Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

joshdance

The Close of a Bar is Meaningless

Recommended Posts

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

Share this post


Link to post
Share on other sites
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.

Share this post


Link to post
Share on other sites

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 !

 

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

Share this post


Link to post
Share on other sites

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

Share this post


Link to post
Share on other sites
Unless You Understand _____

You Understand NOTHING

 

Unless You Understand ___________

You Understand NOTHING

 

Good grief ;)

 

how ‘bout ?

 

Unless you understand structure, actions, time, and relations

You Understand NOTHING

:missy:

Share this post


Link to post
Share on other sites
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).

Share this post


Link to post
Share on other sites

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.

Share this post


Link to post
Share on other sites
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?

Share this post


Link to post
Share on other sites
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!

Share this post


Link to post
Share on other sites
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...

Share this post


Link to post
Share on other sites

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.

Share this post


Link to post
Share on other sites

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

Share this post


Link to post
Share on other sites
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.

Share this post


Link to post
Share on other sites

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:)

Share this post


Link to post
Share on other sites
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:)

 

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.....

Share this post


Link to post
Share on other sites
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.

Share this post


Link to post
Share on other sites
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."

 

 

attachment.php?attachmentid=28959&stc=1&d=1336876260

TL2.thumb.png.5a62ad0c246e8909891a216e7077ec3c.png

Share this post


Link to post
Share on other sites
You sound way to emotional for Futures trading.

 

With the insinuation being.....?

How much is too much? I prefer none at all,but you appear to be saying some emotion is ok,,,, but not "too much"

 

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

 

I'm very happy for you.And these crucial "signals" are they the same ones that you recently valued at 50 cents?

 

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.

 

Is that the so called 90% who lose,or do you mean the mass of the remaining 10% who are technical traders?

The truth? what i believe doesn't matter? Who would have thought that you had exclusive knowledge of the truth? Should i just take your word for it or do you have some evidence for a ludicrous statement like that?

 

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.

 

The 90% surfers....or the 10% ?

 

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

 

According to your logic that time frame does not matter, they are all equally important, the implication is that every tick is important,if not,what is the smallest size wave i can "surf" ?. Though i call myself a technical trader,based on your statements,which you claim are non negotiable,i can sympathize with those who believe TA is pseudoscience at best and a crock of sh##t at worst.

Edited by mitsubishi

Share this post


Link to post
Share on other sites
Do you think the big players give a damn about a bar chart,let alone sit around waiting for a bar to close?

 

YES! Definitely!

I understand your thinking and where you are getting at,

and I can agree about the wierdness about the whole thing and it seems a little strange indeed,

the fact is that it wouldn't matter on which timeframe you are looking at,

you have swing highs and lows on all the different timeframes don't you?

with your reasoning the highs and lows wouldn't matter either, but they do because they

indicate a turn in the market even if it's just a small one, a candle or a bar is based on time, why they have a very important factor is this, the highs and lows of a candle or bar creates support and resistance aswell as swing highs and lows even if that is psychological, and where a candle or bar closes the next one will open,

it is a great advantage if a candle would open above support or below resistance in the direction you would like to trade in, for that to happend, a candle must first close above or below support or resistance which is the highs and lows of the candles, this is a very important fact in price action, there are many traders only trading this. so the high low and close is very important and it does matter. Yes I have backtested it and this is mostly how I trade daily and Im profitable doing so.a breach of a high is very bullish and a breach of a low is very bearish but only if price can get the advantage to close the candle above or below a support resistance because then the next candle will open in your favor and price will have support in that direction, you also wouldn't have a clue what might happend if you don't wait for the close first. reading price action is an artform, practice practice:) yes you would take profit if a candle is closing above and below a high or low counter to your direction, so you would have to wait, because then price would have support buying counter move and you wouldn't want to be in on the trade anymore. this is all strange and it is not easy to understand, that is because this is all psychological. the market is all about psychology, a support and resistance line shouldn't to your theory have any significant meaning either, price go up up up and then suddenly stops and hangs around and going sideways, everyone knows there is no invissible line there stopping price, it's all psychological, the big bank traders are protecting this level because it is in their intrest doing so. yes they are definitely looking at highs and lows and closes.

Edited by Trader1

Share this post


Link to post
Share on other sites
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?

 

Mitsubishi,

 

If the above statement was not just a lead in to the rest of your awesome post, then I have to disagree. I do not feel that "big players" deserve to be held in high esteem. A small trader and a "big player" can enter the market at the same time and in the same direction. The small trader will lose money because he made an adhoc, uninformed decision to enter. A "Big Player" will enter the market as a result of careful analysis, meaning it was right and correct to enter even though he lost. If each lose, what is the difference? The difference is the level of arrogance and humility. The big player can be just as dumb as the dumb money small trader.

 

Big players make mistakes and the mistakes are frequently big and profitable for small traders to take advantage of. Long live the "Big Player".

 

Bar none, I enjoy your posts more than any others.

 

 

MM

Share this post


Link to post
Share on other sites
Mitsubishi,

 

If the above statement was not just a lead in to the rest of your awesome post, then I have to disagree. I do not feel that "big players" deserve to be held in high esteem. A small trader and a "big player" can enter the market at the same time and in the same direction. The small trader will lose money because he made an adhoc, uninformed decision to enter. A "Big Player" will enter the market as a result of careful analysis, meaning it was right and correct to enter even though he lost. If each lose, what is the difference? The difference is the level of arrogance and humility. The big player can be just as dumb as the dumb money small trader.

 

Big players make mistakes and the mistakes are frequently big and profitable for small traders to take advantage of. Long live the "Big Player".

 

Bar none, I enjoy your posts more than any others.

 

 

MM

 

Thank you.I must admit though that i often feel like i come across as irritable,entrenched and argumentative. If at any time i have upset or annoyed anyone here i'd like to apologize.I respect anybody who trades the market,we all know what a hard road it is to travel.And i respect the fact that all of you have your own opinions and methods regardless of what i may think or say about them.The market taught me to be humble and since i learned that lesson i have tried to carry that into the rest of my life.Sometimes i can do it,sometimes i can't.Work in progress.

More than any other trading forum,there have been things posted here that i have found very thought provoking and useful.

Share this post


Link to post
Share on other sites

lol... I could have written that very same post, Mitsubishi! And I'm probably about to prove it :)

And you definitely get cut some slack in your response to the ludicrous post (see, I can do it, too!) saying you're too emotional (right before he makes the seemingly emotional statement that the close DOES matter, whether you believe it or not, because it's the truth). Without, of course, providing any evidence of it being the "truth".

As he also says that "even the Open matters", I can't help but wonder if he's talking about daily bars?, since for any other timeframe the open is either the same or only a tick different from the prior close, so of course if one found the Close meaningful, they would find the Open of the next bar equally meaningful. But, I believe earlier in this thread it was acknowledged that indeed, the daily could be seen differently than other timeframes as it's an agreed upon time. Then again, he's referencing futures, and I don't know too many individual futures traders who are trading off of daily bars.

I think at this point everyone's said their view and covered all the bases; if some choose to use it as a criteria they can. It was good for them for these posts to point out (or attempt to, anyway) the fallacy (or at least problem) with using them. But a lot have found ways to trade more bizarre things successfully, apparently in spite of, not because of, those things (planets, etc.) To quote Stan Laurel, "You can lead a horse to water, but a pencil must be lead."

Share this post


Link to post
Share on other sites

I think joshdance picked an excellent topic for debate.Leaving aside the technical merits (or otherwise) of the bars,It has shown the strength of feelings on this subject,which in itself is very revealing.It has reminded me,in light of my own comments,that conviction/belief can be a double edged sword.While ones' beliefs about how best to trade may be working fine,for me,it is a reminder to be ever vigilant of complacency and certainty when trading markets.Particularly as i often find that market lessons often transfer quite well to life lessons in general.Aim to be the best trader you can,aim to be the best person you can,and in theory,you should reap what you sow.

Share this post


Link to post
Share on other sites
According to your logic that time frame does not matter, they are all equally important, the implication is that every tick is important,if not,what is the smallest size wave i can "surf" ?. Though i call myself a technical trader,based on your statements,which you claim are non negotiable,i can sympathize with those who believe TA is pseudoscience at best and a crock of sh##t at worst.

 

Well, the smallest size wave would be up to you. Although I follow the waves on the 3 minute, 10 and 30 minute chart, I really use them to time entries on large waves I see on the daily charts. Most of the time, it's just to make sure the current, smaller wave, is going the same way when I jump in. It's an effort to minimize draw down time that works really well for me.

 

Sometimes, especially in choppier markets, I zoom down to the 60 minute, or even 30 minute, and use the 3 an 10 minute for my timing.

 

So, it's not about the size of the smallest wave, it's about knowing which one is the best to try and ride. That is something only experience can tell you.

 

 

Another way to answer your question would be to look at the potential wave ion question, and try and calculate if it will last a few bars. If so will you clear commissions with a profit?

 

A super small 1 tick wave will almost never be big enough to clear your commissions. The 10 minute on the other hand, very often is.

 

The 3 minute is "Ify" at best, short of a real power move. That is why I only use them as instruments of timing.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.