I've read lots from various sources that goes along the lines of "wait for the bar to close over the XXX indicator", or another example is candlestick patterns that depend on the O-H-L-C values for the shape of the candle.
However, I think it is possible to change the shape of the candles, or candle patterns, or whether the close/open is around an indicator, by changing when the interval starts.
In the attached example, it is an hourly chart; usually charts start the bar on the hour, and close it before the next hour. For my study, I've extracted hourly bars from 5-minute data, starting on the hour (ex, 1:00, 2:00, 3:00 ...). For the comparison, I start the bar at the half hour (ex, 1:30, 2:30, 3:30 ...).
The 2 look generally close but with some differences. I marked 3 examples that stood out to me with blue arrows and labeled as 1, 2, 3. (I think they match up as the corresponding bars.)
In case 1, the On-the-Hour shows a tall wick and a short body. But the On-the-Half-Hour, these are 2 bars with long bodies, and no wick. Additionally, if you were looking for a close over an indicator, I'd guess the On-the-Hour would probably not signal, whereas the On-the-Half-Hour would.
Are these types of differences significant? Or do they somehow balance out with a large enough data set? I suppose they would affect pattern recognition or technical signals, the patterns or signals could change based on when the summarizing bar starts and ends. I suppose this is why they say draw trend lines or patterns based on highs and lows instead of closes, they seem to have consistent values between the 2 interpolations.
However, I think it is possible to change the shape of the candles, or candle patterns, or whether the close/open is around an indicator, by changing when the interval starts.
In the attached example, it is an hourly chart; usually charts start the bar on the hour, and close it before the next hour. For my study, I've extracted hourly bars from 5-minute data, starting on the hour (ex, 1:00, 2:00, 3:00 ...). For the comparison, I start the bar at the half hour (ex, 1:30, 2:30, 3:30 ...).
The 2 look generally close but with some differences. I marked 3 examples that stood out to me with blue arrows and labeled as 1, 2, 3. (I think they match up as the corresponding bars.)
In case 1, the On-the-Hour shows a tall wick and a short body. But the On-the-Half-Hour, these are 2 bars with long bodies, and no wick. Additionally, if you were looking for a close over an indicator, I'd guess the On-the-Hour would probably not signal, whereas the On-the-Half-Hour would.
Are these types of differences significant? Or do they somehow balance out with a large enough data set? I suppose they would affect pattern recognition or technical signals, the patterns or signals could change based on when the summarizing bar starts and ends. I suppose this is why they say draw trend lines or patterns based on highs and lows instead of closes, they seem to have consistent values between the 2 interpolations.
