Article Pivot Points in Forex

[T2W Bot]

Pivot points can be a useful tool when trading the forex enabling the trader to see where the price is in relation to the previous market movements.
It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade.  Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.  As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from ?bull? to ?bear? or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the...

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[PKFFW]

Whether you believe in PP's or not it's a well written brief intro to their use and calculation.

I like the idea of the previous highs and lows being used instead of S1, R1 etc too. Will be interesting to do some testing on that.

 

[fxchant]

The trick to pivot points in forex is that it is a 24-hour market, so the calculations have to come from the proper set of data.

 

[barn_burner]

Timeframes

The trick to pivot points in forex is that it is a 24-hour market, so the calculations have to come from the proper set of data.

So what period do you recommend for selecting data to make the calculation?

 

[fxchant]

So what period do you recommend for selecting data to make the calculation?

The way that I have been taught, 5 pm EST is the cut-off time, Use the prior 24 hours of data.

 

[Trdr]

Believe the 'cut-off time' — ie end/start of the new trading day is 6pm EST.

I don't use PPs however some traders setup pivots based on the particular
currency and that currency's country specific 'opening' time.

 

[fxchant]

Believe the 'cut-off time' — ie end/start of the new trading day is 6pm EST.

I don't use PPs however some traders setup pivots based on the particular
currency and that currency's country specific 'opening' time.

Actually, the difference between 5 pm EST and 6 pm EST would be minor because most world markets are closed at that point, which is why it is the key cut-off time for calculations. However, most of the non-dealing-desk platforms that actually have to pick a time to clear trades choose 5 pm, which is presumably the logical time then for end of day calculations. I think they picked that because it is the least active moment statistically in FX.

 

[Trdr]

Actually, the difference between 5 pm EST and 6 pm EST would be minor because most world markets are closed at that point, which is why it is the key cut-off time for calculations. However, most of the non-dealing-desk platforms that actually have to pick a time to clear trades choose 5 pm, which is presumably the logical time then for end of day calculations. I think they picked that because it is the least active moment statistically in FX.

Actually 5pm is the time used to calculate and apply interest to open trades —
'settlement/rollover' — the logical final hour before the next trading day
suggest you check a 60min chart to determine the time/date change and
which hour is on which Daily Price bar

 

[forexproject]

This is so subjective, I don't know if the author could even answer these questions. Use your best judgment from your own observations.

 

[barn_burner]

This is so subjective, I don't know if the author could even answer these questions. Use your best judgment from your own observations.

There is a pretty good study over at Tradesight about this stuff. They did a lot of research on the various times of day to use as end of day.