FXCM/DailyFX Signals and Strategies

Hi Ribs,

The estimate I heard is that it will be done in about 2 months time. The goal is to have it available through the Strategy Trader platform we just launched. I will make a notification through this thread once it is available.

-Jason

The USD/JPY positioning has grown even more on the long side to 6.20 long orders to every 1 short order.

http://img46.imageshack.us/img46/8469/usdjpyssi89.png

I also included the open interest part of the graphic since open interest in USD/JPY is now starting to rival that of GBP/USD which is very popular amongst retail traders due it being a very active pair. Interestingly enough, neither breakout2 or momentum2 (both use SSI as a contrarian indicator) are giving signals.

Here's a table DailyFX put together showing the upcoming central bank meetings and the expectations for any rate changes.

http://img838.imageshack.us/img838/7...esaheadoff.png

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

Hi everyone,

Want to let you know about something new on the website. There's now an FXCM Labs section on the FXCM webpage where you can become a beta tester for new products and also submit suggestions and feedback for new products and services. http://www.fxcm.co.uk/fxcm-labs.jsp

The next thing to come out in terms of new product/service will be an update to the FX Trading Station II. Expected timeframe for release is end of this month or early September. Will have more details on new features about a week or so before the release.

-Jason

Hi Jason,

Strategy Trader looks quite cool and being able to autotrade FXCM signals will be great! Question though, why will Strategy Trader only work with non-hedging accounts?
"Strategy Trader is compatible with any non-hedging, Standard or Micro account."

Hi Ribs,

Thanks for the feedback!

To answer your question, the platform was built based on exchange execution, like in futures and equities, so there can only be a long or short position, not both. Building the platform based on exchange execution also gives the possibility of using it in the future for equities and futures.

This is why hedging is not supported on the Strategy Trader platform. What you could do instead is open two accounts with which you can take offsetting positions, long in one account and short in the other.

When adding a strategy EA to Strategy Trader, you have the option to specify which account should be traded on the chart by the EA you are adding. Here's an example showing a demo with two accounts under the same login:

http://img15.imageshack.us/img15/672...rlammsetup.png

Step 1. Goto Strategy Properties
Step 2. Choose the Account Number

That makes sense. Thank you for the Strategy Trader instructions too. I need to play around with it and get ready for autotrading FXCM signal breakout 2! PM me if you need a beta tester in a live account for that.

Will do.

I remember back in June of this year, traders were pointing out a potential head and shoulders pattern developing in the DJIA (see chart below I circled the area when the discussion started). The market initially tanked down to the 9,600 but recovered right back to the 10,750 level where it failed again. Looks to be forming a tough resistance level, and just this morning I was listening to Bloomberg radio and they brought up discussion yet again about this possibly being the right shoulder to the very large head and shoulders pattern:

http://img267.imageshack.us/img267/3127/dowchart.png

Note: Chart image created using Strategy Trader

This just in...FXCM released an announcement this morning about price improvement on limit orders:

FXCM recently enhanced its No Dealing Desk forex execution model by adding Price Improvements†. As of July 12, 2010, if a better price becomes available before your limit order executes, FXCM’s No Dealing Desk execution engine will automatically give you the best available price.

The Old
A common inconvenience to most No Dealing Desk execution models is that limit and limit entry orders always fill at the limit price—even if the market price gapped or spiked favorably through it. At the same time, stop orders can fill at a worse price.

The New
Now with FXCM Price Improvements, your limit and limit entry orders can receive positive slippage. That means you can potentially make more money if the market gaps or spikes favorably through your limit price. This is especially true in situations where the market is moving fast like during weekend gaps or around news events.


How Does It Work?
To illustrate how a Price Improvement can mean more money for you, consider the following example.

Friday: You decide to hold a 10K EUR/USD buy position through the weekend, in light of a G20 meeting on Saturday. You create a limit order on the trade at 1.3260 anticipating a possible gap when trading opens.
Saturday: The G20 meeting is very positive for the Euro-zone, which could help your trade.
Sunday: As trading opens, the EUR/USD price gapsthrough your limit priceof 1.3260, from Friday’s close of 1.3242 to 1.3275.

The Old: Previously, your limit would have filled at your requested limit price of 1.3260.

The New: Now, with FXCM Price Improvements, since the market gapped through your limit price, your trade could close at 1.3275, providing you with a Price Improvement of up to 15 pips.


“Exchange traded instruments already benefit from positive slippage.” said Drew Niv, CEO of FXCM. “With FXCM Price Improvements, FXCM is bringing the forex industry more in line with these common practices, making trading even more fair for our clients.”

To see Price Improvements in action, FXCM recommends using limit orders to close trades. Easily see when you get a Price Improvement by comparing the limit price that you requested with the limit price where you were filled.

†All price improvements are dependent upon available liquidity.


http://www.dailyfx.com/forex/fxcm_ne...it_Orders.html

Japan's Stock Index:

Take a look at the chart below of the JPN225 CFD contract which tracks the Nikkei 225 index of Japanese listed shares. The market is now testing a support level located around 9150. (CFD trading is not available for US residents).

http://img710.imageshack.us/img710/858/jpn225chart.png

The stronger JPY is only adding to the pain of Japanese exporters which is putting pressure on the JPN225. Bloomberg Businessweek has a nice article on Japan's slowdown and calls for BOJ intervention:

The yen’s 8 percent advance against the dollar over the past three months is threatening earnings of exporters from Honda Motor Co. to Sony Corp., and Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa have expressed concern about the issue. The government’s $10 trillion of debt, the world’s largest, may force it to turn to the central bank to lead efforts to weaken the currency and support the recovery.
http://www.businessweek.com/news/201...cy-action.html

The JPN225 CFD contract can be accessed through the FXCM UK demo account located here http://www.fxcm.co.uk/free-forex-accounts.jsp .

Any idea about when will the tick data be available?

Hi Adal,

I checked with the Strategy Trader team and they said it's about 2-3 weeks from being uploaded to the forum. A lot of traders have been asking about it, so hopefully they will get it up sooner rather than later...

-Jason

Something else I ran across recently with tick charts and Strategy Trader....

The current tick history goes back about 1-2 weeks depending on the pair. If you have set the chart for a longer time-frame than the available data from the server, you will see a continuous message saying "backfilling" at the top left of the chart. To prevent this, you can limit the timeframe for the chart through the symbol formatting, see image below. And vice versa, you can also the format symbol options to increase the time frame for longer periods where historical information is available.

http://img294.imageshack.us/img294/9...mtimeframe.png

Trading in the forex market's major pairs has been relatively quiet if you look at the daily ranges. Just looking at the charts this morning, the market is trading very near to where we were at the same period yesterday.

Below is a screenshot of the strategy performance of the DailyFX Plus trading signals. The performance is a rolling 60 days history. One thing you will notice is an improvement in the range performance compared with the first half of 2010. As volatility in the market drops, range trading strategies tend to do better. The market tends to be constricted to a smaller trading range with fewer trends and more false breakouts.

http://img299.imageshack.us/img299/2...erformance.png

On the economic front, let's take a look at the US Weekly Jobless Claims number that just came out and compare it to a chart. Jobless claims rose to a nine month high of 500,000. If you look at the below chart from Bloomberg's website you'll see jobless claims have been moving between roughly 450-490k per week. Technically speaking, this weeks number pushes it through the resistance that had been developing, and a bad sign for the economic turnaround. The graph on their website has not been updated to reflect this mornings release of 500k but you can picture today's data point at the 500k level.

http://img205.imageshack.us/img205/6...lessclaims.png

Source: http://www.bloomberg.com/apps/quote?...JCJC:IND#chart

A good overview of the release from Markewatch:

Claims had fallen as low as a 427,000 level in mid-July but have worsened steadily since. Economists are troubled by the lack of vigor in the labor market. With the unemployment rate near double-digit levels, businesses and households do not have the confidence to spend and invest.

This week's rise was unexpected. Economists had been projecting a slight decline was in the cards.

For the week ended August 7, initial claims were revised up to 488,000 from a previously reported 484,000.
http://www.marketwatch.com/story/job...igh-2010-08-19

While volatility has been low over the past couple of weeks, the CHF has been one of the more volatile currencies. Take a look at the volatility measure on the DailyFX Technicals section:

http://img268.imageshack.us/img268/1...volatility.png

The EUR/CHF and USD/CHF have been two of the most volatile pairs out of the majors. Within the past couple of hours USD/CHF has managed to trade through support which could be a push towards parity? The next significant level I can see is around 1.0130 reached during January 2010 and parity shortly before than in November 2009.

http://img291.imageshack.us/img291/1015/usdchf.png

For those of you trading any of the Austrlian Dollar pairs and holding positions open over the weekend, be aware of possible event risk with elections being held tomorrow. While I don't have any opinion on way or the other one how it may affect the AUD, political events in general have the potential to increase market volatility. The Financial Times has a brief overview of the elections which you can read here http://www.ft.com/cms/s/0/0d05c896-a...44feabdc0.html .

Retail positioning in AUD/USD as of this morning's SSI was fairly neutral at -1.06.

http://img716.imageshack.us/img716/3...dusdssi820.png

Any idea what's type of market condition this strategy is running correctly? All Condition is running correctly?

Hi FxGuru8,

David Rodriguez of DailyFX releases the Strategy Outlook for market conditions every Monday. Below is today's update with each currency pairs bias towards market condition.

http://media.dailyfx.com/illustratio..._Picture_5.png

Full article found here: http://www.dailyfx.com/forex/fundame..._Strength.html


According to the performance information from the trading signals this morning, Breakout2 and Range2 have been the better performing systems over the past 60 days.