&F !

 

  Quote
Organizing data is always the first step in analysis. Most technical traders organize market data in terms of time and price. Peter contends that this is not the way the market represents itself, and that traders would be better served to view market data as the market actually presents it.

 

Peter examines market segments, or discrete market movements, in terms of value and development rather than price and time. To really understand the market, traders must allow the market to communicate freely. Any externally imposed structure will distort the results. Peter views chronological time as just such an external structure. Market movements do not conveniently begin and end at pre-calculated times in order to coincide with a particular chart or trading style. Market movements begin when some inefficiency between buyers and sellers exists. The movement ends when the market has attained its objective. Most technical analysis is based on the premise that the current price has already discounted all available information about the underlying instrument and so is “fair” at any given time.

 

Peter explains why recent developments in the markets invalidate this assumption — price at any given moment no longer represents value at that moment. Inefficiency generates market movement. In Peter’s terms, such movement begins with a dominant force that then drives the movement to some result or output (price). The end of any given market segment is, by definition, the beginning of another. Determining how, when, and under what circumstances a market segment ends is the beginning of market evaluation.

 

The concept of efficiency is critical to Peter’s methodology. It is, essentially, that state in which the buyers and sellers agree on the value of an underlying instrument. Peter explains the concept of dynamic efficiency, in which the markets are always moving from imbalance to balance. Peter believes that, ultimately, questions raised by the market can only be answered through active participation in the markets.

 

According to Peter, the market “ . . has a well-defined underlying process that can be understood and recognized and that process has a natural progression that can be seen and measured. It has reference points which, when identified, represent important information, and it produces a final output which accomplishes the market’s purpose. The process is cyclical: it reaches closure and and then starts over again.”

 

 

Very Good BUT

 

What He calls Value is from a P&F view really a Difference of Opinion .

 

Consider EVERY BOX on a P&F chart = A difference of Opinion.

 

A trend is sequentially Higher or Lower -->

 

Zones of DIFFERENCES OF OPINION !

 

consider carefully

 

Unless You Understand Time

You Understand NOTHING.

 

Motorway

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  motorway said:

Unless You Understand Time, You Understand NOTHING.

 

Assuming that we are talking about chartists here,

I'm not too sure that this is an accurate statement...

 

More accurate might be the statement:

"Unless you understand structure, you understand nothing."

(or very little..)

 

 

Luv,

Phantom

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  Quote
Unless You Understand _____

You Understand NOTHING

 

  Quote
Unless You Understand ___________

You Understand NOTHING

 

Good grief ;)

 

how ‘bout ?

 

Unless you understand structure, actions, time, and relations

You Understand NOTHING

:missy:

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  zdo said:
Good grief ;)

 

how ‘bout ?

 

Unless you understand structure, actions, time, and relations

You Understand NOTHING

 

My point, Zdo, is that the time element can be completely removed from the equation and one can still trade quite successfully. Examples include range bar chartists who trade price level breakouts with absolutely no time element involved whatsoever (notwithstanding the end of day flattening of positions).

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Unless you understand that you understand from mainly one viewpoint and therefore probably very little and that understanding is only one facet to being successful anyway, your success in this game is likely to be stunted. Learn a method well and use it well, but don't think that because your method has worked for you, it is the "right" way.

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  TheNegotiator said:
Unless you understand that you understand from mainly one viewpoint and therefore probably very little and that understanding is only one facet to being successful anyway, your success in this game is likely to be stunted. Learn a method well and use it well, but don't think that because your method has worked for you, it is the "right" way.

 

What's this got to do with the price of eggs in London?

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  phantom said:
What's this got to do with the price of eggs in London?

 

It means that lots of people find lots of ways of being successful(and lots of ways of failing too!). If time is important to someone then that is great if it works for them. If volume is useful for someone else then that's great too. But markets evolve and change, so the less blinkered we can be the longer we can survive. Anyway, back to the thread!

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  TheNegotiator said:
It means that lots of people find lots of ways of being successful(and lots of ways of failing too!). If time is important to someone then that is great if it works for them. If volume is useful for someone else then that's great too. But markets evolve and change, so the less blinkered we can be the longer we can survive. Anyway, back to the thread!

 

It was a rhetorical question...

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you dont even need to understand anything in this game - often its a better way to be.

thinking too much confuses, understanding that what you thought worked was actually just lucky can be devastating.

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Time is Important

 

time Frame is not important

 

Time as in Duration is VERY IMPORTANT

 

a P&F chart has an X and Y axis

 

a Bar chart has ALSO an X and Y axis

 

Both charts move through Time. But differently !

 

As I said I think Time is very important..

 

Motorway

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  motorway said:
Time is Important

 

time Frame is not important

 

Time as in Duration is VERY IMPORTANT

 

a P&F chart has an X and Y axis

 

a Bar chart has ALSO an X and Y axis

 

Both charts move through Time. But differently !

 

As I said I think Time is very important..

 

Motorway

 

7 more lines and you'd have a sonnet.

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I know what you mean but I think they are important,

for example if you where to trade a brakeout, price push through resistance you go long before the close only to find out that price fall back below resistance and you are stopped out, whata bummer! I realise ofcourse what you mean and why they wouldn't matter at all,

I agree with you in that matter since a normal bar or candle is only based on time, therefore it shouldn't matter, but now to my point, most of the traders do wait for the close, and because of that I think it's important, lets say that many traders are waiting for the bar to close above the resistance so they can go long, then the more power to it, I seen it over and over following price action, if price is not able to close above then price will most likely fall back, why? it's because most of the traders are waiting for the close, thats what makes it important, not the close it self, it shouldn't matter but it seems that it does:)

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  mitsubishi said:
Exactly who are you talking about here? Do you think the big players give a damn about a bar chart,let alone sit around waiting for a bar to close? In your theory,which time period are they looking at? (those traders who are waiting for a bar to close) .I mean,what's the ratio of traders looking at a 5min bar to close compared to those looking at 1 min bars at any given time? I assume you must know this,otherwise it seems to me to be a baseless theory and could definately affect your trading results.Don't tell me you back tested this without knowing what the ratios were...wonder what other things outside the box you didn't consider.Ah well,screw strategy,money management is king ....isn't it?

How would the placing of limit orders/resting inventory fit in with your theory? How would my profit target work with this theory? If my target gets hit before the close of a bar,why would i wait for the bar to close,and how do i know if i should wait for a 1 min bar or a 5 min bar,or any bar....how many bars must close before i can get a drink?

But wait,maybe i shouldn't be looking at bars at all.No, maybe i should be looking at candles,is the close of a candle more important? Are some candles more important than others depending on the name tag? Maybe i'm not looking for a bar to close,maybe i'm waiting for a hammer,or maybe i'm looking to get hammered at the bar (before it closes)

Tricky isn't it? Because the more questions you ask yourself,the more answers you have to come up with and who knows how many you can get right?

When i go drinking (which is pretty rare nowadays) i don't care too much what the bar is called, but i do care about the area where it's located,because the" herd" tends to affect the atmosphere.....

 

You sound way to emotional for Futures trading.

 

In my experience, everything matters. The high and low matter, the close matters, and the OPEN even matters.

 

Psychologically, where the bar closes DOES matter to the mass of technical traders. It is a sign of confirmation, at the very least. It does not matter what you believe, this is the truth.

 

As for the time frame, it does not matter. Since, with each different time frame, you are surfing a different sized wave, the close on a 1 minute time frame is just as critical for the wave there, as the same close on a daily chart and the larger wave you surf on it.

 

If your account if big enough, and you can afford the draw downs, it even matters on the weekly and monthly charts.

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  joshdance said:
That prompted me to write this, which is something I have been wanting to do a mini rant about but just haven't yet. As always, this is solely my opinion as there is little "truth" in the markets but rather we merely have opinions and our own view of things.

 

What are your thoughts? If you use the closing of a bar as a part of your trading, or if you feel that a bar's closing price is important, can you explain and convince me (or others)?

 

I've always liked your style josh.

I've been toying with some out of the box displays you might be interested in. Before I get to far into this I want to jog your memory about a comment you made on a video you posted a while back about POC shifts. I'd have to go back and listen to it again to quote you, but the take away was, in your opinion, POC shifts were not statistically sound, I disagree.

 

Time, price and volume, ain't much more I have to go on when deciding to enter a position. Over the last few years I've become almost entirely a volume trader, largely (past) POC shifts. I give no thought to candles, bars, opens or closes. The only reason there is an open or close is to designate the time segment. So my thought is if the EUR/USD (6E) traded 24 hours I would have an opening tick Sunday evening and a closing tick Friday night. But the Globex only trades 23 hours so I have "starts" and "stops" instead of opens and closes. If you keep that idea of starts and stops in mind and consider the rotation of the Earth :) there will be a start and stop for each trading session on every exchange around the globe during the 23 hours the Globex is available for trading.

 

I came up with this chart by setting up my monitors in portrait mode, since I haven't gotten around to reinventing the wheel (yet) the Y axis is now the X axis, so to speak. Simply, price moves horizontally across the chart, Time is irrelevant, sort-of. What I look at at the opening bell is price not time,,, I don't think I'm alone with that. So during the "rotation of the Earth" when the Asian session begins to trade I capture that first tick of price to mark the event, not time. The current price is always highlighted on the top of the display and the volume profile begins to develop into the patterns we MP traders recognize, only rotated 90 degrees.

 

Have you gotten out your tin foil hat yet? If not I'll add that I named a few of these trade-able patterns. The one on the bottom I call "the red rocks," the middle one can either be "the Chicago Bulls or Bears" (depending on direction) since the "tops" of the volume profiles resemble the tops of the John Hancock building and the Sears Tower. Lastly, the top profile is the "King Kong" pattern, if you were watching this profile build you would have witnessed King Kong jump from the Empire State building over to the Chrysler Building. Of course these profiles look a little different when they're building, but I'm sure you get the idea. I don't want to reveal much more of the secret sauce quite yet so I'll end by saying I believe, "The Close of a Bar is Meaningless," or should I say, "Bars are Meaningless."

 

 

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Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • AMZN Amazon stock watch, good buying (+313%) toi hold onto the 173.32 support area at https://stockconsultant.com/?AMZN
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