The Handbook of Technical Analysis + Test Bank. Lim Mark Andrew

any duration to create bars and candlesticks of longer or multiple periods, normally referred to as higher timeframe bars and candlesticks. Hence, a 15-minute bar represents a bar that is associated with a higher timeframe, unlike 5- or 10-minute bars.

Figure 3.3 shows a series of OHLC based bars and its equivalent candlesticks being formed by the quantization of price into 5-minute intervals or periods.

Figure 3.3 The Quantization (Filtering) of Price Action.

      OHLC data is therefore simply a summary of price activity within a certain interval or period. The longer the duration of the interval or period of the resulting OHLC data, the higher will be the timeframe associated with such bars and candlesticks. As can be seen in Figure 3.4, most charts are created from basic OHLC data, with the exception of the equivolume chart, which requires additional information on volume in order to construct its bars. In short, equivolume bars require OHLCV data, with V representing volume.