My question is fairly simple. I have been using the PP from 5pm since I started. I had the impression these were the most commonly used and thus the most respected by the market. It seemed logical to me that these would be the best points because they would include all the data from the last days sessions. Meaning the same day for all three markets. I recently had someone tell me they use PP from the London session and another who uses the Asian session. What are the most commonly used lines? What time should the points be calculated at?
By "PP's" I'm assuming you mean Pivot Points. If so, it doesn't matter what time frames you use, and it doesn't matter what formulas you use, either. Most charting packages have pivot points in their charting software, you can find the information on the web for how to calculate them, and the OHLC of the session you are trading are the calculations you should use.
I'm curious why it doesn't matter what time frame you use or how you calculate them. I thought one of the reasons that PP were important was because everyone is looking at them, especially in fx. If everyone was looking at different levels how would that work?
Hi bkveen, I assume by 'time frame' you mean which session's closing time is used to define the single day period for calculating the pivot points? I use 5pm EST as the end of day for my pivot points, but some traders refer to all sessions and just swap over as each one opens and closes. You may just want to observe and see which ones are useful to you. Just bear in mind that the more lines you have on a chart, the more likely it will appear that any one of them is coincidently a 'support' or 'resistance'.
I was asking what time you use to define a day. I am currently using 5 pm as well because it encapsulates all three trading sessions. They seem to work for me. I don't want to many lines though because then they don't hold as much significance. I may just do a study to find which TF holds true the most. I like 5pm so far though.