I live in the UK and my broker is based in London.
We all know pivot points and SR lines are based on the previous day, but where is the previous day based on?
Simply put, the pivot point script on my MT4 account is based on a day being 00:00 to 23:59 GMT, however, should my pivot point not be based on 00:00 to 23:59 EST? Especially since I am trading GBPUSD mostly.
Normally the high and low are the same for each timezone but it is the closing price which will differ…
I’m going to take your three questions in a little different order, from the order in which you asked them.
Because the retail forex trading day never ends (except for weekends), there is endless disagreement among traders about what constitutes a “day” for purposes of plotting pivots, identifying daily highs and lows, etc. This disagreement doesn’t occur in exchange-traded markets like the NYSE or the LSE, where an opening bell, and a closing bell, tell everyone when the day has begun, and when it has ended.
Since the beginning and end of the forex trading “day” is a matter of opinion, everything you are about to read is my opinion. If my opinion doesn’t appeal to you, ask around until you find an opinion you like.
In my opinion, it doesn’t matter where you live, or where your broker is headquartered. The forex market is worldwide and continuous, 24/5. It has certain rhythms, which don’t depend on where you, or anyone else, happen to be located.
Well, I don’t follow your logic. If the forex trading “day” was based on the particular pair being traded, in your case the GBP/USD, why would you favor midnight-midnight in the home market of the cross-currency (USD, in this case), versus midnight-midnight in the home market of the base currency (GBP)? Especially considering the fact that twice as much volume is traded in London as in New York?
Let me suggest a different way of identifying the “forex trading day”.
Here is a 60-minute price chart of the GBP/USD, the pair that you like to trade. The chart covers roughly 20 trading days. Below the price chart, there is a tick-volume histogram, showing trading “activity”, as measured by number of price changes per bar.
Does the rhythmic rising and falling of forex “activity” suggest a daily pattern to you?
To me, it suggests this pattern:
The low points in daily forex trading activity typically occur between 5pm and 6pm New York time, day after day. So, I choose this time as the “logical” time to designate the end of one “day” and the start of the next.
In the second chart, above, the green day-separators mark 5pm New York time (EST) each day.
Because the U.K., all of Europe, and North America (which together account for 74% of all forex trading volume worldwide), all switch from standard time to daylight saving time, and vice versa, at roughly the same time in the spring and fall each year, 5pm New York time (10pm London time, and 11pm Zurich time) works year-round.
If you doubt the correlation between tick-volume (charted above) and actual dollar-volume in the forex market, here is some work I did on that subject — http://forums.babypips.com/newbie-island/38202-volume-forex-market-4.html#post246891
As I mentioned, all of the above is my opinion. Do with it what you will.
concise and brilliant reply as always clint!
thanks, i learnt something from it too 
Hello.
This USED to be one of my favourite arguments and it took YEARS for me to FINALLY agree with rhodytrader!!! LOL!!!
Pivots are ‘relative’ and it makes no difference which timezone you’re in. While the PRICES of YOUR Pivot Levels may differ from broker to broker (from timezone to timezone) price will ‘respect’ YOUR Pivot Levels no matter which broker or timezone you’re in. It’s pretty much that simple really.
Regards,
Dale.
I guess prices have respected my PP and SR lines, I was just hoping it wasn’t coincidence. And yes I’ve noticed activity is diminished in the afternoon/evening here and is pretty much dead overnight. The closing price at 00:00 GMT (19:00 EST) and at 05:00 GMT (00:00 EST) rarely differs.
The fact that London trades more volume was quite surprising to me, must read more about that…
Cheers
My personal preference is that I like using GMT pivots during Mondays and Tuesdays then I’ll switch to EST (NY) pivots come Wednesday, Thursday, and Friday.
This wasn’t my idea; I believe it was talking about in ICT’s thread:
http://forums.babypips.com/newbie-island/36328-what-every-new-aspiring-forex-trader-still-wants-know.html
Regards,
Clark
[B]If my opinion doesn’t appeal to you, ask around until you find an opinion you like.[/B]
Read more: 301 Moved Permanently
Thanks Clint that statement has just made my day. If we ever
get our signatures back I will use this. :lol:
well seeing how not one person stated the obvious, I’ll go ahead and drag up this 2 year old thread and give a better answer to this for future traders.
it’s EST that’s correct.
why? for one, rollover is at 17:00 EST . 2nd if you count from Sunday open 17:00 EST to 17:00 EST Friday close, you get 5 equal 24 hr periods and the pivots fit perfectly and react to it. why do you think all forex site quote their daily pivots in the EST time zone? Don’t believe me, pull a chart and see it for yourself.
any forex broker that start there midnight at 00:00 on sunday open is correct.
/end of thread
Thank you for sharing, you say the news I think I need more attention and understanding, a friend gives a lot of advice and sharing, continued attention and support.
could some one post a copy of gmt pivots as i cant find anything on the internet or send to
[email protected]
thanks
