Why use the 65-minute chart with stocks?
ispeculator.com
"Stocks trade for 6.5 hours a day, for a total of 390 minutes. The reason for doing so is we wish to divide the time periods up in order to produce bars that all have the same amount of time in each one. For example, if one divides the trading day into 60-minute bars, the chart will produce 7 bars per day, but the last bar will contain only 30 minutes of data. If we wish to have all the bars represent the same amount of time in each one, we need to use a 65-minute bar, because 390/6=65, ensuring that each of the bars actually contains the same amount of time in each one. Traders all have different preferences in terms of time frames but we believe the principle of ensuring that bars actually contain the amount of time that it's supposed to is a good one, so that we are not comparing apples to oranges.
To illustrate how we set up a chart, we are going to go over the arithmetic first. For example, a common set of time frames to view for stocks would be 5-, 15-, 65-, 130-minute, daily, weekly, monthly. Since the principle is to observe traders from different time frames, it is useful to have the same moving average, but from different time frames, in our case the 20EMA, represented in a chart. We go about this by calculating equivalents."
Teresa |
