Indicator Close Price vs. Candles

[4xtrend]

Just want to know why we use candles and most all indicators use only close price for calculations?

Should we not use line view? All we need to know is if price is going higher or lower. I have found that viewing line price gives much better view with far less information that needs processing. I know candles look very good, but is it really helping us in our quest for intraday trading?

Please rip this appart as you see fit. I need this analyzed from all angles.

4xtrend.

[John_M]

Hi all,,,


Well just my 2 cents worth.

In some respects your right about the line chart but again it is based on the closing price only and a lot of the available information about the price action is left off so unless your a trend follower and not intraday,,or day trader it could be all you need.

I dont think there is much to pull apart its just a matter of preference that suits you trading style.

It depends on the charts you use,,I use MarketScope with FXCM and on many of there indicators you get the choice of Open,Close,Low,high .

Regards
John

[amarnath]

hi john m

tks for u r nice informative re

[TRADERguy]

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.