DislikedHere is a link to a similar trading method.
I think this is where the CCFp indicator came from.
There are also other currency strength indicators posted here, with instructions on how to use them.
http://www.forexfactory.com/showthre...highlight=ccfpIgnored
Thanks for this link. I thought one of the observations made by the originator of this thread Fxorce was worth repeating here. You may look up the link in regards to references to the posted chart on that thread. As follows:
CCFp is a Complex Common indicator used to establish trends. You can read more about it here: http://articles.mql4.com/422
Complex Common (CC) is used to establish cycles or triggers to enter or exit trades in the direction of the CCFp. Use CCFp to establish trend direction and then enter based on CC.
In the above image you see NZD is most overbought and USD and CHF are most oversold. Of the majors there is only one tradable FX pair; NZDUSD. Since we expect NZD to revert to the mean at the end of the day we would sell NZD. Since USD is oversold we would buy USD.
It's important to note that 90%+ of all daily candles retrace to 50% of the previous day and 90%+ of all FX positions are 1 day duration; so end of day mean reversion is one of the most accurate and low risk methods of trading FX. Also worth noting is that all currencies are related to each other, so when we make an FX trade we are; to some degree, intrinsically hedged.
Our goal when taking one of these EOD mean reversion trades is to identify a pair that has moved near it's average daily range. Then find a support/resistance level for entry. The CCFp assists us in finding the best candidate by showing us the underlying currency indices and their individual overbought or oversold valuation against all majors. EOD can occur during NY 8am, Noon, or 3pm.
One of the things this tells me is that we need to be more precise in when we enter our every 4 hour periods. Two of these three periods noted above have provided me with the greatest rewards. I have traded the 4PM time slot but it sounds like the 3PM would be more optimal.
1Trader2
1