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At the beginning of Chapter 1, Nick tells the reader about some lessons he'd learned from his father. He notes that he has learned to be objective and to avoid judging others. Then he adds that this objectivity has its limits. And he goes on to imply that his experience in the East (New York) pushed him beyond this limit. Coming back from the East (to his home in the Midwest), he longed for moral uniformity. He adds that the only one from the East who he did not judge so harshly was Gatsby.
So, with this initial introduction, we know that Nick is telling his story after the fact. He is recalling his time in New York with Gatsby, Daisy, and the others. So, the initial setting is presumably in the Midwest where Nick is originally from, in the autumn of 1922.
Then, he gives a brief summary of his family history. From here, he flashes back some more. After returning from the war (World War I), he is restless and decides to go East to learn the bond business:
Father agreed to finance me for a year and after various delays I came east, permanently, I thought, in the spring of twenty-two.
Nick takes the reader back to the Spring of 1922, moving into summer, when he first arrives in New York to live beside Gatsby in West Egg, Long Island. Nick arrives and feels like this is a new beginning:
And so with the sunshine and the great bursts of leaves growing on the trees—just as things grow in fast movies—I had that familiar conviction that life was beginning over again with the summer.
Nick, and Gatsby, live in West Egg, the less luxurious of the two "Eggs."
Twenty miles from the city a pair of enormous eggs, identical in contour and separated only by a courtesy bay, jut out into the most domesticated body of salt water in the Western Hemisphere, the great wet barnyard of Long Island Sound.
Across the bay is the more "fashionable" East Egg where Tom and Daisy live. The bulk of the chapter is set in Tom's and Daisy's home. Nick gives a poetic description which shows the house to be finely made and luxuriant, but also suggests something superficial about it:
The windows were ajar and gleaming white against the fresh grass outside that seemed to grow a little way into the house. A breeze blew through the room, blew curtains in at one end and out the other like pale flags, twisting them up toward the frosted wedding cake of the ceiling—and then rippled over the wine-colored rug, making a shadow on it as wind does on the sea.
Nick returns to West Egg and sees Gatsby looking across the bay to the green light at the end of the dock near Daisy's house. This is symbolic because the lasting impression at the end of the chapter is of Gatsby meditating upon the green light, a beacon symbolizing Daisy herself.
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