wpicotte 16 Posted January 26, 2018 Question about indicators such as MAs and VWAP on charts of different time frames. The context here is using these as points of entry / exit while monitoring (specifically) 5-min and 1-min charts. The numeric values of identical indicators differ on each timeframe slightly, which I'm finding confusing when timing trade entries. Is this difference something others try to mitigate through settings? Is it standard and just a matter of knowing they differ? Is the method really to focus on resistance / support applied to one timeframe (i.e. 5-min) and focusing on this? Thanks for your insights. Wesley Share this post Link to post Share on other sites
Anders 5 Posted January 26, 2018 Wesley -- the moving averages are calculated values for the specific chart you are looking at. So, the 9 period exponential moving average on the 5min chart will be a different calculated value than the 9 period exponential moving average on the 1 min chart, and so forth. It is calculating the moving average for the last 9 periods (whether 1min, 5min, etc). As for which to rely on (1min or 5min) as a better indicator of support/resistance, I don't have an answer for you (that's up to the trader and their strategies). The exception to the the above is with VWAP -- this is a calculation of all shares traded for the entire day regardless of timeframe, so that technical level should appear as the same value on all charts, regardless of timeframe. Hope it helps and that I didn't confuse you more. Also I'm no expert on any of this (yet!) so hopefully the information is correct! Anders Share this post Link to post Share on other sites
wpicotte 16 Posted January 26, 2018 No, that helps. I understand the calculations behind the indicators (though the clarification on VWAP is helpful, too). My question (which you addressed) is really about risk management -- guidance from Andrew and others emphasizes use of levels, hence the initial question. Understood that the timeframe in use is trader-specific -- totally makes sense. I'm curious to know how others feel regarding use of MAs as levels for entry / exit guidance as it pertains (if at all) to timeframe when making these decisions. Share this post Link to post Share on other sites
wpicotte 16 Posted January 29, 2018 Wanted to circle back on this regarding the comment about VWAP. This isn't the same on charts of different timeframes within the same time period. Assume two timeframes, 5-min and 1-min. Also assume the same number of shares traded each minute of the a single 5-min timespan. If price descends $.20 each minute, starting at $2 and ending at $1, the VWAP on the 5-min chart will be the mean of this change, while the VWAP on any given 1-min candlestick will be above the mean, or at the mean, or below the mean. Hence, when comparing between the two in real time, VWAP values are different. None of this contradicts the underlying feedback that levels / indicators used by a trader are an individual choice, but since I haven't been doing this long enough to have personal preference, it's worth clarifying -- for me, at least. Share this post Link to post Share on other sites
Peter S 3 Posted January 29, 2018 The VWAP is the average price of all the shares traded since a specific starting time, not the average of the shares traded during the time duration of a candle. The way DAS calculates VWAP by default is from the market open time. So the figure shown on the 1 minute and 5 minute chart is essentially the same number. Like all averages it depends when you start counting, so you may see different VWAPs on other platforms, but DAS is pretty consistent across charts. Share this post Link to post Share on other sites
mlestina 6 Posted July 24, 2022 I ran into the same problem in BBT's new Replay feature (values for for indicators such as the 9EMA are vastly different on the 1 minute chart as compared to the 15 and 60 minute charts and the daily chart for the same stock on the same day and at the same time of day. Opened ticket 13486, and even emailed Aiman in Moscow regarding this observation. Aiman's response to me seemed to be consistent to what Anders said above. Aiman, thanks for the BBT replay feature and for your dedication and enthusiasm to BBT and trading! Nevertheless it sure confused me big time and it seems to be an issue not sufficiently addressed either by this forum, any book, any article or any website. Because I wanted to clarify this issue, I have pasted below my thread with Aiman in anti chronological order for reference: -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Hi Matt, Moving averages are applied to all the time frames, and the value changes depending on the time frame. If you go to how moving averages are calculated then you can see that it is the sum of stock's closing prices during a time period divided by the number of observations for that period, which tells you that the 9EMA is just the sum of the last 9 candle closes divided by 9 which tells you that the value of 9EMA on the 1 minute chart will be different from the value of the 9EMA on the daily chart. It will not show you the same price. When you are trading you need to do different time frame analysis when building your plan to trade. I live in Moscow by the way, it is 3AM here 😄 On Sun, Jul 24, 2022 at 2:52 AM Matthew Lestina <[email protected]> wrote: Aiman, Thank you for your reply. Nonetheless, I am still a little confused. In that book you refer to (Alexander Elder's 2014 New Day Trading for a Living), in section 22, he discusses moving averages and exponential moving averages, and it seems that a 9 MA or 9EMA is a 9 day moving average, not a 9 minute moving average as you seemed to indicate to me in your email below. In other words, it would seem that the 9EMA is averaging prices over the last 9 days (albeit weighted more to the most recent of the 9 days), and hence what happens in the last 9 minutes should have little bearing on its value? Hence I am confused. btw, are you now in Moscow or Vancouver. If you are in Moscow, it must be 4AM, you must be a night owl! Matt From: Aiman Almansoori <[email protected]> Sent: Saturday, July 23, 2022 19:39 To: Matthew Lestina <[email protected]> Subject: Re: Fw: Conversation with Matthew Lestina Hi Matthew, First of all, you're welcome, glad you're enjoying the simulator! Second of all, there's no issue calculating the averages. Moving averages shows you the average price per time frame. The 9EMA on the 1m for example will calculate average price for the previous 9 one minute candles. 9EMA on 60 minute chart will calculate average price last 9 60m candles, that is why the price is different! Thanks, On Sun, Jul 24, 2022 at 2:37 AM Matthew Lestina <[email protected]> wrote: Aiman, Thanks for starting the BBT Replay feature. It is so nice to be able to view price action and simulate trades without having to pay someone $100 per month to do so. In using the BBT replay function, I encountered a problem (see email below) and opened ticket 13486. The problem is that I am observing vastly different values for the indicators (i.e. 9, 20, 50 and 200 MA and VWAP) depending on whether I am viewing a 1 minute chart, a 5 minute chart, a 15 minute chart, a 60 minute chart or a daily chart. This is for the same stock on the same date and at the same time. It does not seem right that the price value for a 200 day (or even a 9 day) moving average should change drastically depending on whether I am viewing the 1 minute chart versus the 60 minute chart. Could you please explain why this is so? Is it possible that some of the indicator lines drawn in the BBT replay may be erroneously calculated causing the vast disparity in their values between the charts? To me, this does not seem right. And this is significant because as you pointed out in your modules that we need to look at these indicators often for conformation as to when to take a trade or when to partial or exit a trade. Therefore, could you please explain ( or refer me to some resource such as a book, video, article or website) why these indicators have different values depending on which chart (i,e, 1 minute chart, 15 minute chart etc) I look at even though the stock ticker, the date and the time of these charts are all the same? Thanks. Matt From: Team Bear Bull Traders <[email protected]> Sent: Saturday, July 23, 2022 17:48 To: [email protected] <[email protected]> Subject: Re: Conversation with Matthew Lestina Hi Matthew, is ts normal to have 9EMA on a 1m chart at one value and on a 5m chart at another price, these are different time frames so the moving average will be different depending on the time frame Best, Bear Bull Traders Support team www.bearbulltraders.com On Sat, 23 Jul at 3:00 PM , Matthew Lestina <[email protected]> wrote: I am using the replay function, and notice that the indicators(9ma, 20ma, 50ma, 200ma and vwap are at vastly different prices for the same stock at the same time but on different timed candlesticks (i.e. 1 minute vs 5 minute vs 60 minute vs 1 day charts). Why is that? I would expect all of these to be at the same price at the same time and day for a particular stock. Why are these indicators at different prices depending on whether the chart is 1 minute vs 60 minute? I need to be able to rely on this to view the price action and make decisions on trades and by having these indicators at what seems to be random prices may work against my learning curve. Could you please explain why I am observing this on your replay app.stocktradingsimulator.com? Share this post Link to post Share on other sites
