Mechanics and Dynamics of Charting
closing prices. It should be noted that the longer the interval or period, the more
significant will be the high and low prices formed.
Nevertheless, opening and closing prices begin to gain more importance and at-
tention from market participants, making such prices more reliable and actionable, if:■ (^) The durations between active trading sessions are longer.
■ (^) The opening and closing prices are created over a longer interval (i.e., belong-
ing to a higher‐timeframe bar or candlestick).
There are larger price gaps between the previous closing and new opening
prices. (See Figure 3.8.) Longer durations between active trading sessions increase
the psychological importance and significance of opening and closing prices. As
such, daily opening and closing prices are generally of greater interest to market
figure 3.7 Significance of OHLC Data.
figure 3.8 Significance of Opening and Closing Prices.