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  • #21
  • Jun 18, 2011 8:26am Jun 18, 2011 8:26am
Quoting BackTestDummy
Point taken, and as ever it has to be different strokes for different folks. I have tried taking what I thought was the easy route and jumping in on the pair that is moving the most but I couldn't make it work.

For me knowing that 1.4310 was key S&R and the 38 fib made me an awful lot of money yesterday, if I was looking at 10 or 12 pairs I doubt if I would have known where best to get in or what to shoot for.
Quoting A-game
Watching anything more than 12 pairs even when using a daily method can become very monotonous and that is certainly not the direction i am going here. What i am attempting to do here is locate a single pair, perhaps two pairs with the highest probability of success. In doing this, i hope to establish not only directional bias, but also polar opposites. Extremely strong vs extremely weak.

I do not watch 10 pairs.. with this setup it is like watching 5 currencies (not pairs)

Where I drew those boxes is what I look at together... I drew those red and blue boxes to show you its not as chaotic as it looks

but even if you wanted to consider it watching 10 pairs you will find they are correlated.. most the time where 1 support and resistance place is for say the eur/usd.. when it hits that point you'll notice the rest are hitting a major support and resistance.. (just a side note)

and yes different strokes for different folks.. I said it in "A million ways to make money" thread so I wont repeat



but just saying.. you capitalize on 4310 with your method.. I took profits at 4328 with my method so were both pretty close to the high of the day
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  • #22
  • Jun 18, 2011 9:16am Jun 18, 2011 9:16am
With the limited amount of backtesting i have done thus far regarding your pair analysis, i think i can profit from it. Im looking forward to Monday to give it some forward testing. It looks like you have answered my question newyear. Let us see.
  • #23
  • Jun 18, 2011 9:46am Jun 18, 2011 9:46am
Quoting A-game
With the limited amount of backtesting i have done thus far regarding your pair analysis, i think i can profit from it. Im looking forward to Monday to give it some forward testing. It looks like you have answered my question newyear. Let us see.
The trend is your friend.. forex trends are pretty predictable IMHO.. strong and weak together.. bingo you got it.. you'll only be wrong at the tops and the bottoms..

you will find your biggest issue will be where to take profit and set your emergency stop losses.. knowing direction is rather easy IMHO managing money, psychology / discipline is the 10%.. thats what I'm working on in my journey right now

and like I said there are a million ways to make money.. read a million books and articles but make your own system and method that suits your beliefs..
  • #24
  • Jun 20, 2011 1:40pm Jun 20, 2011 1:40pm
Maybe you need a prog that calculates the current pip value (in $) for every moved pip (sub-pip),summate and divide it by the amount of all /EUR/ pairs (EUR strenght).
It can be valid for every 24h, one week, a month etc.
Since there is no T&S you can "weight" every pair by the average daily amount of transactions: (EUR/USD 40% London or 30% during NY session).
  • #25
  • Edited 3:30pm Jun 20, 2011 3:01pm | Edited 3:30pm
Quoting UnnamedPlayr
Maybe you need a prog that calculates the current pip value (in $) for every moved pip (sub-pip),summate and divide it by the amount of all /EUR/ pairs (EUR strenght).
It can be valid for every 24h, one week, a month etc.
Since there is no T&S you can "weight" every pair by the average daily amount of transactions: (EUR/USD 40% London or 30% during NY session).
This doesnt really make sense.. for example..

if every buyer in the world right now decided that the EUR/USD is only worth buying at 1.000 and every buyer in the world placed their buy orders at 1.000

price would jump from its current price, all the way to 1.000

now tell me.. how much money did it take to move the market per pip!?!


exactly
  • #26
  • Jun 20, 2011 3:47pm Jun 20, 2011 3:47pm
Quoting UnnamedPlayr
Maybe you need a prog that calculates the current pip value (in $) for every moved pip (sub-pip),summate and divide it by the amount of all /EUR/ pairs (EUR strenght).
It can be valid for every 24h, one week, a month etc.
Since there is no T&S you can "weight" every pair by the average daily amount of transactions: (EUR/USD 40% London or 30% during NY session).
Very cunning. How do you know there's a difference between UK and US sessions?
  • #27
  • Jun 20, 2011 5:38pm Jun 20, 2011 5:38pm
On the weekends look at a longer TF and make a list of the best uptrenders & the best downtrenders out of all the pairs you're offered. During the week, only trade those pairs in those directions.
  • #28
  • Jun 20, 2011 6:08pm Jun 20, 2011 6:08pm
triphop
I've read an old article about an institution and their FX turnover, maybe the numbers are not up-to-date anymore.
The % were just examples, you don't have to split the day into sessions.

You can just adopt the latest numbers:
Detailed final report on FX activity in 2010 - PDF page 15 - http://www.bis.org/publ/rpfxf10t.htm

newyear498
It doesn't matter. Every single move (if there are buyers or not) does shift the value of its currency.
  • #29
  • Jun 20, 2011 6:19pm Jun 20, 2011 6:19pm
If you want to trade spread (of N instruments), you might want to look into wider range on instruments than just FX. There are lots of good spread trade opportunities in fundie side.

Example: when BP spill happened it was BP vs oil basket. There are more every moment, at this moment good bet might be bad euro countries vs "good" euro countries interest rates.
  • #30
  • Jun 20, 2011 6:23pm Jun 20, 2011 6:23pm
Quoting triphop
Very cunning. How do you know there's a difference between UK and US sessions?
Something worth reading.. Not probably where he gets his data but anyway..

http://www.snb.ch/n/mmr/reference/wo...2011_04/source
  • #31
  • Jun 20, 2011 6:43pm Jun 20, 2011 6:43pm
Quoting UnnamedPlayr
triphop
I've read an old article about an institution and their FX turnover, maybe the numbers are not up-to-date anymore.
The % were just examples, you don't have to split the day into sessions.

You can just adopt the latest numbers:
Detailed final report on FX activity in 2010 - PDF page 15 - http://www.bis.org/publ/rpfxf10t.htm

newyear498
It doesn't matter. Every single move (if there are buyers or not) does shift the value of its currency.
yeah it shifts value of currency, but you mentioned "calculates the current pip value (in $) for every moved pip"

maybe were thinking something different.. but your wording sounds like your trying to calculate how many $'s its taking to move the market per pip...
  • #32
  • Jun 20, 2011 9:22pm Jun 20, 2011 9:22pm
Quoting UnnamedPlayr
Maybe you need a prog that calculates the current pip value (in $) for every moved pip (sub-pip),summate and divide it by the amount of all /EUR/ pairs (EUR strenght).
It can be valid for every 24h, one week, a month etc.
Since there is no T&S you can "weight" every pair by the average daily amount of transactions: (EUR/USD 40% London or 30% during NY session).


This is actually similar to the direction i was originally going. I once met a guy that worked for a hedge fund, but was only a junior trader. I asked him how he was trading, and basically what his "order of operations" were. He then went on to tell me he would look at multiple timeframes, draw fibs and do all the technical analysis as one would expect. Nothing groundbreaking really. What interested me about this conversation was that before he placed a trade, he needed to run it past a senior trader at the fund who would then look over his analysis and also do a set of calculations regarding interest rates and other such information before giving him the go ahead. It seems they had another set of rules when making trade decisions and unfortunately thats all i was told. This really got me thinking about developing a method to analyze currencies on paper before looking for trades, hence this thread. Great input guys keep it coming!
  • #33
  • Edited 4:55am Jun 21, 2011 4:40am | Edited 4:55am
Relative currency strength analysis is something I discovered a few months ago and I see that it's gaining popularity on FF. There are quite a few tools and indicators available and virtually endless way of applying them.

From what I've gathered over the short amount of time that I've researched this topic, there are three ways of trading relative strength:
(1) Basket trading. In addition to trader101's thread there are more than 5 other threads on FF that use baskets, use the FF search function to find them.
(2) Pairing the strongest and the weakest currencies against each other to arrive at one or a few pairs (the pairs traded change often according to relative strength).
(3) Trading one or a very small selection of pairs, but using the relative currency strength to find the best opportunities among them. The selection could consist of EUR, GBP and USD for example.

There are advantages and drawbacks to each strategy. Basket trading requires a larger account, patience and heavy experience so that you don't start cutting away your trades before they've even had a chance to perform. On the other hand, during non-choppy times basket trading on higher timeframes can be really simple requiring little analysis.

The second strategy allows you to target the best opportunities of the day, but it could also cause analysis paralysis with too many currencies to keep track of. Choppy sessions and sudden movements are a killer with this strategy.

The third strategy is what I use. The upside is you develop skills in trading specific pairs. If you are someone who uses fundamentals as well as technicals this is the strategy to go with (you don't have to keep track of every country's fundies). The downside is choppy sessions and times when there aren't enough good signals (which could cause over-trading).

EDIT
I should mention that using relative strength indicators (like the on by hanover or Simeon Semenych) is much easier in hindsight. It takes a lot of testing (use a demo account) to arrive at a point where you can use them to trade real money.
If you don't risk, you don't ever have to lose.
  • #34
  • Jun 21, 2011 5:45am Jun 21, 2011 5:45am
Couple of great finds there Unnamed and Mikkom.
That BIS survey is pretty telling reading on top of those stats. Also, from Mikkom's:
"local currencies tend to depreciate during their own trading hours"

Something I'd never noticed.
  • #35
  • Jun 21, 2011 5:55am Jun 21, 2011 5:55am
Quoting triphop
Also, from Mikkom's:
"local currencies tend to depreciate during their own trading hours"

Something I'd never noticed.
Interesting. I thought it was the other way around.
  • #36
  • Jun 21, 2011 5:57am Jun 21, 2011 5:57am
best use of relative strength I've found is written by Silvani. paraphrasing it roughly, if you think dollar is going up for eg, use crosses to determine best play. if EG is coming to support, short GU. To resistance? Short EU. etc.
same deal with EY and UY.
this can make the difference between a good play and a brilliant one.
  • #37
  • Jul 4, 2011 3:13am Jul 4, 2011 3:13am
personally , i perefer to trade in a few pairs and i am more interested in strength of the pair in periods , in time etc.

so i cant help about the thread's topic. but
i've noticed that thread , maybe it helps some , i hope.

http://http://www.forexfactory.com/showthread.php?t=300750

best wishes.
the best indicator is trader's knowledge , experience and dicipline.
  • #38
  • Dec 2, 2011 5:29am Dec 2, 2011 5:29am
You can check out Bloomberg Correlation-Weighted Currency Indices.

(The Bloomberg Correlation-Weighted Currency Indices (BCWI) provide an indication of the relative strength or weakness of one currency against the world, i.e., a representative basket of currencies. These indices can then be used as the basis for contracts that allow the holder to hedge against exposure to adverse movements in that currency or to take speculative positions on the broad future strength or weakness of the currency.)

It's neartime. Timeframe and max. symbols are restricted.

EUR USD JPY GBP:

http://img254.imageshack.us/img254/2...rusdjypgbp.png


CAD CHF AUD NZD:

http://img849.imageshack.us/img849/6...dchfaudnzd.png
  • #39
  • Dec 14, 2011 10:46am Dec 14, 2011 10:46am
Also, this bloomberg info is public?

Thanks


Quoting UnnamedPlayr
You can check out Bloomberg Correlation-Weighted Currency Indices.

(The Bloomberg Correlation-Weighted Currency Indices (BCWI) provide an indication of the relative strength or weakness of one currency against the world, i.e., a representative basket of currencies. These indices can then be used as the basis for contracts that allow the holder to hedge against exposure to adverse movements in that currency or to take speculative positions on the broad future strength or weakness of the currency.)

It's neartime. Timeframe and max. symbols...
  • #40
  • Dec 17, 2011 9:07pm Dec 17, 2011 9:07pm
here another trading method u might want to give a shot.. CICR - currency index cross referrencing ,,, it works great for me ,,

http://www.forexfactory.com/showthread.php?t=317893
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