How long do you have it backtested? What are the results?
If I think that a currency is getting strong, as far as I don't know what other currencies may get strong too, it is better to trade all pairs of a currency to overcome losses.
The problem is that I don't have a general strategy for detecting the ups and downs of the currencies using indicator. Supports and resistances do not give me the correct direction.
If I may suggest something, this indi might be a good point of start but now read the threads above, maybe this one too: https://www.forexfactory.com/showthread.php?t=545718 all devoted to different approaches to the strength of currencies
It will spare you much headaches and losses.
Anyone can look at the past 10 years and check if there is any contrary.
Thanks a lot for the link
Maybe you have no experience in trading boards and don't know how well prepared you should be to receive feedback from experienced users, at this moment this doesn't look good, so the expected result will be probably similar to hundreds before.
However I would like to wish you success, hopefully, we will talk again in the future, don't get discouraged.
For me, it is nonsense, although you may try to change my mind.
The best way to use this kind of indicator is going back to the past and then check when the currencies made a top or bottom, and then mark the OB/OS lines on the indicator. Then when you have one currency on overbought and the other on oversold, you have higher odds of success, you can either short one or buy the other.
Sum of all changes is equal to zero at anytime, means to me that if one currency is getting weak, the other currencies (as a whole) are getting strong, and vise versa.
In other words, if we sell a currency, when it is getting weak, we will get profit for sure! But this profit is guaranteed if we trade all 7 pairs of that currency (not just some of them!).
By the way, I am not trying to convince you for something that you do not believe. I am trying to clear my statement about trading all pairs of a currency for all traders who might read this post.
Thanks for your comments
As I understand your system relies on the proper assessing the direction of the currency. It is the same almost as assessing the direction of the pair. So if you look at the chart and will see trend you might have positive outcome. I sense here that you complicated something simple, you observe your charts instead of for example currency index. If so this approach has no better edge than just looking at chart and assessing if we are under daily open or above.
But, there is spread so ... this is a slight problem also. So it might be no mathematical edge at all. But I might be wrong.
However, I encourage you to trade this way and market will verify you, sounds good will not work for me. But maybe for you, I will check in a quarter or two.
Thank you for this discussion, over and out.
for ( j = each pair of currency )
currency[i] = currency[i] + ( iClose( Pair[j] , Period() , i ) - iOpen( Pair[j] , PERIOD_D1 , dayCount ) );
Please compare this formula with the one stated at the first post.
Here are some pictures of the two indicators:
I see that price change percentage is a bit different from real pips change, but signals are very similar. We can find supports and resistances in both indicators!
Please note that both indicators cross zero level (approximately) at the same time!
Does this prove the statement of "trading all pairs of a currency at the same time"?
About spread and commission, I would say that for a real ecn account (which I have tested), at the worst case (which is trading GBP pairs), the spreads and commission are summed up to 15 pips. But, please note that spreads and commissions are the costs of any trade not just this kind of trading! You trade 7 pairs of a currency and you give spreads and commission too.
Why don't you change the formula to display something like a RSI or the COT index? It is way better to see when the currencies are at extremes and ready to turn... Add an input in indicator options like "lookback period" so we can play with different values.
Thank you very much.
Do not believe the indicator can handle a broker with a suffix -- ie: EURUSDi
Post the source code and I will modify.
Hi, a couple of further remarks.
I am convinced that your system/approach is flawed, this second - "pips indicator" approach, sheds new light to your ideas - I mean I have an impression that you assume that total pips in plus and in minus since open of every pair is ... zero! This is nonsense.
It seems to me that you have defined your indicator as having a feature that at any point its sum equals zero and then you are suddenly surprised that it .. equals zero. From this, you are reaching the far conclusion (imho) that trading a basket of pairs gives you an edge and you will be in plus.
Err, no. Still market may reverse at any time, so you lack something here - some additional rules increasing the probability of a positive outcome. I mean your theory (in fact this is not a theory but an assumption coming from a misunderstood indicator - in my opinion) not backed by logic or data test is too weak to provide a positive outcome.
But, don't listen to me. Trade it, I might be wrong. If I am not wrong - you will have a direction where to search for possible flaws.
1. The way I see how your indi works on the market - it identifies buyouts and selloffs - which might give us an idea about the general direction of the market.
2. This coupled with week indi may give us an idea about the general direction of the market in this day and this week. Is the currency bought or sold -I mean you can assess the general trend of the currency (something like this we can see I suppose from the currency index).
3. This, paired with any other system can give a trader a certain edge over the market - you can take signals in the general direction of a weekly/daily trend of a currency, not a pair (this is important).
4. Maybe it will give something more - playing with this indi may uncover some cool features too, like support and resistance and how it translates to market behaviour.
Thats why I encourage you to study it further.
I really thank you for your attention and your time. In this challenge I created a new indicator which is directly related to the pips change in a day for each currency which, I think, is more reliable than change percentage.
I also agree with your analysis using this indicator. You summed up the usage more better than me.
Thanks a lot
I am thinking about some other things too. Please follow us.
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