Forex Pips Tracker

AS I delve more into daily Forex trading versus the light speed 5 minute trading world, I came across a unique problem. When does a daily candle (or bar) start?

Let’s regress a bit for those readers just starting out in Forex and totally confused as to why the start time of a daily candle matters. Lets look at two traders : Joe and Sandy. Joe is just starting out and heard about a great new Forex trader , Sandy, that has some training opened. Sandy trades on a daily chart and occasionally looks at a 4 hour chart.  Joe listens to the training, studies hard and executes a few trades on his own.  He looses a ton of pips and does terrible. When he comes back and compares them to Sandy’s, Joe finds that Sandy did great.  His techniques are perfect, but the trades are different.

Sandy’s broker charts use GMT (Greenwich Mean Time), also known as Coordinated Universal Time (UTC). Joe lives in Chicago and his broker uses Metatrader. His time is set to the GMT –  3 hours (New York Stock Close). Joe’s charts look slightly off; his opens, closes, highs,lows do not look exactly like Sandy’s.  So when he does his calculations on when to buy and sell, they are way off. What’s going on?

The time that is utilized to create the charts is typically controlled by the broker and the platform. At the time of this writing, I’m using Metatrader 4.  The Metatrader that I use is on my desktop and connects to my broker’s computer. This computer, called the Metatrader Server, is set by my broker. In my case, to the GMT –  3 mentioned above. Metatrader 4 doesn’t allow the user to change this time. As a result, the daily bars that I see might be different than someone else’s daily bars.

There are a number of potential solutions to the problem.

The first would be to find a new broker that based their Metatrader 4 on GMT or the time frame desired. Many of the brokers say they do but they might base it on GMT –  3 or some such time shift. It pays to ask your broker at what time the daily chart starts in relation to 0:00 GMT. Keep in mind that the chart on Metatrader will always start at 0:00 . However, this is in respect to the start of the day, not GMT. Days always start at 0. If a broker’s server starts their day at the appropriate time, there are no changes that need to be done.

The second method is to use a third party add-on to your platform (i.e. Metatrader). Doing a quick google search on “adjusting time on <your platform>” will help you locate what , if any, add-ons are available. Here’s a great thread on ForexFactory that discusses Metatrader time change. The disadvantage is that they are pretty ugly to use.

Finally, there might be a different platform that can be utilized with your broker that will provide offsets or use different time zones. Sometimes your broker will support Metatrader but offer other platforms. For example, FXCM currently supports Metatrader but offers their own “Trading Station” platform. Their own platform allows setting of the time to GMT or a number of other common times.

Keep in mind to make lots of pips, when dealing with daily charts, that both you and the methodology you’re using truly know what time it is.

(With apologies to a great old song by Chicago)

I think everyone has one. It’s the top dresser drawer for me. It’s got that neat clear key chain from a Wired show that lights up, a small remote control car, my (unsorted) collection of state quarters, all the wheat pennies I’ve obtained in the last few years, all sorts of stuff that was really cool at the time.  I had to save it somewhere.  When I need it, I’ll know where it is.

Turns out that because there is so much stuff in the drawer, it’s hard to locate things.  I’ve already realized I shouldn’t have placed those sharp objects in there. So every once in a while I clean it and today’s the day. Typically it gets messy about every year or so.  Not this time.

In one of the Forex courses that I took when I started, it was mentioned from a veteran trader that often times a novice can be deduced by the number of indicators and lines on the charts.   If there’s a lot of things going on the chart, it most likely is a novice at the chart.  At the time, I could intellectually understand the comment. As days went on, I started learning more and more and my charts reflected it. 

Just like cleaning the drawer, I cleaned up my charts.  I’ve started with a clean screen.  Well, almost.  On one of my 24 inch LCDs, I have 4 charts – daily, 4 hour, 1 hour and 5 minute.  Seeing all time frames has really helped put things into perspective.  Starting with the daily chart, I have the nearest support/resistance lines. On the four hour I place the nearest support/resistance lines and add the daily support/resistance lines. Likewise on the 1 hour.   The 1 hour also has a modified MACD indicator.  The 5 minute only has it’s own S/R lines. 

I was told that candles are not as meaningful on the 5 minute chart. So to distract me from looking at the candles there, I just plot the closing price as a line graph.

After all this, I can look at my charts and fairly quickly determine when I should make a trade.  Actually I found that if I look at the charts from across the room, the trend is very apparent. Squinting seems to work as well.

This has also helped me focus on price and not try to go after that holy grail that everyone is selling for one day only (today). My trades are becoming better and my stress level is lowering.

It feels really good to have a clean drawer and a clean chart. They’re going to stay that way. Really.  I mean it this time.

It’s easier to see a trade potential on a clean chart