on monday, which daily pivot lines am i supposed to work with? surely not sunday evenings?
and for finding my pivot lines from today’s close, what time do I consider the “open” If the close is at 4:00PM EST? is 9:00AM EST the open? or is sunday evening the open?
Thanks!
I’m going to bump this for possible recognition and help.
Hi, Dan
Regarding daily pivot levels, most traders use 5pm-5pm New York time as “one day”. And the purists among us will tell you that this is the ONLY legitimate time period to use for a trading day.
Conveniently for some of us, our trading platforms and charting packages open and close daily candles at 5pm New York time. Except on Sunday.
Sunday totally screws the pattern up. There are basically two things you can do with Sunday:
[ul]
[li]You can ignore the 3 hours, or so, of trading from 2pm-5pm on Sunday. At 5pm on Sunday — which is the beginning of
[/li]the Monday trading day — you would use Friday’s pivot levels as your “previous day”.
Note that “Friday” means 5pm Thursday - 5pm Friday.
[li]Or, you can combine Friday and Sunday, and treat this as one 27-hour day. You will probably have to do this manually,
[/li]using the Open from Friday’s candle, the Close from Sunday’s candle, and whichever High is highest and whichever Low is lowest. Then you’ll have to use one of the Pivot Point Calculators available on this site, and elsewhere, to calculate pivot levels.
[/ul]
So, which of these methods is correct? You decide. One thing you wouldn’t do — as you said in your post — is use Sunday’s three hours of trading as your “previous day”.
To answer your second question, regarding the pivot levels for Monday, the Monday trading day begins at 5pm Sunday and ends
at 5pm Monday.
I’ll show you what FXCM does with Sundays in their MarketScope charts. In the daily chart of the AUD/USD, below, I have zoomed in to show the past 10 days, and I have labeled each day of the week. Notice that the MarketScope chart shows last Sunday October 25 as a separate day; but, one week earlier, Sunday October 18, has been combined with Monday October 19 into a single candle. On the MarketScope daily charts, only the most recent Sunday is shown separately as a daily candle.
I have used the built-in pivot-level indicator to display pivot levels from the Friday candle.
Your broker platform and its associated charts may handle the Sunday situation entirely differently. So, first off, study your charts, and determine the opening time and closing time of a typical daily candle (not Sunday). Then determine how your charts display Sundays.
Next, if your charting package has a built-in pivot-level indicator, determine whether it calculates daily pivot levels based on a 5pm-5pm (New York) trading day, or on some other time period. If your charts use some other time period, decide whether you want to use that time period, or do the work of collecting the O, H, L and C for the 5pm-5pm time period, and then running those inputs through a Pivot Point Calculator.
The 5pm (New York) start and end to the trading day is based on typical low points in forex volume and volatility at that time of day. As you are aware, at 5pm (New York time), the European, U.K. and U.S. business days are over; the business day in Asia has not yet begun; and only New Zealand and Australia are open for business. This particular time is as near to a “closed” forex market as we get in a typical 24-hour day.
I hope this has answered your questions.
Clint
hi.
i´ve a litle exercise for you that will make you understand the pivots lines very well.
first draw 8 lines randomlly in your 1h chart
then use them as you use pivot lines
then compare the results with the real pivit points
then get a more profitbable way to trade:D
Clint, I also use FXCM and the Trading Station platform, is there a trick to easily putting daily pivot points on a 1H or 15m chart? I tried switching my 1H to a daily using the dropdown TF menu and selecting the previous day with the pivot tool, but when I switch back to the lower frame it seems to bugger it up.
[B]Merchantprince,[/B]
I’ve had the same problems.
FXCM’s built-in pivot-level indicator is so primitive that it’s almost useless.
A good indicator, IMNSHO, would do the following:
[ul]
[li]allow you to select the formulas used to calculate the levels (there are several)
[/li]
[li]allow you to choose which levels to display, and how to display them
[/li]
[li]display selected pivot levels as lines [B]together with labels showing prices[/B]
[/li]
[li][B]be exportable to other time-frames[/B] (i.e., daily pivot levels could be displayed on the 15-minute chart, etc.)
[/li][/ul]
Maybe MT4 has these features. I have to admit that I have two MT4 platforms (Alpari and FXCM) which I rarely use.
For now, when I want to place pivot levels on a chart, I don’t even bother with FXCM’s built-in indicator ----------
I do it the old-fashioned way: I plug O, H, L, and C into a Pivot Point Calculator, get the prices, and manually plot lines at those price levels on the chart I’m using. “Primitive” doesn’t begin to describe this process.
I’m going to send a copy of this post to FXCM and ask them to consider an upgrade to their PP indicator.
Clint
Yeah, I kinda figured I was going to have to do it manually; I’d just hoped against hope that perhaps I’d misunderstood Trading Station’s interface… pivot calculators and manual lines, it is.
