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Re: [amibroker] TimeFrames: Is their use flawed?

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Title: TimeFrames: Is their use flawed?


Herman,
 
Longer timeframes are mainly used to reduce noise. Yes they introduce the lag as any filter (like MA),
but this is common and obvious feature of any causal filter.
They are used for exactly same reasons as moving averages and other filtering techniques.

Best regards,
Tomasz Janeczko
amibroker.com
----- Original Message -----
From: Herman
Sent: Thursday, July 16, 2009 2:56 PM
Subject: [amibroker] TimeFrames: Is their use flawed?

I hate to rock the boat but this has been nagging me for quite some time.


In EOD trading TimeFrames can be synchronized with significant date boundaries, like weeks, months, years etc. and sometimes this may make some sense. However, TimeFrame Indicators need to reach full period before they update. This means that TF indicators can lag a number of bars equal to the number of bars in the TimeFrame period. Why would anyone work with lagging indicators?


In RealTime, TimeFrame periods are synchronized with the start of regular trading day. Here again, the TF indicators need to reach full period before they update. This means that a RT signal based on a 15Min TF indicator, on a 1-min chart, may lag up to 14 minutes.   


There must be some reasons why TimeFrames are still used and I welcome your explanation. If they solely exist because they were used some 75 years ago, to simplify hand calculations, then perhaps it is time to move on :-)


best regards,

herman





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