Strong - Weak Currency Analysis

not trying to speak for cindyxxxx but he is a smart guy.

he probably is referring to the mean reverting tendency of currencies.

so If a big move is present odds are that it will correct as opposed to some stocks that pick up steam.

I did a study from inception the lambda for any given move is 2
(l^k)*(e^-l)/factorial(k)

will give you the probability density and cumulative function of K.

in plain english.... every leg moves up an average of 2 days before correcting (the key word is AVERAGE) the further the move is away from the average the more probability of correcting

i.e if the euro has moved up 4 days (to be more clear, has had EXACTLY 4 negative days (no positive days in between)) then that should encompass 94.73% of observations as to have 5.27% probability of continuation....basically is bound to post a positive day.
again probability here...even .01% has .01% probability of occurring as an outlier.

I feel that can try short on EU, GU and long on UC now.

Most of the current pairs will be narrow today.

Pay attention to the long entry point of AU and AJ. It can happen somewhere today.

Entry Point = The Exit Point of the earlier trade

Seem like direction has changed.

Sorry, Entry Point not equal to The Exit Point of the earlier trade most of the time. It depends on which section of what chart.
H4, D1 chart ok, not on M15, M30 and H1 chart, the risk is too high.

U and J will be weak, accumulate all the pairs against them.

What a long waiting yesterday for the turning.

All the hard work paid off, pocketed about 1500 pips. More to come.
All against J will be moderately up now.
Against U will be moderately down.

I use SAR. Dealing with True or False signal all the time. Example
H4 chart, triggled up, if you judge it as a false signal, than the down on the H1 chart will be true.
Same principle apply to others TF charts.

In the case of Truth, every trigger of down on the H1 or M30 charts will be a good entry point.

Doing Strong Weak analysis of currencies can be quite helpful in identifying pairs with higher probability of prediction of trends. We look at 4 hourly chart to determine strong-weak pairs.
For today, Canadian dollar has shown strong move with positive trends against all 7 other currencies and becomes our first strong currency. Next is USD which keeps showing strong moves against all other currencies except the CAD. GBP also remains strong and is next in line. Weak currencies for the day starts with JPY with negative moves against all the currencies. This is followed by AUD which kept moving lower against the dollar when EUR did not and showed more strength than AUD. NZD is also relatively weak and some interesting setups are possible for currency pairs with NZD.
Some Ideas:
Long GBPNZD.
Short AUDUSD.
Long USDJPY.
Happy Trading.

See Post #15, page 1 of this thread:


Having thrown out the 200 period moving average, and the 4hour chart as well, here is the first round of live test results with just a few basic preliminary rules:

October 2012:
22 samples
16 Fills -72.7% Fill Rate (16 divided by 22)
10 Wins - 62.5 % Win Rate (10 divided by 16)
4 Losses - 25% lose Rate (4 divided by 16)
2 Break Evens - 12.5% BE rate (2 divided by 16)

These results convince me that this strategy, along with more specific rules, may have something to it.

For November, based on October results and previous backtesting results, I can now tweak the rules and work with far more specific entry zones, risk zones and target zones.

I also am working with a couple different indicators that may help filter the potential losses.

Will post again at November’s end with more specific results regarding pip totals and risk reward ratio results.

Happy Trading All...

This is 1 indicator, I made. Its based on a real weighted index. As of real, i mean based con something that has an intrinsic value like gold.

When red line and blue line cross up/down green line, there is a bias. yesterday's data showing bearish bias on eurusd.

All trades closed yesterday against J. Gain Another 600+ pips. Start accumulating again.
From D1 chart, all against J will be up.

My experience was that, if we trade according to the signal, most of the times are either margin very small or end up with a lost trade.
We can not depend on the indicators of one TF. Very difficult to have long stretch of movement like those days.

Most likely this wave will have new week high.
The wave seem to be strong. The retreat is small.

Lousy trade, lost 50 pips.
What is next. Still believe that U and J are weak.

Recover the lost earlier and with +20 pips.
The UJ take so long the cross the 80 level, this make me don't feel confortable.
U is controlling it value. Lost direction now.

The target for normal trading is only 100 pips a day. With eye open.
The abnormal trading method is with the eye closed. Set the trade limit at a confert limit and fight for it. That type of situation happened few time a month, sudden swing up and down and back to normal.