FXCM/DailyFX Signals and Strategies

The beating of the EUR/USD drum continues

Let's take a look at something else this morning...equities. What happens in one market often has an impact on others, so make sure to keep a broad view of the markets.

Here's a chart noted by DailyFX. The Dow has settled into a range over the past two months.

http://www.dailyfx.com/export/story-...1727800505.jpg

http://www.dailyfx.com/forex/fundame...ends__But.html

Here's an updated chart I created this morning using an FXCM CFD account. We're at the middle of the range, the top being 10,500 and the bottom being about 10,200.

http://img687.imageshack.us/img687/6425/us30.jpg

You can register for a CFD demo account on the FXCM UK webpage. CFD's are available for non-US residents only. The Dow tracking CFD is listed as US30.

The weekly SSI forecast came out today (released every Thursday). Take a look at the chart below:

http://www.dailyfx.com/export/story-...y/SSI1217b.gif

The histogram shows net positioning and the black line is the EUR/USD price movement. Traders were clearly shorting EUR/USD from May until mid-November during the EUR/USD rally. Trader positioning has now turned positive indicating traders are buying as the EUR/USD declines. This is a good visual as to why SSI is a contrarian indicator. The majority of retail traders are trying to pick tops and bottoms in the market. This works when the market is range trading, but when the market is trending or breaks out.

You can find SSI on additional currency pairs here.

The EUR/CHF is now pips away from the important 1.5000 level. DailyFX just released an article with a great title "EURCHF Range so Appealing, Even the SNB Endorses It". The 1.5000 level is a level at which the SNB has intervened previously to weaken their currency. A central bank wanting to weaken the currency is not one to be taken lightly since they can simply start printing money. Here is what DailyFX has to say:

here is a clear level of support in EURCHF that is so consistent that it seems unnatural. In fact, it is. The floor that has developed at 1.5000 since March is the product of manipulation. The Swiss National Bank (SNB), seeing the impact that speculative and risk-based flows was having on the exchange rate, decided earlier this year to take an active role in holding the franc back from a growth-chocking rally. The warnings on intervention have been quite clear and consistent; but the where and when of their manipulation has not been disclosed. From the policymaker’s standpoint, this is the best approach as a level of vagueness will discourage market participants from driving the single currency higher for fear of running into a bank-derived reversal. What makes EURCHF even more attractive in this scenario is that the central bank has identified this specific pair as its primary target on exchange rate manipulation; and the impact has been clear with the current level of support. With a deep-pocketed central bank acting to back up technical support, a range setup looks unusually stable. There is still risk for a breakout (we can always refer back to the scuffle between George Soros and the Bank of England); but the probabilities are still in our favor – especially with the holiday trading hours coming. We will remove all open orders before the week closes or should spot hit 1.5075 before our entry. http://www.dailyfx.com/forex/analyst...ing__Even.html

Here's my 4 hour chart showing the levels DailyFX is watching:

http://img686.imageshack.us/img686/2...rchflevels.jpg

Even looking at EUR/CHF daily chart for the entire year, the market has moved in a smaller and smaller range. Almost like a spring ready to pop...

http://img24.imageshack.us/img24/8751/eurchfdaily.jpg

Just how far is the EUR/USD going to drop. If you draw a fibonacci retrace from the low in March to the high in November, the 32% retracement is around 1.4100.

http://img405.imageshack.us/img405/8545/eurusdchart.jpg

Here's what DailyFX has to say about the USD rally and the seeming lack of risk aversion during the rally:

Over the past two weeks, the US dollar has surged across the board. And, considering this currency has stood as the primary funding currency to a burgeoning carry trade, it makes sense that the greenback’s performance could be interpreted as a sign that risk appetite is toppling. However, cause and effect do not connect here – at least not yet. Instead risk trends have extended the congestion that has set in since October/November; and the period of consolidation has allowed the world’s reserve currency correct speculative and fundamental extremes on its own. Yet, that should not be taken to mean that investor optimism, and the leveraged positioning it has encouraged, will not go uncontested. In capital markets’ aggressive rally throughout 2009, volatile speculative interest has overwhelmed comparatively stable investor inflows. There is a critical distinction between these two categories. Speculators (or traders) are looking for capital appreciation and will need to eventually book profit on their outright positions. In contrast, investors are looking for long-term appreciation, dividends or some other form of consistent interest income. This dichotomy helps expose the tension that has developed behind the scenes recently. Primary barometers for risk appetite like the Dow Jones Industrial Average and the Carry Trade Index - instead of correcting before the drain in liquidity that occurs at year-end - have developed tight ranges. This presents considerable tension for a market that is looking at potentially volatile conditions in the near future but not enough depth to establish a true trend.

http://www.dailyfx.com/export/story-...17.09.img3.gif

All that is needed to tip risk trends into a tailspin is a definitive catalyst. We have plenty of potential threats to global, financial stability; but optimism or greed for greater returns has helped the markets weather most of tremors. This likely means that we need a market-based event. A particularly large withdrawal of capital from the speculative arena or the seizure of a critical node in the broader financial market could certainly spark a panic that leads to a cascade selling event. Ironically enough, the best opportunity to force the Dow below 10,250 or pitch the carry interest into a bleak bear trend is during the low liquidity-period that is approaching. While there is not enough market depth to maintain and develop a reversal; the low liquidity means it will be easier to unbalance sentiment. Therefore, we need only keep a vigilance on the already incubating fundamental troubles that have developed over the past few months and be ready for a new shock to catalyze price action itself. Among the key trends to watch, the threat of defaults on a corporate and national level is particularly troublesome. Not long ago, the IMF warned that the world’s banks have only accounted for half of the losses they will ultimately suffer from following the worst financial crisis since the Great Depression. Now, we are seeing downgrades on sovereign credit ratings that is further taxing an already fragile market that is now seeing some of its ‘safe’ assets degrading. Investors could weather this if the government maintained its support of the global economy and markets; but this safety net is already being rolled in. As stimulus and emergency aid is rolled back, the markets will increasingly have to support its own weight. And, considering how high valuations have run and the lack of true fundamentals to support recent heights; the outlook is fragile indeed.

Read more: DailyFX - Despite the US Dollar's Rally, Underlying Risk Appetite has yet to Break http://www.dailyfx.com/forex/fundame...#ixzz0a42eKQQG

I ran these a little bit...They don't seem to work real well...do you have any recommended time frames or modifications that lead to a better performance..

If not I was curious why you posted them...I read through most of this thread
and I find it informative...

I would like to know about the little EA's

RP
E$P$

Written by Terri Belkas

The US dollar, Canadian dollar, British pound, and New Zealand dollar will all face a good amount of event risk in the coming week, but trade could also be extra volatile ahead of market closures on December 25.

• Canadian Retail Sales (OCT) - December 21, 8:30 ET
The Canadian dollar could see a pickup in volatility on Monday at 8:30 ET as retail sales for the month of October are due to be released. According to Bloomberg News, spending may have increased for a third straight month, this time by 0.7 percent. While Canada registered just over 43,000 job losses during October, the trend has been in favor of recovery since February 2009, especially since the net employment change surged by 79,100 in November. Likewise, Canada’s leading economic indicator has been on the rise over the past 5 months, suggesting that signs of growth throughout the economy may signal similar improvement in consumption. USDCAD has been trading within a range of approximately 1.0435-1.0745 since mid-November, but surprisingly strong or weak spending results could help break the pair from these parameters.

• UK and US GDP Revisions (3Q F) – December 22, 4:30 ET and 8:30 ET
Both the UK and US are scheduled to release final GDP results for Q3, but only the former is forecasted to indicate revisions. The final result of UK GDP is expected to be changed to a quarterly rate of -0.1 percent from -0.3 percent, while the annual rate may be revised to -4.9 percent from -5.1 percent as more recent output readings have been better than anticipated. That said, the British pound may only respond in a sharp manner if the quarterly rate of GDP growth is revised up into positive territory as the markets will price in the end of quantitative easing by the Bank of England.

Meanwhile, the final reading of US GDP is projected to reflect an expansion of 2.8 percent in Q3, which would be the same as the previous result but would be down from the advance reading of 3.5 percent. A surprisingly strong result has the potential to offer a boost to risk appetite, but if GDP is actually revised lower, equities and the JPY crosses could break lower.

• New Zealand GDP (3Q) – December 22, 16:45 ET
The New Zealand economy may register its second straight period of growth in Q3, as GDP is projected to rise to a quarterly rate of 0.4 percent from 0.1 percent, while the annual rate is projected to increase to -1.3 percent from -2.1 percent. However, there is one key downside risk for this reading as retail sales excluding inflation only rose 0.1 percent during Q3, down from 0.5 percent in Q2. Meanwhile, exports fell throughout Q3, but this happened in Q2 as well and didn’t have too much of an impact on the overall GDP reading. As of Friday, Credit Suisse overnight index swap (OIS) rates were pricing in 203 basis points work of increases by the Reserve Bank of New Zealand during the next 12 months. However, disappointing results could bring OIS rates down quickly, which would weigh heavily on the New Zealand dollar.

• Bank of England Meeting Minutes – December 23, 4:30 ET
The minutes from the Bank of England’s (BOE) December meeting will be released on Wednesday, and while we already know that no changes were made to the Bank Rate, which was left at 0.50 percent, or the Asset Purchase Facility (APF), which was maintained at £200 billion, the news could still impact FX trade. First, the vote count may reflect some difference in opinion amongst the Monetary Policy Committee (MPC) members on the status of the APF, as BOE Governor Mervyn King has been more dovish in this regard in the past. Indications that some MPC members are in favor of further expansions to their quantitative easing program would likely lead to a steep drop in the British pound as it would cause traders to shift their expectations for interest rate decisions in 2010. However, the decision to leave the APF at its current level was likely a unanimous one, and thus, the British pound could gain.

• US Durable Goods Orders (NOV) – December 24, 8:30 ET
The upcoming release of US durable goods orders is projected to show a 0.5 percent increase in November following a 0.6 percent contraction in October, and excluding transportation the index is forecasted to rise a solid 1 percent. There may be some downside risks, though, for the non-defense aircraft orders component as Boeing orders fell further during November. While the headline result will have the most impact on forex trading, traders should keep an eye on non-defense capital goods orders excluding aircraft, as this number serves as a leading indicator for business investment. This component fell in October by the most in six months, and a continuation of this dynamic would not bode well for growth in coming months.

See the DailyFX Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators.

The trailing stop feature on all live accounts was updated over the weekend. The trailing stop is now dynamic, meaning the trailing stop will continually follow the market as it moves ni your favor, even if it moves 1/10th of a pip. See the image below. I circled in red the trailing stop location and you can see the rate minimum move is set to 1/10th of a pip. So every time the market moves (even 1/10th of a pip) your stop will continuously trail the market.

http://img191.imageshack.us/img191/5...ailingstop.jpg

Hi Jason,

I guess I can call to get more info....if your too busy to get that in here.

Hi RP,

Thanks for posting the question and I apologize about the delay. I think my mind is wandering as we get closer to the holidays

The programming services team created the 25 EA's based on a common list of indicator strategies our clients often request. Basic strategies such as moving average crossovers, stochastic crossovers, MACD crossovers, etc. This way you can have it automated and more importantly do back-testing to see what type of results it gives. Just like with any strategy where you add an indicator to the chart, the choice of time-frame, currency pair, stops/limits will need to be chosen by the trader. What we have done is simply provided it in an automated format.

The list is a good starting point to test. For a customized strategy, the programming services team can help with modifications, or if you ever wanted to program a strategy yourself, then the MQL4.com tutorial is a good place to start for MT4 EA's.

Cheers,

Jason

Currency to Watch: NZD

The New Zealand GDP announcement comes out at 4:45pm EST today. This will be a very important news event, especially after last weeks Australian GDP figure came out worse than expected. The NZD/USD has been making lower highs since October after the strong trend that had developed from March - October '09. The next important support level I see for NZD/USD is around the 0.6870 level. See the chart below:

http://img22.imageshack.us/img22/7880/nzdusd.jpg

DailyFX is hosting live trading coverage during the NZD GDP announcement. The coverage begins at 4:30pm EST today (12/22) and you can access it here

For any FXCM traders, please be aware of the upcoming holiday hours for both traders and client services over the next two weeks:

http://img249.imageshack.us/img249/3...lidayhours.jpg

I will also be away until January 12, so this is my last post (knock on wood) until then. More exciting posts to follow in the new year!

I wish everyone a happy holiday and a prosperous new year!

Jason

Happy New Year! I'm finally back after a long break and ready for an exciting 2010.

DailyFX has released their trading recommendations for 2010 guide in which they're mostly biased towards a stronger USD http://www.dailyfx.com/forex/analyst..._for_2010.html .

Interestingly enough, the new year has started out with USD weakness. Keep an eye on the AUD/USD which has slowly moved back towards it's 52 week high now approaching 0.9300 and USD/CAD is testing support as oil continues to make new yearly highs as well.

SSI for USD/CAD is giving a strong signal for further losses. Here's the latest SSI update from this morning:

http://img36.imageshack.us/img36/7901/usdcadssi.jpg

Below is this morning's news report from Sean Hyman of the DailyFX Powercourse. Some interesting news events this morning:


Biggest % gainers: USD/CAD up 0.55%, EUR/CAD on CAD on mild CAD weakness. Nothing up big-time.

Biggest % losers: This is where the momentum is... AUD/JPY down 1.62%, EUR/JPY down 1.08%, USD/JPY, CHF/JPY on fairly strong yen move. Japan is coming off of a bank holiday and the yen has rallied almost ever since.

Abu Dhabi buys a 10% stake in the UFC (Ultimate Fighting Championship).

Oil $80.88 one of the reasons why CAD is weak this morning...oil (CAD Trade Deficit is the other).


Alcoa announced weaker earnings...blamed things like the weaker dollar to euro (stronger EUR/USD) exchange rate as part of the reason for the weaker earnings.

China forces its banks to raise the level of reserves held in the banks...to curb lending so that a bubble doesn't form: http://www.bloomberg.com/apps/news?p...2F10BqD0&pos=2 New requirements start Jan. 18th.

Chavez's 50% devaluation of their currency (the bolivar) will hurt some American company's earnings (like Colgate-Palmolive): http://www.bloomberg.com/apps/news?p...d=aUW0Jsr214IE

Obama plans to hit the banks with more fees: http://www.bloomberg.com/apps/news?p...YFDDBrxk&pos=1

CAD Trade Balance worse than expected at -0.3B vs. +0.8B expected. Trade deficit weighing on the CAD this morning.

The slowing of the U.K. property market is weighing on the pound. http://www.bloomberg.com/apps/news?p...d=aPlMJIKJ5iqw

USD Trade Balance worse than expected at -36.4B vs. -34.9B expected. Oil imports supposedly helped to widen the Trade Balance: http://www.bloomberg.com/apps/news?p...boNd9OTA&pos=3

KB Homes reports 1st quarterly profit since 2007.
Tiffany's boosts profit forecasts.

More Greece & EU problems weighing on the EUR today: Jan. 12 (Bloomberg) -- Greek bonds fell after the European Commission said there have been “severe irregularities” in the nation’s statistical data, leaving the accuracy of the European Union’s largest budget deficit in doubt.

FSA could become a unit of the central bank (BOE)? It could if the Conservatives win the election: http://www.bloomberg.com/apps/news?p...d=aBhgxOeocYpM

The Fed just made a chunk of money ($46.1 Billion in 2009): http://www.bloomberg.com/apps/news?p...d=a1.HF6_hjx.Q

For all of the Elliott Wave junkies, Jamie Saettele is now providing analysis on gold and oil. It's found in the Daily Technicals section of DailyFX http://www.dailyfx.com/technical_analysis/elliott_wave/

http://www.dailyfx.com/export/story-...1210techs2.jpg

Crude’s rally from 7083 is unfolding as an impulse (5 waves). A 4th wave may be complete as Elliott channel support has held. Expectations are for a rally to a new high. Watch the upper channel line for resistance. 8440 is where wave 5 would equal wave 1 of the same degree (this is an objective). Coming under 8024 exposes 7916 and then 7802.

Here are the latest forex correlations against oil, gold, and the S&P 500 for the past 30 calendar days.

http://www.dailyfx.com/export/story-...10-01-12_1.gif

Here's what David Rodriguez had to say about the latest correlations:

The Euro/US Dollar has hit a near record-high correlation against gold prices, while the US Dollar/Japanese Yen currency pair has almost completely lost its historically strong link to movements in the S&P 500. The fairly significant shift in correlations underlines important market themes and their implications on likely direction in the US Dollar. Investors drove gold prices to record-highs on fears of extended USD depreciation. At the same time, the US Dollar now holds the dubious honor of carrying the lowest yield of any major world currency—narrowly edging out the Japanese Yen. Whether or not gold prices continue higher can tell us a great deal on global investor sentiment for the relatively beleaguered US currency.

USD/CAD is approaching the important 1.0250 level and a re-test seems likely given the continued increase in long positions in USD/CAD. Yesterday's SSI reading on USD/CAD was 3.00 and today it has increased to 3.47. To reiterate, SSI can be used as a contrarian indicator in trending markets. Many retail traders attempt to pick tops and bottoms.

http://img16.imageshack.us/img16/7901/usdcadssi.jpg

Here's the long term overview of SSI and USD/CAD since April 2009.

http://www.dailyfx.com/export/story-...1230USDCAD.gif

The historgram shows SSI net positioning. Green indicates traders were net long USD/CAD and red indicates traders were net short USD/CAD. The black line is plotting the USD/CAD itself.

Jason, Is it possible to add 3rd party add in indicators in your platform?

Hi Het2008,

It is possible to add custom indicators into the charts in the FX Trading Station II.

The indicator SDK requires that you code your indicator into the LUA programming language. We have an FAQ located on the FX Programmers site here http://forexforums.dailyfx.com/indicator-sdk-support/ along with support from the programming services team. The programming team would be much better able to help with your questions.

Once the indicator is created, you can then create a chart inside the FX Trading Station, goto the top of the chart window and click on Chart > Manage Custom Indicators. That will open a window where you can load and manage the custom indicators.

Hope that helps.

-Jason

If you haven't noticed already, there's an important discussion going on about proposed regulations to limit forex leverage to 10:1.

http://www.forexfactory.com/showthread.php?t=215917

Hi Jason , where can i download the new trailing stop feature , for my live account