Over the last three weeks I have been asked ‘why do your 4hr charts look different to mine?’ over twenty times. In this post I am going to explain why 4hr charts can look different from broker to broker.
Forex Broker Server Time
A Forex brokers server time is different to a brokers platform display time. Forex trading platforms allow you to change the displayed time to your local time. Changing the display time will not make any changes to your candle formations.
All Forex brokers require servers to run, store information, and draw charts. A brokers server time determines the open/close time of their 4hr candles. The first 4hr candle for the day always opens at 00:00. With my broker, GFT Forex, the new 4hr candle opens at 00:00 GMT+0. With other brokers 4hr candles can open at any time, two of the most common times after GMT+0 are GMT+1 and GMT-5.
If my broker starts the day at 00:00 GMT+0 and yours one hour later at 00:00 GMT+1 our charts will end up looking very different.
The Best Server Time
I am often asked what server time is the best. The short answer is that there is no best time. However, my guess is that most of the worlds traders are using GMT+0. Most of the volume in Forex occurs in the London session and most UK based traders using UK based brokers are using GMT+0 charts. Also, UTC/GMT is the official standard for world time so I can only assume most traders are looking at GMT+0 charts.
When looking at your charts it is important that you see what the majority of people see. Trading any market is a self fulfilling prophecy. I use Support and Resistance lines to trade, these lines have no inherent magical voodoo attached to them that causes price to bounce from them. Price bounces from Support and Resistance because thousands of traders expect it to so they place orders at these levels. This is the same for candle formations, trend lines and even indicators. So, when I look at a chart I want to know that the majority of traders in the world are looking at the same chart. I choose charts formatted in GMT+0 because I believe that most traders in the world, especially the big boys, are using GMT+0 charts.
How Important is This?
If you do not trade 4hr charts or daily charts you will likely not notice any difference. This is only a problem for 4hr charts and above.
If you follow my Forex Trading Strategy you should probably be using GMT+0 based charts. However, Price Action is just as visible on GMT+0 as it is on GMT-5. While I think that anything other than GMT+0 charts are a liability I still think you can trade profitably using them.
Forex GMT+0 Based Brokers
*Note – This list is purely informational, I do not vouch for any of the brokers listed here except for GFT Forex which I use personally.
– GFT Forex
– Dukascopy
– InterbankFx
If you wish to help contribute to this list please leave a comment below and I will add the broker.
Madpipa
These days more brokers are shifting to GMT +2 for part of the year & then moving to GMT +3 for the US Daylight Saving time. 3 brokers that I have been involved with have all gone down this path. The reason is that they only ever have 5 Daily candles – there is no Sunday candle.
Nick
Changing again, what a headache. I will stick with my GMT charts. I still think most traders are using GMT. However, I can see the sense in the server time you mentioned.
hoek_nl
The server time has been a bit of a headache in the beginning indeed. And now Alpari UK says:
Dear Client,
Due to overwhelming client demand we will be making changes to the MetaTrader clock settings that will give you an extra hour to trade each week.
What is happening?
The MetaTrader clock on your platform will be switching from Central European Time (CET, GMT+2) to Eastern European Time (EET, GMT+3). The change will take effect at 0:00 EET Monday, 2 April 2012 (21:00 GMT, 22:00 BST Sunday).
What does this mean for you?
This small change will bring Alpari (UK) trading times into line with more markets for more clients. The greatest effect of this change will be at the weekly opening of the markets. You’ll now have an extra hour to place stops and limits or to adjust a position in response to any major market movements in the first hour of trading.
If you use an Expert Advisor (EA) which requires the GMT offset to be manually input, please ensure that this is adjusted to GMT+3 to reflect this change before the markets open.
We suggest on the first week this takes effect you pay special attention to your closing positions on Friday, 30 March and opening positions Sunday, 1 April 2012.
Michael
NIck…didn’t you mean “can” not “cant” in the last sentence before the list of GMT Brokers?
Thanks.
write2kc
Very helpful ino.
Spot
Thank you!! No one explain like you do!
JeromeGrantJohns
Nick; do you use GFT deal 60 brokers and Platform?
Nick
Yes I use Dealbook360
konstantin
…thanks… The daily closing price takes place at 5pm New York time ie I would imagine this price is the basis as it is the price that banks do business the following day; so I use a platform that shows midnight00:00daily candle and it happens to be NY5pm ( hourly candle time NY+7 )and hope that this is what banks are looking at too…now for opening price I believe it is Sydney 8am local time monday morning which is 5pm New York sunday …my contribution to this confusing issue ….any comments are welcome…
Nick
Different banks in different countries open at different times.
Miike
If price action is the focus, ultimately the broker time should not impact this!
If price action occurs and gives you a good entry and you successfully use this to your advantage with a low risk high prob trade. The bar open and close time would be irrelevant IMO. :)
Nick
Yes and no, candles are a tool we use to measure Price Action. When everyone is looking at the same candles it is easier to anticipate what the market will do next. I look for specific candle formations and many times I see them on a GMT+0 chart but not on a GMT+1 chart. The underlying Price Action is obviously the same on both charts, it is just shown more clearly depending on the brokers time.
chris
Your mistaken on the time…the Big boys follow charts based on the NY open and close which is 5pm EST… that is the daily candle that matters..same goes for H4…
Nick
According to who Chris? I gave clear reasons why I believe the big boys use GMT based charts. If you’re going to make a claim like that you should explain why it is the case.
fxgrade
Really good
article Nick. I have given this a lot of thought before and have exactly the
same opinion as you. With London being the place that brings most volume to the
market, it makes sense to follow GMT based charts. I really wonder if Steve
Nilson ever mentioned anything about this…
adebisi jamiu
Is it that brokers that are not using GMT+0 are not reliable ?
Nick
No, brokers not using GMT+0 are still reliable. My suggestion is that reading Price Action on non GMT+0 charts can be a little harder.
tree
Hello nick, which broker do you use for gmt+0, currently. lastly can I find them on trading view. I am finding alot of difficulties in using gmt +2 brokers.
Donrongarm10
I am trully a newbie. I would like to learn how to trade the forex mkts. I have looked at your site and I have enjoyed it very much. I went thru your “Ninja” class, lol. Anyway can you please send me e-mail with more info. about the cost and just what do you teach newbies? I don’t want to simply just learn one’s trading system, but I want to learn from the ground up. Such as learning the whys and whens of using indicators, osscillators. Learn the different types of orders and also the whys and whens.
Thanks,
Don
Pete Jones
Nice article, I think it doesn’t really matter what GMT is but how the H4 closes or what it looks like. Does anyone know of a GMT+3 broker?