Opens rather than Closes ?

Posted By black Saturday, April 17, 2010
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black
 Posted Saturday, April 17, 2010
Supreme Being

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Why do we base many of our calculations and indicators on the Close Price of a period?

Seems to me that as soon as a period closes, and the next period opens, that the Open Price of the new period is slightly different than the Close Price of the old period. If the period is small enough - less than 15 minutes - the difference between the old Close and the new Open might be very small.

When you have a Limit or Stop that is set for 15 pips, and you subtract a 2 - 5 pip spread, an additional 2 or 3 pips that often make up the difference between the old Close and the new Open can produce drastic results.

Doesn't it make sense that since we are now an instant into the new period - perhaps only half a second - that we should be making use of the most "up to date" Price info available for calculating the Strategy and Indicator calculations? After all, we don't do the new calculations until the close of a period. But the Close Price is old data, whereas the Open Price is newer by a split instant, and therefore more accurate.

Shouldn't we be making our calculations based on the Open Price rather than on the Close Price?

eMoe
 Posted Monday, June 07, 2010
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Hi, Black! I think that it is not very important according to the difference between close of the previous candle and open of the new one. But if you have real results that quite differ from each other, please show them. I think that it is not a problem to use current open value instead of close previous one.

Best regards!

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