Direct answer
A “worked example of One Hour” is a fully spelled-out scenario that shows how you would use the one-hour timeframe to analyze or measure price movement. It includes every assumption (like hypothetical starting price, direction, and cost model) and then performs the calculation step by step, using no real-time market data.
This article gives a transparent scenario-based example. It also separates stable mechanics (timeframe definitions and basic arithmetic) from variable conditions (volatility, trading costs, execution, and data).
How a worked example of One Hour works
A one-hour timeframe means you group market price information into intervals that each cover 60 minutes. In practice, you may use the one-hour view to observe where price started and ended within each interval, or to compare movement across consecutive intervals.
A worked example typically has four parts:
- Inputs (assumptions): choose hypothetical prices, a hypothetical position size, and a cost model.
- Time framing: define which exact 60-minute window you are measuring (for example, 10:00–11:00).
- Mechanics: calculate the change in price within that window and convert it into a profit-and-loss figure using a stated formula.
- Limitations: explain what could make real results differ, such as spreads, commissions, slippage, and different broker data.
Stable mechanics here are the arithmetic and the definition of “one hour” as a 60-minute interval. Variable conditions are everything that depends on the live market and the trading environment.
Evidence or example: one-hour scenario with explicit assumptions
Assumptions (hypothetical)
- You analyze a single one-hour interval: 10:00 to 11:00.
- The instrument behaves like a simple price series where you can measure entry price and exit price within that window.
- Hypothetical prices:
- Entry (10:00): 1.2000
- Exit (11:00): 1.2030
- Direction: price increases from entry to exit.
- Position size model (kept simple):
- Assume a conversion where a 0.0001 price move corresponds to $1 for your chosen position size.
- This is a made-up mapping only for demonstration; real products vary.
- Costs model:
- Ignore all costs at first, then show how adding costs changes the outcome.
Step 1: compute the price move
- Price change = 1.2030 − 1.2000 = 0.0030.
- Convert to “ticks” using 0.0001 increments:
- 0.0030 / 0.0001 = 30 ticks.
Step 2: convert ticks to dollars (no costs)
- With the mapping $1 per tick:
- Profit (hypothetical, before costs) = 30 ticks × $1 = $30.
Step 3: include a simple cost assumption
- Assume one round-trip cost expressed in ticks: 2 ticks total (this represents spread/commission combined in a simplified way).
- Net profit = 30 − 2 = 28 ticks.
- Net profit = 28 × $1 = $28.
What this shows
This is a worked example of “one hour” because it ties the measurement window (10:00–11:00) to a calculated outcome using explicit assumptions. Another person can independently verify the math by using the same entry/exit prices and the same tick-to-dollar mapping.
Limitations and risks (what can make real results differ)
- Time alignment errors: “One hour” depends on the exact start and end times. If your chart or data uses a different session time zone, your entry/exit points can shift.
- Cost and execution uncertainty: spreads, commissions, and slippage can change the effective entry and exit compared with your assumed prices.
- Data differences: different providers may show slightly different prices for the “same” hour due to update timing or feed processing.
- Non-representative relationships: a one-hour move that was positive in one scenario does not imply future one-hour moves will be similar.
- Hidden assumptions: the tick-to-dollar mapping above is an illustrative placeholder. Real instruments require instrument-specific contract specifications.
Verification and next question to ask
To verify a worked example yourself, check three things:
- The one-hour window: confirm the exact 60-minute interval and time zone.
- The arithmetic: reproduce the price change, tick conversion, and net outcome using the same assumptions.
- The cost model: ensure you account for whatever costs you assumed, and understand how they affect net results.
If you want a deeper next step, the key question is: Which specific definition of “one hour” are you using—one-hour candle close-to-close, or entry/exit at exact timestamps—and what exact cost model matches your environment?