OMG! I discovered the correct Forex Daily Pivot time zone!

It didn't really bother me that daily pivots didn't seem to work at all in Forex as I never really used them for anything anyway... The odd thing that was a head scratcher was that I had a memory of daily pivots actually having a market reaction in ThinkOrSwim years ago...

Tonight I was messing around and switching time zones on my charting program and realized... Everything everyone is doing in US equities runs off EST! But, what time zone is the center of global financial activity in Forex?

First I thought... Hmm... Most Forex volume is traded in European session... Maybe London... Kinda matched up, not perfect though... I noticed the daily candle open/closes in my FXCM feed were not matching up perfectly to London time... One hour off...

Then I realized... It is BRUSSELS!!! Viola!!! Perfect... Daily pivots are working as resistance areas consistently again!!!


I forget exactly why Brussels is the center of of the world when it comes to banking... It rings a bell though.

Doh... The lesson learned is... Switch your charting program to the proper time zone for the instrument your trading. Stupidly I had SierraChart set to EST for my Forex charts when it should have been set to Brussels. It was definitely a bit of a head scratcher to me why weekly/monthly pivots were very strong for the EUR/USD and daily didn't have any reaction.

nope, the center of global financial activity is London but nice try...

pivots are nothing but a quick volatility calculation

(H+L+C)/3= average of yesterdays price

2*pivot point-previous low= 1st resistance
2*pivot- high= 1st support

you could use S/R, S/D, or σ*2 and you get roughly the same result...you could take statistical data and quantiles on range h-l and you get an idea, or take the ATR. there is no magic hidden secret here.

Nothing magical about it. Different traders will swear by different timezones/hours. For me the correct time to calculate pivots is NY session close (10 pm GMT) as that represents the 'end' of a daily trading session from a north hemisphere perspective.

Well... Bought some euros after bouncing on the pivot for a while with a buy signal. Solid trade!

Timed the bottom within a pip. Works for me!

Still would have gotten the trade even without pivots, but it definitely does help time entries/exits and pivots predict otherwise unexpected sudden market rips from traders pushing massive orders through on pivot tests.

One of the funniest market reversal I ever saw on the /ES was when a goldman sachs trader came out on the floor and sold 1000 cars exactly at the weekly pivot and set the exact market top for a week... LoL!

I have monitored pivots extensively across different timeframes. Yearly pivots are physiologically important enough for traders that they can cause trend changes for weeks. Monthly and weekly pivots trigger trend changes for a few hours at most. Daily pivots can cause trend changes for around 30 minutes to a hour and a half or so.

Depends upon momentum levels but that is usually how it goes.

Even though this is a really good reaction to YS1... Things are going to get rough in the EUR/USD and well get a retracement before a push toward 1.3378 and potentially a final breakout toward 1.3898 as fear of the US fiscal cliff begins late in the year.

don't know what calculation you use for pivots but there is no pivot there on any offset

Most people don't have the correct pivots formula. Heck... SierraChart comes with like 20 pivot formulas and none of them were the proper formula.

If you have the proper formula the market will turn at the levels to the pip exactly during low momentum non news driven markets a statistically significant amount of times within a short amount of time. Thats how you confirm your formula is in sync with what the alogo's and automated trading systems are using.

I actually use a special projection system for estimating entry/exit price levels at my signals... But, things are definitely a lot easier with proper pivots too. Without proper daily pivots I definitely can see where I missed out on a few good trades in just the last week where pivot strength overrided my projections.

If you don't see a statistically significant amount of precise to the pip or within a couple pip accuracy price turns on your daily/weekly pivots... Inside two days of price action... You have the wrong formula, or the wrong time zone...

Anyway... Nice to have my daily pivots working in Forex. Better than just having weekly and monthly!


And no... Brussels time zone is correct. London is not. Price turns and price reactions are not nearly as precise basing pivots off of the London time zone.

if NO ONE has the proper formula then NO ONE is using them then THEY ARE IRRELEVANT.

you forget participants move the market in search for allocation and equilibrium.
no one sits there with a hidden formula that can predict price movement.

if that was the case then the market would be independent of orders transacted....I do not see that being the case.

The automated alogos and the banks use this pivot system.

Anyway... It also matches with another system a large amount of professional traders are using. A large amount of people are using these pivots without realizing it.


It only really matters what system the big cats are using. The 95%? Who gives a damn what trading system they are using. They don't matter. Salomon brothers back in the day use to control certain currency markets completely. Banks still control currency pairs to this day to a large degree.

Quote from market wizards:

"==== How does your current trading for your own management firm differ from your trading at Salomon?
====
At the moment, I'm trading a lot smaller than at Salomon, which is a disadvantage.
==== How is large size an advantage? You're kidding. ====
No, I'm serious.
If a big buyer comes in and pushes the market 4 percent, that's an advantage.
He still has to get out of that position. Unless he's right about the market, it doesn't seem like large size
would be an advantage.
He doesn't have to get out of the position all at once. Foreign exchange is a very psychological market.
You're assuming that the market is going to move back to equilibrium very quickly-more quickly than he can
cover his position. That's not necessarily the case. If you move the market 4 percent, for example, you're
probably going to change the market psychology for the next few days.
==== So youre saying size is an advantage? ====
It's a huge advantage in foreign exchange."


The rules that the big cats follow shape and control market patterns and trends.

One of the things I love about the S&P 500 is that it follows a precise range break and time ruleset in it's trading. This rule-set was designed back in the 1930's or so when the first groups of people started to control and manipulate stocks.

They attempted to outlaw it but once the manipulation ruleset was in place it became permanent in US markets. US stocks markets move like no other markets...

If you read George Douglass Taylors book you will start to understand some of the keys to why the market is manipulated in certain patterns and how this benefits the manipulators.

you are making the assumption that one big cat controls a monopoly in the currency market.


demonstrate how that is so.....in my opinion there are many big cats, and all the cats are after their own interest.

do you understand how the 95% affect price and through which mechanism?

One of the things that is very annoying in this market is that knight capital and other firms nowadays run small stocks and don't allow new guys in to control them.

A few years ago I was experimenting with manipulating small active penny stocks.

With a mere 200k you could easily set tops and bottoms and trigger multi hour trends. One penny stock (ARDM I think I remember...) Was starting to slow down in it's uptrend so I sold 100k at market and the volume of the order scared everyone in the stock into a four hour downtrend while my order only slipped a couple cents. With big orders at specific locations you can set market tops and bottoms where you want them.

The advantage of following a set ruleset is that others follow the big players around and reinforce their manipulation pattern.

The 95% is just acts like a drifting pinball readily having their emotions being set into motion in a direction at the will of bigger players through the entire trading session.

It only takes one good poker player to dominate an entire table.

Hey MG do you still use Brussel's time zone for your pivot point calculations? I thought 5PM EST was the most used time. If you use Brussels time, do you use 0:00 CEST (Central European Summer Time) Brussels or their FX market open time which would be like 8AM CEST.

The most important central Bank of all is in Brussels.. so it makes sense.

I second that. Its not about location or anything. Using this timezone is eliminating the sunday candle this is imho the reason it IS the correct timezone

more info: http://www.learntotradethemarket.com...k-close-charts

Same here. Daily pivots are meant to reflect an average of the previous trading day. It makes sense to me, to calculate the average from the start / end times of the previous global trading day. That takes place at the end of the NY session, aka 5PM EST.

If someone thinks the results are better using something different then all the more power to them. But it bothers me a little when they start being dogmatic about it, like the OP was. From what he wrote, I wouldn’t be surprised if he was a little mixed up about chart times and pivots. He should have tested for more than 1 day before concluding he had a great discovery.