The Close of a Bar is Meaningless

[johnw 10]

if close is meaningless then all is meaningless. what is support resistence based on? patterns? staggered time frames? how would that affect support resistance? high , low, open, all meaningless. TF all meaningless. mathematical calculations all meaningless... because...different staggered time frames BS...fib meaningless..... gaps meaningless...all kinds of charts..meaningless...staggered TF invalidates all measurements....computer sync invalidates all measurements....no real reference points...all is meaningless....fruitless..a waste of time...send your money to me...i will give it some meaning on daily and 5 minute charts.....

 

this is all BS....time to get on my moto and ride away...leaving the land of dipsticks...adios....

 

 

gm Patuca,

 

You appear to be confused ..very confused indeed.

 

Why not give some thought to the information that the Exchange provides (the real World) and the notions that Patuca creates ( Putuca's World)

 

The Exchange actually provides very little information, ...whereas there is no end to the bits and pieces that you can conjure up ... staring with bars, bar open, bar close.

 

If you make this your starting point then many things will have a tendency to fall into place or drop by the roadside.

[Patuca 13]

gm Patuca,

 

You appear to be confused ..very confused indeed.

 

Why not give some thought to the information that the Exchange provides (the real World) and the notions that Patuca creates ( Putuca's World)

 

The Exchange actually provides very little information, ...whereas there is no end to the bits and pieces that you can conjure up ... staring with bars, bar open, bar close.

 

If you make this your starting point then many things will have a tendency to fall into place or drop by the roadside.

does anybody on here REALLY believe in staggered intraday time frames? what about daily staggered time frames?? weekly?? monthly??? think about what that one concept does to everything.....

[johnw 10]

............................................think about what that one concept does to everything.....

 

 

I would be interested to read your thoughts on the 'staggered time' concept.

[Patuca 13]

I would be interested to read your thoughts on the 'staggered time' concept.

doomsday for TA. don't wake me up..leave me alone..i can't even entertain such a horrendous thought...akin to all out nuclear warfare...it will be when the lights go out....all becomes meaningless..i can't live that way....please just leave me alone in my dream world....let me believe something that may not be true...if staggered time frames are true i can't face the consequences...like Willy Nelson once said, if I recall correctly, "if they take trigger i'm done for"

[Patuca 13]

Please forgive my ignorance. How in the world could this happen? I don't understant :doh:. What do you mean by staggered? Or having two 5min different charts?

 

 

Mr Shanghai in PRC isn't it incredulous, amazing, and humorous that only you and I question such a concept that would end TA as we know it?

Edited October 30, 2012 by Patuca

[BlueHorseshoe 10]

Mr Shanghai in PRC isn't it incredulous, amazing, and humorous that only you and I question such a concept that would end TA as we know it?

 

I'm not sure about that . . .

 

Draw a support line - use the lows, not the closing prices - that's good old fashioned TA and perfectly valid.

 

Indicators based on closing prices are more questionable.

 

My main objection though is Candlestick and similar charting methods - pure nonsense.

 

Range bars are also another matter; though the close of a range bar is meaningless, it can have utility in terms of order entry because it's maximum distance from the open can be anticipated at the open.

 

BlueHorseshoe

[SIUYA 11]

Mr Shanghai in PRC isn't it incredulous, amazing, and humorous that only you and I question such a concept that would end TA as we know it?

 

probably because it wouldn't .....or because TA as you know it is vastly different to how others view it.

[Patuca 13]

probably because it wouldn't .....or because TA as you know it is vastly different to how others view it.

ok good..if you have staggered time frames on the same 5 minute chart then i will have, or could potentially have, a different OHLC than you correct?? if your 1 minute ahead of me the your close will be different right? your high could potentially be different correct or am i missing something here? i understood joshdance and mr horseshoe as saying two different people could have different 5 minute time frames. I suppose they were saying depending when they each logged on??? but i thought the 5 minutes were set by the exchange..that is the day session is divided into 5 minute time frames and everyone is looking at the same 5 minute time frame regardless of when you log on? we are all seeing the same info..of course there could be some latency depending on platform but we will have have the same OHLC to see. maybe i have misunderstood what they were saying?? so explain to me just what they were saying?

[Patuca 13]

I'm not sure about that . . .

 

Draw a support line - use the lows, not the closing prices - that's good old fashioned TA and perfectly valid.

 

Indicators based on closing prices are more questionable.

 

My main objection though is Candlestick and similar charting methods - pure nonsense.

 

Range bars are also another matter; though the close of a range bar is meaningless, it can have utility in terms of order entry because it's maximum distance from the open can be anticipated at the open.

 

BlueHorseshoe

perhaps i misunderstood what you were saying about staggered time frames? i understood you and joshdance as saying if i am 2 minutes ahead of you then potentially my high or low could be different than yours? that would create many thousands of different trend lines...support ...resistance lines...IF my high/low can be different that yours on a five minute chart of the same instrument thus rendering any support resistance as basically useless.. in other words there would be no stable reference points for all our measurements if my 10:00 am to 10:05 am five minute chart has a different high/low/open/close than your five minute chart i.e. i could be looking at a different support resistance than yours...etc. so what where you saying?

[SIUYA 11]

assuming we are talking about the same idea....

my simple view

----if the exchange opens and closes at the same time and simply records the first trade on the same time stamp for everyone, then you could safely assume the charts will be the same.

Or if the charts are built up from tick charts then the way it would differ would be if people start from different times.

 

However, the highs and lows of the series of bars would not change, the support and resistance would not change, the trend would not differ too much, the MAs would converge, etc; etc;.....so does it make much of a difference? IMHO no

 

.....unless as suggested you are placing a lot of importance on the close of the bar and as the time frame gets larger the larger the differences become more pronounced. Hence why its often suggested that all you need is a horizontal line.....and a reason why i use more range bars.

I also think a lot depends on the instrument. Equities and such that are not 24 hours do have distinct opening and closing times.....are they relevant for the day.....you bet, if you are trading longer term and not intrday. For FX, indexes and other more global macro instruments i might think less so.....but this is all just subjective.

 

Basically - i dont think TA would matter either way - its a road map not a set of universal rules or laws.

[BlueHorseshoe 10]

perhaps i misunderstood what you were saying about staggered time frames? i understood you and joshdance as saying if i am 2 minutes ahead of you then potentially my high or low could be different than yours? that would create many thousands of different trend lines...support ...resistance lines...IF my high/low can be different that yours on a five minute chart of the same instrument thus rendering any support resistance as basically useless.. in other words there would be no stable reference points for all our measurements if my 10:00 am to 10:05 am five minute chart has a different high/low/open/close than your five minute chart i.e. i could be looking at a different support resistance than yours...etc. so what where you saying?

 

Hi Patuca,

 

The high or low of a given bar could be different, just like the close could be different. So an idea like "I'm going to place a buy stop at the high of the prior bar" becomes a bit meaningless in terms of order entry (which is not to say that it wouldn't work nonetheless, just not because the prior high is some magical price that everyone is looking at).

 

Similarly, "I'm going to buy on the close when the RSI(of the close) goes under 80" attributes meaning to the closing price that is nonsensical.

 

HOWEVER . . .

 

Once you start looking at things like trendlines, significant data points become harder to dodge, whatever way you stagger your timeframes.

 

A virgin data point (such as yesterday's low tick) is there on a daily chart, an intraday chart, and any staggered picture of intraday data. Perhaps because your five min bar chart is staggered three minutes after mine it will appear in a different bar, but it will still be there and obvious on both are charts because price never went below it. So we could both draw a support line using it.

 

This applies (with decreasing efficiency) to any short term high or low - if it is higher than the prices surrounding it then it will be the high of a bar, however you stagger your timeframes.

 

IN SUMMARY . . .

 

As far as using TA goes, SIUYA seems to put it most succinctly when he says:

 

" its a road map not a set of universal rules or laws "

 

BlueHorseshoe

[Patuca 13]

assuming we are talking about the same idea....

my simple view

----if the exchange opens and closes at the same time and simply records the first trade on the same time stamp for everyone, then you could safely assume the charts will be the same.

Or if the charts are built up from tick charts then the way it would differ would be if people start from different times.

 

However, the highs and lows of the series of bars would not change, the support and resistance would not change, the trend would not differ too much, the MAs would converge, etc; etc;.....so does it make much of a difference? IMHO no

 

.....unless as suggested you are placing a lot of importance on the close of the bar and as the time frame gets larger the larger the differences become more pronounced. Hence why its often suggested that all you need is a horizontal line.....and a reason why i use more range bars.

I also think a lot depends on the instrument. Equities and such that are not 24 hours do have distinct opening and closing times.....are they relevant for the day.....you bet, if you are trading longer term and not intrday. For FX, indexes and other more global macro instruments i might think less so.....but this is all just subjective.

 

Basically - i dont think TA would matter either way - its a road map not a set of universal rules or laws.

 

ok i follow you but what about staggered time frames on a 5 minute chart? latency of platform laid aside should we not all be looking at the exact same info at the same time? If so, how does staggered time frames on a 5 minute chart take place like was mentioned in this thread?

thanks

[SIUYA 11]

ok i follow you but what about staggered time frames on a 5 minute chart? latency of platform laid aside should we not all be looking at the exact same info at the same time? If so, how does staggered time frames on a 5 minute chart take place like was mentioned in this thread?

thanks

 

I would assume if given the same starting point, accurate clocks and such then yes, you would think the charts would be the same. Otherwise you will have different (or staggered) time frames.

 

Re any other definition/application of what a staggered time frame is then i have no idea.....

unless it has something more to do with the idea of looking at multiple time frames....ie; as an example 5min, 30min, 60min bars.....

I would assume this would be referred to as multiple time frames, so probably best to ignore this.

 

Bluehorseshoe was the first to mention it, and I think he points out the issues there.

 

Unless of course you are trying to flog a dead horse (excuse the pun)

Edited October 31, 2012 by SIUYA

[SunTrader 10]

.....

I also think a lot depends on the instrument. Equities and such that are not 24 hours do have distinct opening and closing times.....are they relevant for the day.....you bet, if you are trading longer term and not intrday. For FX, indexes and other more global macro instruments i might think less so.....but this is all just subjective.

 

Basically - i dont think TA would matter either way - its a road map not a set of universal rules or laws.

Somebody gets it. Well actually others too but well put nonetheless.

[Patuca 13]

----if the exchange opens and closes at the same time and simply records the first trade on the same time stamp for everyone, then you could safely assume the charts will be the same.

that right there is my whole point. it does. the exchange in essence sets the 5 minute chart (or any other time frame..10 minute..15..min) because they set the start of the stream of data that is ongoing throughout the day. so everyone has the same data..same time stamp as you put it ...right? so then how do we get staggered 5 minute charts such as joshdance and mr horseshoe discusses. maybe i fell off my moto and bumped my head but i still don't get how i could be looking at one 5 minute chart and mr horseshoe another. how could these sort of staggered time frames exists? it seems to me my 5 min chart it isn't dependent on when i log on with my computer but it depends on the exchange. don't we all get the same exact info from the exchange? if so, shouldn't all have the same 5 min..10 min..15 min charts...etc....?

[Patuca 13]

Somebody gets it. Well actually others too but well put nonetheless.

so are you a fundamental trader not TA trader?

[Patuca 13]

 

A virgin data point (such as yesterday's low tick) is there on a daily chart, an intraday chart, and any staggered picture of intraday data. Perhaps because your five min bar chart is staggered three minutes after mine it will appear in a different bar, but it will still be there and obvious on both are charts because price never went below it. So we could both draw a support line using it.

 

sh?t bang my head against the wall and spit out my tobacco.. you would have one support line at one level and i another and the thousands of traders all having different support lines all over their charts so where is the REAL support level at? what about flags..pennants...triangles...and other patterns. what about double tops..double bottoms...wouldn't mine be different from yours..to me this would make TA nonsense.

[Patuca 13]

Hi Patuca,

 

The high or low of a given bar could be different, just like the close could be different.

what does that do to mitsubishi famous perfect mathematical calculations if he is taking measurements off OHLC because "they are the sure data" per mitzy. hows does his math work then? how would fibs work then (some would say they don't:) but mr racette makes a living using them ..so they must work at least a little bit)? the market would have to be completely fractal at all levels and on any point.

 

if 20 traders can't look at the same 10 minute chart on 20 different computers and see the same triple bottom forming then we are throwing darts in the air...

 

if staggered time frames can exist on the same period (say a 15 minute chart) then how does that happen? as mr shanghai (i think) said how can that be?

[Patuca 13]

houston..we have a problem

[SunTrader 10]

so are you a fundamental trader not TA trader?

No.

99% TA / 1% FA or something like that.

 

Why do you ask that?

 

Where a market (that doesn't trade "round the clock") closes is very important. That is until the next trading day where it opens becomes now more important.

 

Intraday highs and lows less important in the grand scheme of things.

[SunTrader 10]

As far as staggered bar data points on shorter time frames :shrug:

 

Could care less what someone else's chart shows and for the most part don't look at anything, for signals, below 60 minutes. Entries yes but not signals.

[Patuca 13]

 

Where a market (that doesn't trade "round the clock") closes is very important. That is until the next trading day where it opens becomes now more important.

 

Intraday highs and lows less important in the grand scheme of things.

if you are intraday trading on 5 and 15 minute charts what about where a bar closes on a 5 minute chart or 15 minute chart. is that important? is the OHLC of the bar important?...a mr al brooks thinks it is? ole windbag why? thinks it is.

 

session open and closes are important if you are trading via daily charts..etc... and also have implications for intraday trading...etc but what about pure intraday off say a 15 minute chart. is the OHLC important in this latter? would it matter if 20,000 traders are looking at the same 15 minute time period chart but they are seeing staggered price/time data on that same period 15 minute period and as mr horseshoes says can even have different highs/lows and most certainly different closes.

 

is this not throwing a monkey wrench in the whole scheme of things..please see my picture to the left

[SunTrader 10]

if you are intraday trading on 5 and 15 minute charts what about where a bar closes on a 5 minute chart or 15 minute chart........

I agree and that is one of the many reasons I don't use short term bars for signals.

[SIUYA 11]

if you are intraday trading on 5 and 15 minute charts what about where a bar closes on a 5 minute chart or 15 minute chart. is that important? is the OHLC of the bar important?...a mr al brooks thinks it is? ole windbag why? thinks it is.

 

best ask them as from memory most of us who are responding didnt think so.

 

session open and closes are important if you are trading via daily charts..etc... and also have implications for intraday trading...etc but what about pure intraday off say a 15 minute chart. is the OHLC important in this latter? would it matter if 20,000 traders are looking at the same 15 minute time period chart but they are seeing staggered price/time data on that same period 15 minute period and as mr horseshoes says can even have different highs/lows and most certainly different closes.

 

is this not throwing a monkey wrench in the whole scheme of things..please see my picture to the left

 

you can have 10 people look at the same chart and get ten different opinions, ten different styles and approaches, ten different possibilities of hitting the button in terms of time, and ten different possible exits.....so its largely irrelevant what people see. (even if you stagger the chart) Its more important on what they do and then what the market does (which ever comes first is also partially irrelevant (???))

 

close of bars is great for working with a computer intraday. It froms a great consistent base from which to make realsitic consistent assumptions - ie; when this occurs do this at this time. Otherwise so long as each trader remains consistent to the best fit for what ever system they are using that also ties in with the market as it works then that is probably more important.

(I use range bars which dont fall subject to large bars whereby the move is missed on a X minute bar, but also has other issues in that sometimes you miss trades if automating, or get some good slippage)

 

With the staggered bars in minutes (or as range bars), one might get a signal, another might not - they will probably even itself out over the long term, and it would be more important to worry about the other factors......in other words - its something that is probably not worth worrying too much about intraday.

[BlueHorseshoe 10]

that right there is my whole point. it does. the exchange in essence sets the 5 minute chart (or any other time frame..10 minute..15..min) because they set the start of the stream of data that is ongoing throughout the day. so everyone has the same data..same time stamp as you put it ...right? so then how do we get staggered 5 minute charts such as joshdance and mr horseshoe discusses. maybe i fell off my moto and bumped my head but i still don't get how i could be looking at one 5 minute chart and mr horseshoe another. how could these sort of staggered time frames exists? it seems to me my 5 min chart it isn't dependent on when i log on with my computer but it depends on the exchange. don't we all get the same exact info from the exchange? if so, shouldn't all have the same 5 min..10 min..15 min charts...etc....?

 

You don't get any information from the exchange, I'm afraid. To do so is very expensive. You get your data from your broker, and your broker has "done things to it" to make it "better" for you (like filtering bad ticks). My broker might do things slightly differently to yours.

 

I once ran a comparisson between data from a UK Spread Betting company and Tradestation - the differences were huge - but then the SB company made their own markets . . . Although that happens with Spot FX, doesn't it?

 

But the real issue isn't whether we're all seeing a different chart, the issue is that the close, relative to the high, low, open, prior close etc, is arbitrary and meaningless. Even if we are both looking at the same chart it is meaningless. Why? Because as I said before the chart is imposing an artificial and discrete time structure on a continuous data set.

 

As long as you are aware of this and how it does or doesn't affect what you do, then it's probably not worth getting overly hung up about. Those who frequent the 'candlestick corner' may need to be a little more concerned.

 

BlueHorseshoe