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TRADERguy · 07-05-2004, 16:17

The closing price is important for daily charts, especially for markets that are primarily pit traded or are primarily traded during certain market hours. The stock market (any of them, especially those in the US) provides the best example. The open is influenced by amateurs that put in orders while the market is closed or by people that have non-trading day jobs (think dentists and other professions) that can only participate during the first hour. After that it trades up and down. But accounts are marked to market at the end of the day and the close represents the outcome of the battle between the bulls and bears, after the professionals have weighed in.

In forex it is a little less clear when the day starts and ends; it will depend on what currency pair(s) you are trading and where you live. That said, the end of the New York or Asian session is the easiest time to call the close (although the "official" open is when New Zealand starts trading because of where the dateline is drawn on the map). The "day" is filled with firms hedging their currency exposure but by the end of the day the speculators will have battled it out and the closing price is the outcome.

On intraday charts the significance of the close of each bar is much less significant. What does the close of a five minute bar represent?

Hope this helps.

07-05-2004, 16:17	#4 (permalink)
TRADERguy level 3 Join Date: Sep 2003 Posts: 122 Rep Power: 0	Closing prices The closing price is important for daily charts, especially for markets that are primarily pit traded or are primarily traded during certain market hours. The stock market (any of them, especially those in the US) provides the best example. The open is influenced by amateurs that put in orders while the market is closed or by people that have non-trading day jobs (think dentists and other professions) that can only participate during the first hour. After that it trades up and down. But accounts are marked to market at the end of the day and the close represents the outcome of the battle between the bulls and bears, after the professionals have weighed in. In forex it is a little less clear when the day starts and ends; it will depend on what currency pair(s) you are trading and where you live. That said, the end of the New York or Asian session is the easiest time to call the close (although the "official" open is when New Zealand starts trading because of where the dateline is drawn on the map). The "day" is filled with firms hedging their currency exposure but by the end of the day the speculators will have battled it out and the closing price is the outcome. On intraday charts the significance of the close of each bar is much less significant. What does the close of a five minute bar represent? Hope this helps.