forex charts especially eod

[charley88]

hello t2w

i dont understand how the charts r recorded, especially daily charts. Forex being 24 hr market, when does open/close start/end? plus forex has no exchange.
for instance, tokyo markets open/close 0.00/9.00 gmt.
london markets open/close 8.00/17.00 gmt.
example will be eurjpy. this pair will be traded on both markets, right?
so how is the daily open/close charted for the eod charts? do they use prices from tokyo or london or does it not matter?

please advise, thanks
c88

 

[gc1]

The simplest is to consider each day to "end" at whatever time rollover adjustments would be made if a trade is held past that time - often 5pm NY or 10pm London which also matches when the CME FX futures contracts close each day (4pm CST, opening for the next day at 5pm CST, 6pm NY, 11pm London). Then each week is exactly 5 trading days long since Sunday evening is part of the Monday session. However if you want the "open" to be more significant then a different day start/end time is more appropriate, such as London hours. Each week is then 6 bars long because of Sunday evening.

So, "it depends".

If your're using free charts then your probably locked into whatever the chart vendor considers to be the day start and end times, often midnight either GMT or CET.

 

[GammaJammer]

Doesn't matter. It's all one big 24 hour melting pot. There's no official 'open' or 'close' as far as pricing is concerned. There are a few conventions that people observe when working limit orders for example (i.e. they know that when you say 'good till NY close' it means 5pm ET for example), and the interbank community has certain conventions for when the spot value date switches over etc etc, but it's still seamless in terms of trading. No-one rings a bell or whatever at 5pm in NY and everyone gets up and leaves. It's a basically 24/5 99.9% otc market.

So the charts can reflect different values depending on who your data provider is and how they arrive at that price.

Fortunately this isn't a big deal because there is no 'official' price at any one time. I can be trading usdjpy at 90.85 at the same time as someone in an office 30 seconds walk from me is trading it at 90.95, depending on what we're both doing etc. The only time it really matters is when barrier options are being triggered, when both the buyer and seller of the barrier need to be clear and in agreement about the criteria used to trigger a barrier event. Disagreements of a heated nature can and do occur. But as for someone looking at a short term chart, a pip or two here or there really isn't at all relevant.