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Daily Pivot Shift - page 2

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Jeremy
45
Jeremy  
cameofx:

To take a guess : US & London sessions are where most of the world's Forex volume traded. With London I've read somewhere being the 'greatest' in forex traded volume. So London close times (option 6) is where I would place my bet.

But to answer what majority of Close Time most online traders use, I would have to underline the fact that most MT4 Brokers I know set their clock to GMT or GMT +2 (this I also read is due to the fact that it will make weekend gaps better smoothed when averaging). And most will just use Daily pivot as is, i.e. based on broker-time candle close. So that would make it inconclusive (will need to take statistics on different platforms too). Your idea / indicator seems to be worth investigating.


I also heard that London is the greatest in forex traded volume. I was wondering if volume would be a factor or not. It would seem true to me that I should use the same 'Pivot Close Time' that the Traders with the most Trade Volume use. So if London has the most Trade Volume my Close Time should match whatever most Traders' Close Time is in London.

...

However, is that statement true for all hours of the day? Take the Asian Session for example. Wouldn't the majority of the volume traded during the Asian Session be from Asian Traders? And if so shouldn't the close of the daily pivot be the same as what the Asian Traders use? And wouldn't the same go for the US?

...

If the above is true then it seems like the Shifted Close Time should be changed either:

1) Every 8 Hours (to reflect the close times of each of the 3 sessions) or...

2) Every 1 Hour (to reflect the close time of each broker in their respective Time Zones)

...

If Most Traders just use the Default Pivots on their Trading Platform then the question is:

When do most Brokers Set the Close of their Daily Candle? Is it:

1) Midnight (GMT)

2) Midnight (12pm - In their Local Time Zone) or...

3) Close of Business (4pm or 5pm - In their Local Time Zone)

...

Without knowing what most traders use around the world I could think of 2 options for testing methods:

1) Set up an Indicator to print Pivots on the Charts and eye ball which Shifted Time is best one by one (Very time consuming and Tracking the results could be difficult)

2) Write an EA to somehow gauge the line of best fit for pull backs. (This method sounds like it could get complicated)

...

Any other ideas?

cameo
476
cameo  

JeremyJ, 

I forgot this post. I never get the hang of using "Subscribe to topic" button/link... I shouldn't have to go to Profile > Subscribe just to see what topic I had posted, but instead show it on the Forum topic list. The left icon together with the lit-up arrow is redundant to show only new added post IMO. 

Anyways.... 

I also heard that London is the greatest in forex traded volume. I was wondering if volume would be a factor or not. It would seem true to me that I should use the same 'Pivot Close Time' that the Traders with the most Trade Volume use. So if London has the most Trade Volume my Close Time should match whatever most Traders' Close Time is in London. 

However, is that statement true for all hours of the day? Take the Asian Session for example. Wouldn't the majority of the volume traded during the Asian Session be from Asian Traders? And if so shouldn't the close of the daily pivot be the same as what the Asian Traders use? And wouldn't the same go for the US? 

Yes! Greater trade volume would generate greater trend, range, etc. Everything would be amplified IMO. 

I'm not an avid user of Pivot or have explore it for that matter. But I think you should underline the fact that you're using/discussing Daily Pivot instead of Weekly or other Timeframe or type. So you should check it's formula & see what would Close Price of the Day reflect on it's calculation. Stochastic %K for instance rely much on Close price of candle to make it bend on OB/OS. 

That's all I got JJ. I leave ideal Close Time exploration to you mate... 

good luck.
cameo

MTcrafter
102
MTcrafter  

Interesting older article and yet relevant and timeless for new traders learning...

  

Pivots are a subjective thing from a trader's point of view, outside that of Market Makers who aim and dictate motion in the market based on specific pivots owing to their agenda and related session.

  

In most cases, retail trading would perceive 17:00 rollover EST/EDT to be the start of the new day.

When a broker sets the server to be GMT +3, the daily bar will correctly end at 17:00 EST.

This is true because GMT + 3 minus EST being GMT -4 there is a difference of 7 hours.  Therefore, when the broker's server ends the day at GMT +3, THAT IS the 17:00 EST end of New York session, regardless if the broker might stop permitting trades 30 minutes prior to rollover or whatever.

So, now that we have some sense of broker's server and global time relative to New York close, how does this play on Pivots?

"Conventional" Pivots are a "calculated continuum" of prior period High, Low and Close, (typical each day, which forms a week, a month etc., each having the same basic formula.

Those values are then processed to a formula to standardize generating the next day's relative Support and Resistance levels, similar on the weekly and monthly events, end of week, end of month etc.

Therefore, no matter what, each new period is a continuum of the price range and final close of the prior period which is why Fibonacci and pivots remain related, generating repeating cycles of patterns day in and day out as a result of market makers sharing those pivot levels as common targets where the bigger primes will inject volume impulses to invite the herd to follow up or down to the next pivot, as Market Makers reverse direction and then grab unsuspecting trader's stops set too close and scoop up profit after reversing their last impulse investment.  This continual action of MM impulse and herd following / consolidation is what forms the common M and W shapes in the market upon which ALL of those shapes and events ARE succinctly tied to SOME relative pivot point, the majority being classical or Market Maker "Pit" Pivots, originally derived by those having floor access at stock exchanges decades past.  It is the larger of the market makers, huge players which dominate the direction and work between Federal banking and governmental / banking objectives, speculating against outstanding interest rates each day, driving the directional characteristics, so the big fish control the pond, ultimately and have an integral link to governmental influence = economic control, (or so they care to feel and desire).

So, now we have a view on what are pivots, how do they evolve, why do they exist, (purpose and function) and now we can consider WHEN should our pivot process begin...

Pivots for retail traders are somewhat "subjective" despite trader agenda and some greater anchoring caused by market makers dominating with conventional pivots.

If and when Pivots are restarted at "Rollover", again typically end of New York session, 17:00 EST/DST, the Asian and Australian sessions open shortly thereafter and begin operations.  These sessions tend to be a smaller influence in the grand scheme and frequently are more deeply present in minors and cross pairs, etc, so many times related crosses and pairs tied to these two economies tend to RANGE in a smaller overall market range.  Not totally, but in general you can see the effect simply by watching the session startup activity after rollover, volume and related Average Range of bars generally starting to move an hour or so after rollover.  This creates the initial trading range and will most times be done upon the basis of pivots having been recalculated at rollover.  Does this influence what happens when London session opens X hours later?  Absolutely, due that London must pick up and carry on the new day's business based upon the big fish working on the estimated open interest values of the new day.  Therefore the London session has no choice but to make primary use of the highs, lows and range established during Asian and Australian daily events having already occurred on the new pivot values after the last rollover.  The important factor here is that London having the largest primary volume in market making, will tend to drive the prior session limits into NEW higher and lower extremes, creating breakouts, TARGETTING THE NEXT pivot levels to begin generating the M and W impulses feeding the stop hunting events the LONDON teams are needing to inflate and speculate.

So, now we have some general understanding of what drives the syncopation of pivots and related Fib levels, integrated to the various sessions where obviously the New York session picks up behind London, rinse and repeat.

Does this mean that London or New York can't employ separate pivots relative to their respective start times?  No it does not.  HOWEVER, recall that each pivot cycle is a continuum from the prior rollover by majority of major influences of Market Makers so while the London or New York MM's might have some custom pivot assessments, they will STILL be algorithmically related to the original, conventional Pit pivots from NY 17:00 end of day rollover, if only by proximity and relationship to prior highs, lows and close events.

CONCLUSION:  By and far the majority of Pivot action will be conventional pivots, recalculated upon the close of the NY session, 17:00 EST with most brokers configuring the MtServer to be GMT+3 so the daily bar end point coincides with NY end of day.  One needs to Google some learning of session times, GMT conversion and other related fundamental data to understand this well or especially any deviation from conventional.  It CAN be and does get confusing for those new to understanding the entire process.  The alternative which does give a sense of comfort for new traders is that you can place a pivot tool on any intraday chart (and providing the pivot tool has an adjustable start time), you can adjust the pivot tool start time and visually SEE the relationships of when markets do in fact end up matching major moves turning like a dime or consolidating on these pivot levels, and FIND the difference of where YOUR broker's server time base is correlating most accurately to a given offset.  Kind of a trial and error, hunt and peck process.

In the most practical sense, one doing day trading on intraday charts will want Daily and Weekly Pivots with AT LEAST S/R levels 1, 2 and 3, if not also 4th level and make certain the pivot tool offers "mid point" pivots as well.  Market makers will frequently bounce intermediate retraces on these mid points and when a market is trending well these become critical in understanding stop loss placement and trailing strategies to know where to reduce or add positions and manage trades for longer term success.  The bigger the account, the bigger the time frame you can safely endure and ultimately work toward hourly bars even with great success, some day hopefully daily bars, long term trading.  There is inherently less "noise" on higher time frames so the larger time frames tend to be less frantic but again, most will find their account level is what drives which time frame and lot size you end up managing the majority of the time.  Pivot points are therefore always the same on all time frames, except that day traders below Hourly will want to watch mid point pivots more cautiously for aggressive day trading management on smaller accounts.

Is this the ONLY explanation of Pivots?  No and certainly others may inject specific opinion.  Regardless, having a basic knowledge of large banking initiative working against open interest which drives the greater agenda down stream each day, is the start point of all Forex activity of major consequence leading to integrity of rollover timing of pivots being the MOST succinct path to understanding market motion and how to position among it for success.   Study it patiently and form your own impressions to use it all as best suits the style of trading you want to pursue.  The greatest investment is not your grandmother's 401K, driven to loss by greed, but rather the investment of TIME YOU spend PATIENTLY learning how things REALLY work and avoid less accurate opinions common among many forums given to imagination or invitation to lure the unsuspecting into false impression.

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