Money flows: Trading the strongest / weakest major currency cross | Page 3 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Looking for Death Cross and Golden Cross indicators 4 replies

Rsi cross indicator? (NOT cross 50, etc) 44 replies

Money flows - Trading the strongest vs. the weakest 24 replies

Royal Cross/Fresh Cross 7 replies

Money Management applied to cross currency pairs 2 replies

Attachments: Money flows: Trading the strongest / weakest major currency cross
Exit Attachments

Money flows: Trading the strongest / weakest major currency cross

  • #41
  • Apr 28, 2012 8:00am Apr 28, 2012 8:00am
Quoting saussiche
People trade currencies for more than just currency... What about other investment vehicles like commodities, or international business transactions?

If you want this concept to be waterproof than you would somehow have to account for everything that is exchanged for money.
Exactly why I was craving unknown to produce his stocks/gold article!

To me that would be the last step, I mean I may be wrong, but it seems as though generally the total money flow is currency stocks and gold... silver, oil etc, from my chartist perspective, look like their volumes wouldn't really affect more major instruments
  • #42
  • Apr 28, 2012 8:32am Apr 28, 2012 8:32am
The inflows + USD / JPY flows are the most important thing you need.

You really only need bonds/indices/equities for the larger trades. Even there it helps but it is not needed if you analyse all of your crosses the right way and wait for the right flows. All of the above are represented in the crosses. If you are playing the smaller tfs for a bunch of 20 pippers a day (which makes much more money than you could ever position trade anyways) then the currency flows are all you need.

Make sure to really really understand USD + JPY + partly CHF flows - especially the usdjpy section i talked about. Couple that with AU/AJ/CADUSD etc and most of the other stuff is a waste of screens and time. Mind that one of the hardest part of this all is organizing + representing all the information in an efficient way on your screens. If done right this is extremely hard (thats why i said you should look into custom indicies / charts) but the actual key - knowing how to harvest your data and how to compact it for you to be able to make realtime decisions on it!

We are not in the usual bullmarket people are used to and we won't be for some time. This is not the time to position trade. Watch the flows + maybe a few bonds and hit it hard but fast. % compounding makes money not overall pips. We range much much more than we trend big time and even there you get 2-3 reentries a day too. Don't make it more complicated than needed.
  • #43
  • Apr 30, 2012 1:58pm Apr 30, 2012 1:58pm
Hi,

If I want to calculate other currencies besides the described Eur and Usd, how do I obtain the numbers used in the calculations for other currencies, like for instance AUD?

See examples below:

EURXt=34.38805726 x (USDt)–0,3155 x (GBPt)0, 3056 x (JPYt)– 0.1891 x (CHFt) 0.1113 x (SEKt) 0.0785
USDXt=50,14348112 x (EURt)–0,576 x (JPYt)0,136 x (GBPt)–0,119 x (CADt)0,091 x (SEKt)0,042 x (CHFt)0,036.

Where can i get the data in red and green?
  • #44
  • Apr 30, 2012 3:26pm Apr 30, 2012 3:26pm
You mean the calculation of AUDX?

Check the indices post with the markit link. There you find up to date valuations for all major currency indices.
  • #45
  • Apr 30, 2012 4:46pm Apr 30, 2012 4:46pm
Quoting unknown4x
The inflows + USD / JPY flows are the most important thing you need.

You really only need bonds/indices/equities for the larger trades. Even there it helps but it is not needed if you analyse all of your crosses the right way and wait for the right flows. All of the above are represented in the crosses. If you are playing the smaller tfs for a bunch of 20 pippers a day (which makes much more money than you could ever position trade anyways) then the currency flows are all you need.

Make sure to really really understand USD + JPY + partly CHF...
Hi,

Could you please show some more current trades/examples of trade entries, with charts please. I am really interested but still a little overwhelmed by the process.

I mean exact entry points and why, sorry to be so pedantic.

Kind regards,
  • #46
  • May 1, 2012 7:16am May 1, 2012 7:16am
Quoting unknown4x
You mean the calculation of AUDX?

Check the indices post with the markit link. There you find up to date valuations for all major currency indices.
hi unknown4x,
this week the crosses move nicely as you can see on my attached image.
would you elaborate your view about this crosses move?
Attached Image (click to enlarge)
Click to Enlarge Name: fxperformance.png Size: 108 KB
...
  • #47
  • May 3, 2012 4:32pm May 3, 2012 4:32pm
Quoting bandung
hi unknown4x,
this week the crosses move nicely as you can see on my attached image.
would you elaborate your view about this crosses move?
As in why they did those moves?
  • #48
  • Edited 7:07am May 4, 2012 4:18am | Edited 7:07am
Quoting unknown4x
You mean the calculation of AUDX?

Check the indices post with the markit link. There you find up to date valuations for all major currency indices.
Interesting thread unknown4x.

I looked at the site you suggested but I can't find any figures for use in calculating the various indices. Looks like they're selling products. Can you provide a little more information about exactly how to calculate the various indices please? I'm very comfortable with MQL4 but I'm not too sure about the actual calculations.

Thanks for your help

LUx

I found this but I'm wondering where to find the multipliers and what they actually represent.

Inserted Code
ExtMapBuffer1[i] = 50.14348112 * MathPow(eurusd,-0.576) * MathPow(usdjpy,0.136) * MathPow(gbpusd,-0.119) * MathPow(usdcad,0.091) * MathPow(usdsek,0.042) * MathPow(usdchf,0.036);

Answered my own question...

Inserted Code
https://www.theice.com/publicdocs/futures_us/ICE_Dollar_Index_FAQ.pdf

Found the weights...
Inserted Code
http://www.markit.com/en/products/data/indices/fx-indices/rules.page?#
MT4 EA, Indicator and Alert Coder Since 2006
  • #49
  • May 4, 2012 8:20am May 4, 2012 8:20am
Oh yeah just noticed the markit link is wrong. You need to click on the rules section in the left to get the yearly updates on the indices.

http://www.markit.com/en/products/da...ces/rules.page

Constant factors + FX Weights is what everyone wants to look at.
  • #50
  • May 4, 2012 8:23am May 4, 2012 8:23am
Quoting luxinterior
Interesting thread unknown4x.

I looked at the site you suggested but I can't find any figures for use in calculating the various indices. Looks like they're selling products. Can you provide a little more information about exactly how to calculate the various indices please? I'm very comfortable with MQL4 but I'm not too sure about the actual calculations.

Thanks for your help

LUx

I found this but I'm wondering where to find the multipliers and what they actually represent.

[code]
ExtMapBuffer1[i] = 50.14348112 * MathPow(eurusd,-0.576)...

Be careful with this indicator. Almost all of them are wrong since they operate on fixed index counts of the bars e.g. they calculate eu_bar1 * gu_bar1 * au_bar1 or whatever. This is wrong!!! Metatrader is a POS the charts are all wrong since they contain holes. Bars that don't have volume are skipped. So bar index 1 on EU could be bar index 2 on GU etc. You need to calculate those offsets, fill holes etc if you use the MT pricefeed which i strongly discourage. As a free freed the jforex feed is very nice as you can also interface it properly via java. It has correct charts meaning there is always a bar for every instrument eubar1 = gubar1 and so on.
  • #51
  • Edited 9:18am May 4, 2012 8:46am | Edited 9:18am
Thanks for the tip. I'll look at jforex right now.

I just noticed it's only 14 day trial. Do you just start a new trial every two weeks?

Correction FXDD has a "free 365-day trial".

Can you explain the following a little bit more?

Quote
they calculate eu_bar1 * gu_bar1 * au_bar1 or whatever. This is wrong!!!

Lux
MT4 EA, Indicator and Alert Coder Since 2006
  • #52
  • May 4, 2012 11:01am May 4, 2012 11:01am
Quoting luxinterior
Thanks for the tip. I'll look at jforex right now.

I just noticed it's only 14 day trial. Do you just start a new trial every two weeks?

Correction FXDD has a "free 365-day trial".

Can you explain the following a little bit more?



Lux

Either start a new one over the weekends or get a real account with them. If you are with one of the mt4 bucketshops then you can only do much better with dukas. There is nothing worse and faulty then MT charts + brokers no matter what people tell you. First of all since all i know of are the biggest scammers on earth + its faulty by technical design already so... In case you use them for live trading make sure to use an introducing broker like molecule6 so that you get about 40% of your commissions back. Otherwise they are quite expensive for low volumes.

I got a real account with them but mainly use it for backend stuff since (except for some history server problems) the feed + api is pretty good. Most commercial feeds either don't even allow platform independent access via java (most feature some COM, .NET whatever main app that you can interface with other languages but that is still windows platform dependent) but also are not really better. I use another commercial feed for bonds/indices(dax etc) though.

The bar stuff is as follows:

Lets say the current candle on your chart is bar_index 0 so if eurusd[] is our price array then the current closing price would be eurusd[0] - the prev bar eurusd[1] and so on. If you want to calculate the standard usd index for 50 bars back (index = 50) you would calculate (MT)

usdx[50]= 50.14348112 × MathPow(eurusd[50],(-0.576)) * MathPow(usdjpy[50],(0.136))*MathPow(gbpusd[50],(-0.119)) * MathPow(usdcad[50],(0.091))*MathPow(usdsek[50],(0.042))*MathPow(usdchf[50],(0.036));

If MT charts were correct that would work. However they are broken. In MT if a bar had no volume (probably because the broker is even more crap...) it does not show as a ohlc = same price bar on the chart but it is omitted. The bar does not exist in your MT chart. So in the above example lets say 10 bars back usdsek had 0 volume and also had 0 volume 13 bars back and 15 bars back so 3 bars are missing for usdsek then the above equation will fail because the bar index 50 of eurusd will not match bar_index 50 of usdsek anymore! usdsek[50] will actually be the bar of eurusd[53] since usdsek skipped 3 bars. So you will get a false value for usdx. What you would have to do is use something like iBarShift (doesn't exist in MT5 -> need to search via bartimes) to calculate the correct barindex for each cross and manually fill holes with bar=prev_bar or something like that calculations. Whatever you do i can tell you it will be crap. On MT5 this gets even shittier since there is no fixed history but it gets loaded realtime which creates all sorts of new problems for you. So to put it short... if you are serious about multi currency calculations use jforex or get commercial feed without holes where all bars form no matter if they had volume or not so that every instrument has the same bar index for every bar.

Also make sure that you need invert the high/low values e.g. for the high in usdx for eurusd your need to use the low and for the low of usdx the high of eurusd in the calculation. The same goes for all the ones that need to switched around (via negative exponents) like gbpusd.
  • #53
  • May 4, 2012 12:32pm May 4, 2012 12:32pm
Quoting 4Xfactor
Hi,

Could you please show some more current trades/examples of trade entries, with charts please. I am really interested but still a little overwhelmed by the process.

I mean exact entry points and why, sorry to be so pedantic.

Kind regards,
Hi,

well its hard for me to do that. I will not show my chart setups / custom calculations since that is part of my edge and liquidity is your biggest problem once you get it right. A whole set of 24" pivot oriented screens with about 20 custom charts per cross wouldn't help anyone anyways. I do it in a very cross specific way.

If you invest some time in it and got a programmer on hand you will have a similar outcome yourself though. The basics that i outlined are more than enough to build yourself your own system (programming knowledge or help + a lot of logical thinking is a must though i agree) with the information. This is not a system itself. It's the basic logic how this market works. It is no indicator, signal generator or whatever. It tells you how to read larger participants from the charts with simple logic (but of course much much data). Also you will need some time (the usual 4 to 5 digit hours is realistic) to grasp the specifics of each cross that you want to trade + how it interacts with the others. The basic flows behave the same no matter which cross but there are specifics to each cross that make it somewhat unique if you want to nail it to the pip.


I might start an interactive thread in the future and talk about possible flows that i'm looking at before the fact except for <M3 since that is useless for following anyways. Much too fast and most won't be able to execute those flows with their broker anyways.
  • #54
  • May 4, 2012 1:16pm May 4, 2012 1:16pm
Quoting unknown4x
Hi,

well its hard for me to do that. I will not show my chart setups / custom calculations since that is part of my edge and liquidity is your biggest problem once you get it right. A whole set of 24" pivot oriented screens with about 20 custom charts per cross wouldn't help anyone anyways. I do it in a very cross specific way.

If you invest some time in it and got a programmer on hand you will have a similar outcome yourself though. The basics that i outlined are more than enough to build yourself your own system (programming knowledge or...
Ok, thanks very much for the feedback, really appreciate it.

Kind regards
  • #55
  • May 4, 2012 1:25pm May 4, 2012 1:25pm
Quoting 4Xfactor
Ok, thanks very much for the feedback, really appreciate it.

Kind regards
you are welcome
  • #56
  • May 5, 2012 2:06pm May 5, 2012 2:06pm
Excellent thread, unknown. Liteforex, with their SIG Trader platform, offers individual currency indices displayed in standard chart form, which is what I've been using as a reference for strong vs. weak comparisons, although in a rather basic (and what now seems crude!) way. Your simple USD > JPY formula regarding money flows, combined with more detailed analyses of associated minor crosses is a quantum leap beyond my methods. I can now envision huge improvements in my comprehension of what's going on, as well as the ability to make better decisions. Thank you for sharing this information.
  • #57
  • May 5, 2012 3:13pm May 5, 2012 3:13pm
Quoting Pinhead
Excellent thread, unknown. Liteforex, with their SIG Trader platform, offers individual currency indices displayed in standard chart form, which is what I've been using as a reference for strong vs. weak comparisons, although in a rather basic (and what now seems crude!) way. Your simple USD > JPY formula regarding money flows, combined with more detailed analyses of associated minor crosses is a quantum leap beyond my methods. I can now envision huge improvements in my comprehension of what's going on, as well as the ability to make better decisions....
Nice to hear. Be careful with the LF... indices. The USD one is ok as a general unweighted usd volume indicator but the other other ones i would personally throw away. Use the official / markit ones there. Good luck.
  • #58
  • May 5, 2012 4:34pm May 5, 2012 4:34pm
Hey unknown4x,

thanks for your good words. i'm using the currencystrenghtmeter since a long time. with this thread, i can proof the details an pick the best instrument from the fx-market. you are a good writer, please keep going this thread!

i have linked the forexfactory thread of currencystrengthmeter with this one as you are the human-currenystrength-man :-)

Kind regards...


chriss
  • #59
  • May 6, 2012 9:01am May 6, 2012 9:01am
Just saw that over at kk007s posts:

Inserted Video



This fits very well to money flows. Also tells a lot about how i trade and how i think about trading - timeframes, attitude, etc. Definitely worth a sitting back a few minutes and listening.
  • #60
  • May 16, 2012 1:57pm May 16, 2012 1:57pm
Hi unknown4x,

could you please tell your opinion about this comparative index tool
http://www.forexticket.com/en/forex-...-index#c_index

Does it fully enough for correctly spoting individual currency strength ?
0 traders viewing now