Do you Believe in 4 hr/Daily bars? | Forex Factory

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Do you Believe in 4 hr/Daily bars?

  • #1
  • First Post: Apr 21, 2009 2:48pm Apr 21, 2009 2:48pm
During some recent trading refection I found myself doubting the existence of 4 hr bars and daily bars. We all use difference brokers and live in different time zones and we all trade forex, BUT it would seem that there is rarely an agreed upon time of day when 4hr or Daily bars begin/end.

Different times of the day have different meanings to each trader and each trader views his own point of view as the most important. So who's to say any trader is wrong in valuing a certain time of day. Circular I know.

Here's my point.

Is not the 1 hr bar the most important bar? It appears to be the longest TF that everyone sees the same (Depending on the brokers prices).

Personally I prefer longer TFs, but now I just zoom out on the 1 hr TF to see what is really going on.
  • #2
  • Apr 21, 2009 3:24pm Apr 21, 2009 3:24pm
Quoting blueace
Is not the 1 hr bar the most important bar? .
Well, it somewhat depends. Unless there is some kind of an edge gained by seeing what others see... then, I suppose?

Quoting blueace
It appears to be the longest TF that everyone sees the same on.
Well, not really. The differences on a weekly and monthly graph will likely be extremely minimal? EDIT: But these are quite high!

I am assuming that you trade off of price action? As such, I do see the logic of using 1 hr graphs over 4hr graphs or daily. Then again, one has to wonder, does seeing the graph the same mean anything, or is trading price action really just one trader figuring things out about "how to" rather than "when to"?
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #3
  • Apr 21, 2009 3:33pm Apr 21, 2009 3:33pm
I do in fact trade off of PA, but pick certain points in time and straddle. I don't speculate which direction anything will head. I'm usually dead wrong. Even my educated guesses seems to be undone by the forex beast.

Well said about the weekly and monthly TFs though. They would in fact be bars that nearly all would see the same.
  • #4
  • Apr 21, 2009 3:48pm Apr 21, 2009 3:48pm
"but now I just zoom out on the 1 hr TF to see what is really going on"

This part pretty much summarizes what's really important about price action on any chart in any time-frame. The start and end of Daily and 4Hr candles don't affect what the price action is telling you.

When the market fails to break a support/resistance area of any kind (whether it's a big round number that's historically held strong like the 1.3000 zone on USD/CAD or a diagonal trend line that's held for the past few months) it's all the same picture regardless of what hour your daily/4Hr candles begin and end.

The time zone might make the difference between seeing a pin bar/shooting star pattern or a "railroad tracks" pattern on the daily, but these patterns all mean exactly the same thing: the market failed to break the S/R zone.

Daily/4Hr bars are just "compressed" versions of the same information you're seeing when you zoom out of a 1Hr chart. In some cases, the minute details just aren't necessary for a trade decision so you can use any of these charts (Daily, 4Hr or a zoomed-out 1Hr) because they would all confirm the same thing: either the price area broke or it didn't.

For longer term trades, I just look for areas where it's safe to place a stop outside of an unbroken zone (support/resistance) with a little extra buffer room in case of news spikes. I only take trades where the target can realistically be attainable and is at least the size of (preferably bigger than) the said stop. By realistically attainable, I mean there isn't a major obstacle on the way there (unbroken trendline or area where the market repeatedly stopped and reversed when it was reached in the past).

None of these criteria would change regardless of what time zone your 4Hr and Daily candles begin and end; either price has bounced off a level or it didn't.

If your trading method actually depends on a pattern that actually tells you something entirely different just because the time-zone is different for 4Hr/Daily, then there's a sign you might want to reassess your method.

A broken level is a broken level, and a bounce is a bounce, in any time zone.
  • #5
  • Apr 21, 2009 4:01pm Apr 21, 2009 4:01pm
The things that matter wont change from broker to broker mate.

One person may be seeing a 4hr Pin Bar, another may be seeing a Bearish Outside Bar, or a Double Bar Pin. Either way, price action will reflect the same market behaviour at the same levels of support and resistance. The only difference will be the name you apply to the reversal/continuation pattern.

So dont worry if one guy gets a MEAN Pin bar, and your getting a tweezer top (double bar pin) or even an inside bar thats broken down after a long ranging bullish bar... the point is price was rejected from the same level, within the same period of time, over the same range.

Cheers,
MM
"If it bleeds ... we can kill it"
  • #6
  • Apr 21, 2009 5:18pm Apr 21, 2009 5:18pm
... and that's if you are using pivots or range/session based indicator which is reliant on daily candle times. Having done some extensive research into pivots for a system I was trying to develop, pivots are highly subjective if you use them with 4 hour and daily candles, which as you rightly pointed out, are subjective to timezone and broker offset.

I occasionally still use pivots to check for convergence on my fibs and SR lines if I am unclear. It has been my experience that if you do use pivots, to use a pivot indicator which you can offset your broker time against 00:00 EST. Either that or to recalculate your indicators using 1 hour candles.
  • #7
  • Apr 21, 2009 5:33pm Apr 21, 2009 5:33pm
I know where you are in your learning-curve because I remember asking myself the same question some time ago.

I had major issues accepting a single bar-formation even on daily charts because it could depend on different feed and the brokers end-season time. But thats a personal belief.

I'm happy to have moved away from strategies depending on single TF's and the only timing I have to worry about now is currently season, nothing more, which make way more sense to me at least.
Measure twice, cut once
  • #8
  • Apr 21, 2009 5:44pm Apr 21, 2009 5:44pm
Quoting aediaz1

I had major issues accepting a single bar-formation even on daily charts because it could depend on different feed...
Agreed.

Quote
... the only timing I have to worry about now is currently season, nothing more, which make way more sense to me at least.

Please define season... do you mean seasons of the year, fiscal end of year, or something else altogether?
  • #9
  • Apr 21, 2009 8:12pm Apr 21, 2009 8:12pm
Quoting aediaz1
I know where you are in your learning-curve because I remember asking myself the same question some time ago.

I had major issues accepting a single bar-formation even on daily charts because it could depend on different feed and the brokers end-season time. But thats a personal belief.

I'm happy to have moved away from strategies depending on single TF's and the only timing I have to worry about now is currently season, nothing more, which make way more sense to me at least.

Well honestly I'm not worried about the daily or 4 hr TFs. It was just an observation. I primarily trade on a weekly TF. I find that any system based on a shorter TF than daily means lots of screentime. I'm not a screentime kinda guy anymore. I've logged more hours than I care to admit, but I appreciate everyone's opinion and point of view.
  • #10
  • Apr 21, 2009 8:25pm Apr 21, 2009 8:25pm
Quoting blueace
During some recent trading refection I found myself doubting the existence of 4 hr bars and daily bars....
You have a point which I agree because D1/H4's fractals are different among brokers. To over come it, I will zoom in to H1 to fine tune the exact point to draw trendline before any trade taken place to increase entry accuracy. I will still view H4 most of the time unless it gets near the trendline. Hope you find it useful, feel free to chip in other opinions/methods.
  • #11
  • Apr 21, 2009 11:40pm Apr 21, 2009 11:40pm
There are certain daily trade and 4 hour trade time frames that are better than others.

The three are:
London time. (start both daily and 4 hourly at midnight)
New York time. (start both daily and 4 hourly at midnight)
Tokyo time (not as good as the 1st two).

Euro and Swissy time zone does not work because there are different time zones within that zone, and banks across the zone open at irregular hours, depending on which country.

Some of the euro zone banks actually open at the same time as the London banks, raising the importance of the London time.

Make sure you take into account day light savings of London and New York for the daily and 4 hour candles. Especially at change over dates of march and october / november.
  • #12
  • Apr 22, 2009 12:12am Apr 22, 2009 12:12am
To further add to more inaccuracy of trendlines, some brokers has additional daily candle(s) for weekends if anyone here noticed before. Not sure how to overcome this to get more accurate trendline drawn. Any experienced old time care to share?
  • #13
  • Apr 22, 2009 12:19am Apr 22, 2009 12:19am
After being with IBFX for some time... I learnt that you can ignore the small sunday daily bars that are produced, if you are just analyzing the bars.

If calculating pivots etc...

END of week for weekly pivots, should include Sunday as the end of week and if a weekly high or weekly low is found there that should be included as well.
END of Friday for daily pivots, should include Sunday trading for its calculations.
  • #14
  • Apr 22, 2009 1:47am Apr 22, 2009 1:47am
I think you could Think in Session (Asian, European, American).

Forgive me the pun!

Lubo.
If I know how, I tell You!! Few but Good!!
  • #15
  • Apr 22, 2009 1:50am Apr 22, 2009 1:50am
Quoting Limstylz
Agreed.



Please define season... do you mean seasons of the year, fiscal end of year, or something else altogether?
These are the 3 sessions; Asia, Europe and NY (I just noticed I had written season). I.e I make sure to not open any position with gbp/usd during Asia since both Euro and US are "closed". But this isn't something new

I also keep an eye on how much a currency have moved during each session. If I wake up for Euro session to see Asia have formed a currency's whole average daily range during those 6-8 hours, there's a great chance to see the market range throughout rest of the day. Just one out of many cycles that are highly visible on your chart.
Measure twice, cut once
  • #16
  • Apr 22, 2009 2:04am Apr 22, 2009 2:04am
It isn't the shape or magic of the bars that matter. It's the price action that occurs within them. A v-bottom is a v-bottom regardless of what timezone offset you're using. Rejection is rejection, acceptance of value is acceptance of value. A down trend is a down trend, an up trend is an up trend. A swing high is still a swing high, a swing low is still a swing low.

The map is not the territory. You've got to get behind the map to figure out the sentiment that's driving the market. Until then, you're fishing in the wrong pond.
  • #17
  • Apr 22, 2009 2:37am Apr 22, 2009 2:37am
Quoting blueace
During some recent trading refection I found myself doubting the existence of 4 hr bars and daily bars. We all use difference brokers and live in different time zones and we all trade forex, BUT it would seem that there is rarely an agreed upon time of day when 4hr or Daily bars begin/end.

Different times of the day have different meanings to each trader and each trader views his own point of view as the most important. So who's to say any trader is wrong in valuing a certain time of day. Circular I know.

Here's my point.

Is not the 1 hr...
I totally agree that the highest time frame that will show the same price action - candlestick or bar formation is the hourly. However IMO, the actual Price Action itself in relation to prior highs / lows is more important than the individual bar / candle and may often be seen more clearly by dropping to a lower TF. Also, the volume of the bar / candle is of great importance,,,,,,but that's another subject!

Regarding trading periods, the most active hour by both transactions and volume is currently from 3am - 4am EDT / 7am GMT - 8am GMT. At this time the Asian markets in Tokio, Hong Kong and Singapore are still open and all of the European markets have opened......Frankfurt, Zurich etc at 2am EDT / 6 am GMT aka the Frankfurt Open followed by the London Open an hour later at 3am EDT / 7am GMT.

Many major pairs will often have their daily highs / lows within ~2 hours of FO....http://www.forexfactory.com/images/icons/icon12.gif
Trading Levels with WRBs
  • #18
  • Apr 22, 2009 3:58am Apr 22, 2009 3:58am
The issue does not arise if you don't use TF based Bar.

Lubo.
If I know how, I tell You!! Few but Good!!
  • #19
  • Apr 22, 2009 4:21am Apr 22, 2009 4:21am
Yes, I have been studying Igrok's techniques closely myself and building session range indicators is yielding good results.

Quoting aediaz1
These are the 3 sessions; Asia, Europe and NY (I just noticed I had written season). I.e I make sure to not open any position with gbp/usd during Asia since both Euro and US are "closed". But this isn't something new

I also keep an eye on how much a currency have moved during each session. If I wake up for Euro session to see Asia have formed a currency's whole average daily range during those 6-8 hours, there's a great chance to see the market range throughout rest of the day. Just one out of many cycles that are highly visible on your...
  • #20
  • Apr 23, 2009 7:06am Apr 23, 2009 7:06am
Quoting LuboLabo
I think you could Think in Session (Asian, European, American).

Forgive me the pun!

Lubo.
No actually did mean London and New York, because European session can sometimes imply when the Eastern European banks are opening or when their midnight passes.

However, London means that you are going via British Standard Time (and their daylight savings during the northern summer) and New York implies their midnight, opening and closing as opposed to that LosAngeles and Seatle (USA West Coast) midnight opening and closing.

You will find that NY and London are important as their day candles from midnight to midnight and their openings (8am) and closings (5pm) are more important than West Coast USA and Eastern Europe. This is because they have most of the largest banks and are by far the largest business centres in the world.

Rarely does Europe or West Coast USA make a significant change in the markets as the trading day beginning (8am) of the London and New York times do.
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