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Pivot points

  • Post #1
  • Quote
  • First Post: Jul 19, 2007 11:45am Jul 19, 2007 11:45am
Hello all,

I was hoping somebody would be able to tell me what is the generally accepted time to use for the close when calculating daily pivot points in forex. Obviously you can use any time but I want to be looking at the points that most other traders are looking at.

Thanks in advance,
Agro
Thanks mate.
I have also noticed that some traders use pivot points calculated on each specific session as the trading rolls from nation to nation, is this a common practice?
Quoting Agro
Thanks mate.
I have also noticed that some traders use pivot points calculated on each specific session as the trading rolls from nation to nation, is this a common practice?
I don't think its common. You can try it as I have and find that, while you may find a second set of pivots that price respects it's not worth the trouble, as a good ol' HLC/3 calculated from 1700 EDT will be respected throughout the day.
Thanks Taters.

More out of interest really, I am actually even reluctant to add the daily's (only use weekly's curently) to my charts - can't stand clutter.

Agro
In Boris Schlossberg' book he mentions using Asian / European / US trading periods to calculate intraday pivots.

My opinion is pivots don't work as well on currencies like other markets.

Although daily or intraday pivots work some of the time, I just think it adds clutter to a chart. Because what about weekly pivots and previous days/week H/L/C, Fibs, etc etc.
Thanks Sun

I thought that many must use these points, and agree with you on the clutter issue. But I must say that in my experience, the weekly pivot points (I can't speak for the dail's but I suspect they will be of the same nature) in forex are extreamly helpfull, and whilst I cannot make the comparison to other markets as I have little experience in short term trading other than in forex, I must say that if other markets are comparably better then they must be phenomenol.

Agro


ps Please excuse my spelling as I can't spell, but also can't be bothered downloading the spell chek.
  • Post #7
  • Quote
  • Edited 11:57pm Jul 19, 2007 5:44pm | Edited 11:57pm
Clutter is an ongoing battle for me and the dailies really add to that... I now have a daily pivot indicator that I can switch the pivots and/or midpoint on or off. It also shows other info like hi/lo & open of prev. day so its quite useful. I generally leave it off these days and only switch it on if price is doing something funky in a weird area ( Oh its R2...) but I do keep a central daily pivot pivot on the screen to keep my up down bias. (or maybe trade a bounce!) There is an example of a nice clean chart here that has the daily pivot in red with MPs and WPs.
I put out a call to program an DP-R1-S1 based on the indicators here but no takers so far. I may just pay to have it done but it's off the front burner right now.Clean! Anyway I think you get way more "bang for the buck" if you can sit tight and wait for a good WP or MP level rather than daily. Almost the same risk, much greater reward.
2nd link is coming up as report post. Was it for an outside website? Otherwise it needs editing to correct link to the right page.
Quoting SunTrader
2nd link is coming up as report post. Was it for an outside website? Otherwise it needs editing to correct link to the right page.
ok- link is now be fixed.Thanks-
-T
Agro,

in general, I use 17h00 (NYC time) for majors, but one bust not forget that US forex market is 20% of total volune, while London is ~30%, and Frankfurt/Zurich is 10% of total volume.

That is why some gurus recommend to use domicile market closing time to calculate pivots. I.e. for GBP you may want to use 17h00 London time and for EUR crosses 17h00 Fankfurt time.

Other alternative, if you trade during the EU market hours, you may want to use London closing time for calculating pivots. And/or if you trade during NYC market hours use NYC 17h00.
Thanks tatters

I have never used the monthly's, but am interested. Could you pls tell me the period that most traders would calculate the values with, is it the calander month or every four weeks?

Also, could you pls tell me what the chart you have posted is of. Correct me if I am wrong, but it looks like the EUR/JPY with volume! But this can't be - can it?

Thanks
Agro
Thanks Tok

I thought that many people would use this method and I will play around with these values, but my main goal is to find the pivot points that nearly all traders that use pps will be using. It is very tempting to add as many values as I can find to my charts, but I have learnt long ago that more is not always better.

Agro
Quoting Agro
Thanks tatters
I have never used the monthly's, but am interested. Could you pls tell me the period that most traders would calculate the values with, is it the calander month or every four weeks?Also, could you pls tell me what the chart you have posted is of. Correct me if I am wrong, but it looks like the EUR/JPY with volume! But this can't be - can it?
Thanks
Agro
For monthlies use the actual month. Otherwise you may end up changing your "monthly" pivots in the middle of the month-not a good idea. In the financial world (IMHO since I'm a pajamas guy) they are thinking yearly, quarterly, monthly weekly.So don't think of pivots as some magic number. Think of them as "where would the 'big dogs' want to place an order,take profit, or project a target.
Yes it is EURJPY with volume, but it is "tick" volume -not actual money/shares vol like in stocks. Its all we got in Forex unless you want to get into options open interest and the like. If you have MT4, volume is a standard indicator. I'm trying to get a feel for using it even if its half-assed because it can offer a window into the strength or weakness of a move. If price is going up but fewer people are buying I dont want to bid against fewer and fewer people. If I "win" and am the final buyer then congratulations- I've just bought the top because there's no one left to buy.
One thing about pivots is that when you start to use them you need to back test. They are not like a MACD that just averages the last 12 & 26 candles the same for everybody. Pivots can be calculated in different ways and different times but they don't all work. That's why some people think it's just "throw enough lines on the chart and you're bound to hit something".Hey it's fine with me if they think that (heh heh) but if you take the time to try all the different time possibilities and all the different calculation possibilities (HLC/3, OHLC/4, Fib pivots, Demark pivots etc etc you will find many that are close, but stick with it and you will eventually find one that nails price to the pip. And that will be your well earned secret.
But for now just use HLC/3 @1700 EST.
Quoting Taters
For monthlies use the actual month. Otherwise you may end up changing your "monthly" pivots in the middle of the month-not a good idea. In the financial world (IMHO since I'm a pajamas guy) they are thinking yearly, quarterly, monthly weekly.So don't think of pivots as some magic number. Think of them as "where would the 'big dogs' want to place an order,take profit, or project a target.
Yes it is EURJPY with volume, but it is "tick" volume -not actual money/shares vol like in stocks. Its all we got in Forex unless you want to get into options open interest and the like. If you have MT4, volume is a standard indicator. I'm trying to get a feel for using it even if its half-assed because it can offer a window into the strength or weakness of a move. If price is going up but fewer people are buying I dont want to bid against fewer and fewer people. If I "win" and am the final buyer then congratulations- I've just bought the top because there's no one left to buy.
Thanks taters, very helpful.

How true your first statement is, I can asure you I do not treat any point in technical analysis as magic, I just look for probabilities. Thats why I like to know what the generally used periods are, so I can be sure I am getting maximum activity at these levels.

I have heard of these tick volume indicators. Would you mind explaining them to me, I guess that they just count the number of tick movements per period.

Thanks
Agro
Taters, you are making very good observations.

The key question is what pivots are used by the big dogs.

Argo,

First decide which currency pairs you want to trade, then what market hours and finally what pivot point levevels.

At the risk of repeating myself, the big dogs trade from London (30% of total forex volume), then NYC (20%) and Frankfurt, Paris & Zurich (10%). However, collectively, European session (LON + FRA + ZUR + PAR) volume is double of the US volume.

So the question is during what market hour (time-zone) do you trade and actively COMPETE FOR PIPS AGAINST THE BIG DOGS. You would want to see what they are watching...

One more thought. If you are scalping with 5-min or 15-min charts, trade with daily pivots. If you take position trades over few days, watch weekly & monthly pivots. I trade 10-min charts and use Daily Pivots as of 17h00 NYC time.
However, if you trade during the European session, you may just want to check the London daily Pivots, at least for the GBP crosses.
Thanks Tok,

Very helpful info there, much appriciated

Agro
Hey guys,

Hmmm, now I have many different brokers quoting many different weekly highs on USD/JPY due to that oppening gap.

Any suggestions on which value to use?
Regardless of a gap the weekly high is still the weekly high. I have 121.689
  • Post #20
  • Quote
  • Last Post: Jul 30, 2007 1:16am Jul 30, 2007 1:16am
Thanks Sun,

Oanda is showing 122.175, deltastock ~ 122.00, fxcm ~ 121.70 etc. This is where I am confused.

Thanks
Agro

ps - where I say that the different quotes are due to the oppening gap, I just mean that I am assuming that the different quotes resulted from confussion amongst brokers as to where to quote prices due to the extreme price action
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