Money and loans

While there is no right bar length, traders most often choose 5-, 10-, 15-, 30-minute. and 1-hour periods to chart. Most of the commercial software packages require that the interval be evenly divided into 1 hour; therefore, a 6 1/2-minute interval is not allowed. When using longer bars, such as 1 hour, it is important to consider the length of the last bar of the day. A 1-hour bar will post its first price at the end of the first actual hour, rather than 1 hour after the open; the last bar will be the interval from the last whole hour to the close. In the case of oil, this may only he 10 minutes. When bars are uneven in this way, the price ranges and corresponding volume are no longer comparable with one another.
There is a difference in opinion between analysts over the choice of intraday intervals. One group prefers to pick a standard number because it conforms to the way others trade, for example, you can expect orders to flow more actively every hour. This approach may be particularly valuable if you plan to take the opposite position. The other group of traders are constantly seeking their own time interval, avoiding uneven order flow and price distortion caused by most other traders. if you are part of this group, you may choose your interval by dividing the total number of minutes in the trading session by a value that gives you equal-length bars. You may also want to find a bar length, such as 21 minutes, that represents a Fibonacci number and comes close to dividing the day equally.

The intrinsic dependency on time makes a moving average less adaptable to day trading. To be used properly, a moving average must be recalculated at fixed intervals. Two phdosophic: questions must be answered with regard to intraday moving averages. Do trends exist in this short time interval, and does it make sense to apply a moving average to all intraday prices unevenly spaced with respect to time?  Markets with a large noise component require more time to identify a trend, or a larger price move; therefore, it may not be possible to enter a trend trade and still have enough profit potential before the end of the trading session. it is likely that there will not be more than 25% of the daily range remaining after the trend has been identified, making the profit opportunity too small.
The versatility of computers allows all intraday prices to be used in a moving average rather than the traditional 5-minute bar; furthermore, you can create a price bar based on every 5 or 10 prices, regardless of time. In a liquid market, prices might be posted every few seconds even though volume may vary. For practical purposes, prices might be considered equally spaced. But consider an extreme example. The price of a less liquid market changes every 15 seconds during more active times, then quiets to 5-minute intervals; at one time, there is a lull of 15 minutes followed by a jump in price. Is there a difference in the way we would interpret the following two patterns? is there a difference in the way a moving average would calculate the trend?