FXCM/DailyFX Signals and Strategies

Hi HB,

Welcome to the thread

The crowds try to pick bottoms during a downtrend and try to pick tops during an uptrend. Sometimes they will be right, but it's usually better to trade with the trend than against it. For this reason, SSI can be a powerful contrarian indicator as you can see from this graph.

http://media.dailyfx.com/illustratio...Picture_16.png

The graph above overlays the AUD/USD chart on a bar graph of SSI for the same time period. Notice that when SSI is positive (green bars show when traders are net long), AUD/USD tends to fall, and when SSI is negative (brown bars show when traders are net short), AUD/USD tends to rise.

No indicator works 100% of the time (if you know of one, please tell me ) That's why it's important to use stops to cut losses on a trade that's not working out.

Jason

How to View Custom Time Frames on MT4 Charts

This question came up in another thread, so I thought this information would be of interest to others who use the MT4 platform. There's an indicator called "Custom Time Frames" that will allow you to create charts in any time frame you choose. That means you are no longer restricted to the nine default MT4 chart timeframes.

http://www.fxcmapps.com/wp-content/u...ames-thumb.jpg

You can create 10-Tick charts, 20-Minute charts, 2-Hour Charts, etc. "Custom Times Frames" is free to download at FXCMapps.com along with other custom indicators, EAs and scripts for MT4, Trading Station and NinjaTrader.

New trade alert for USD/JPY

Jamie Saettele, the senior technical strategist for DailyFX.com, just tweeted about his new trade alert for USD/JPY:

"order to short USDJPY at 99.70. Stop is 100.60. Target half at 99.00. Other half will be trailed but the soft target is 95.40."

http://img689.imageshack.us/img689/3175/sdzb.png

Jamie Saettele mentioned yesterday in the Analyst Picks section of DailyFX.com that he was looking for an opportunity to enter a short position on USD/JPY after the pair seemed to find resistance at the 61.8% retracement level.

More sellers have since come in at the 50% level, and Saettele has now updated his pick with this alert to include his entry, stop and profit targets. To get his updates in real-time you can follow Jamie Saettele on Twitter.

Bullish signs for AUD/USD after Fed comments are released

The US dollar was hit across the board as Bernanke's prepared comments were released this morning for his semiannual testimony at Congress. While European currencies are struggling to rise further from here, the commodity bloc currencies are continuing to show signs of strength.

http://img35.imageshack.us/img35/1843/1qsf.png

As you can see from the chart below overlaying the price for the Euro on a 1-minute chart of the AUD/USD price since the release of the Fed minutes after 12:00 GMT.
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Currency analyst Christopher Vecchio just tweeted about a potential bottom in the AUD/USD downtrend with a broadening wedge shown in his chart below.

http://img577.imageshack.us/img577/9052/v415.jpg

To view the complete details for analyzing this chart setup and to continue to get his latest trade ideas, you can follow Christopher Vecchio on Twitter.

APIs - Application Programming Interfaces

FXCM offers free access to three different APIs (Application Programming Interfaces) allowing you to create custom functionality for both charting and placing trades.

ForexConnect (C++/.NET/Java API designed from scratch for the highest level of flexibility)

1. Same trading functionality as the FXCM Trading Station
2. Both low level messaging structure and table structure with calculated fields
3. Able to get historical data

Java API (scalable, light and robust for those looking to create either a client or server side application)

1. API Object model is based on the FIX specification for forex
2. Message-based structure is very light
3. Able to get historical trades and rates

FIX API (standard messaging protocol which is used globally in many markets such as equities, futures, and forex)

1. Real time transactions
2. FIX version 4.4
3. Rates pushed and not pulled

For more information and for support using our APIs, visit our FX Programmers site.

US Stocks Trading at All Time Highs

Last week, I mentioned that US stocks could possibly be targeting new highs, because our Speculative Sentiment Index (SSI) shows that retail traders are heavily short SPX 500, and this is a contrarian signal to buy.

Today both the S&P and the Dow reached new all time highs at 1687.47 and 15543.21 respectively. The Technical Analyzer on DailyFX PLUS can be used to find key price levels to target when the market is trading at all time highs.

SPX500

http://img27.imageshack.us/img27/3011/k6n8.gif

The chart above is of SPX500, our CFD for the S&P 500. The Technical Analyzer is targeting 1693, 1696 and 1701 as key levels now that we're trading at all time highs.

US 30

http://img843.imageshack.us/img843/5199/8kv.gif

The chart above is of US30, our CFD for the Dow Jones Industrial Average. The Technical Analyzer is targeting 15460, 15490 and 15560 as key levels now that we're trading at all time highs.

There are more details about these key levels on the Technical Analyzer on DailyFX PLUS.

Japanese Yen Likely to Fall to Fresh Lows

The markets are keeping a close eye on the outcome of Japan's upper-house elections. The latest polls suggest Shinzo Abe’s LDP party will gain a large majority, allowing the Prime Minister greater scope to push his aggressive program to lift Japan out of deflation. That translates to a weaker yen.

http://media.dailyfx.com/illustratio...Picture_17.png

While the latest readings from the Speculative Sentiment Index (SSI) show that forex trading crowds remain long USD/JPY, the positioning has grown far less one-sided since last week. The shift in sentiment actually leaves us bullish USD/JPY and broadly bearish the Yen itself.

http://img198.imageshack.us/img198/6929/u40.png

If we enter a long position at current levels, we can set a stop below the 61.8% Fib retracement level of the down move since May. Our profit targets can be set around the 76.4% Fib level at 101.383.

Tidal Shift Strategy buys EUR/USD

The Tidal Shift Strategy (also known as the Momentum2 Strategy in the Classic Trading Signals section of DailyFX PLUS) has just given a signal to buy EUR/USD between 1.31403 and 1.31789 (between the blue dotted lines in the chart below) with a trailing stop at 1.30825 (red dotted line).

http://img16.imageshack.us/img16/4222/8pns.png

Tidal Shift is a trend trading strategy that aims to catch shifts in trend using trader sentiment as an indicator. The signal was issued because our Speculative Sentiment Index (SSI) has hit its most extreme negative level for the past 145 trading hours at -1.7669, which suggests that the EURUSD could be trending upwards.

The Tidal Shift Strategy can be automated using the Mirror Trader platform. If you have a live FXCM Trading Station account, you can use the same username and password to log into Mirror Trader.

Signs for a Pullback in Crude Oil

In his article today on DailyFX.com, senior technical strategist Jamie Saettele explains why the latest data from the Commitments of Traders (COT) reports show signs that crude oil could pull back from recent highs. Given this bearish signal, we can look to the Technical Analyzer on DailyFXplus.com for key price levels to go short.

US Oil (WTI Crude) 30-Minute Chart

http://img96.imageshack.us/img96/5705/la5.gif

A short position can be entered at current levels with a stop above 107.20 and profit targets around 105.70 and 104.75.

Kiwi Bullish going into RBNZ Rate Decision

The kiwi edged has higher against the US dollar as New Zealand reported a better-than-expected June trade surplus. NZD/USD is currently trading above daily pivot at 0.7900 and targeting 0.8050, 0.8100 and 0.8145 headed into the RBNZ rate decision at 21:00 GMT which will be covered as it happens by John Kicklighter in the DailyFX Live Trading Room.

NZD/USD 30-Minute Chart

http://img826.imageshack.us/img826/601/q81.gif

Economists surveyed by Bloomberg expect the central bank to maintain the rate at the current 2.50%, but Credit Suisse's overnight index swaps indicate market expectations for a 40% chance of a rate increase in the next 12 months which could move NZD/USD higher.

Sentiment Points to Further Gains in EUR/USD

The brown bars in the Speculative Sentiment Index (SSI) graph below show that traders have remained short the Euro against the US Dollar since it crossed above the $1.28 mark. Since SSI is a contrarian indicator, this is a sign that EUR/USD gains can continue.

http://media.dailyfx.com/illustratio...Picture_12.png

A long position could be entered on a break above the 76.4% Fib level at 1.32600 shown below (blue dotted line) with a stop set below the 61.8% Fib level at 1.31634 (red dotted line).

http://img594.imageshack.us/img594/3158/noab.png

The profit target can be set around the high set last month at 1.34161 (green dotted line).

Bullish Signs for Aussie headed into Data-Filled Week

This week has been light on economic data releases. By contrast, the schedule next week is packed full with consumer confidence figures, an FOMC meeting, CPI data, manufacturing numbers and Non-farm Payrolls.

http://img22.imageshack.us/img22/7596/35sm.png

Expect volatility! While past performance is not necessarily indicative of future results, volatile market conditions have traditionally been favorable the sentiment-based strategies on DailyFX PLUS.

DailyFX Individual Currency Pair Conditions and Trading Strategy Bias

http://media.dailyfx.com/illustratio..._Picture_2.png

In particular, the Momentum2 strategy has given a signal today to buy AUD/USD between 0.9264 and 0.9312 (blue dotted lines below) with a trailing stop at 0.91922 (red dotted line).

http://img801.imageshack.us/img801/6900/zdit.png

You can automate the Momentum2 strategy on your FXCM account via the Mirror Trader platform where it is known as the Tidal Shift Strategy. The same username and password that you use to log into Trading Station will allow you to access the Mirror Trader platform.

Slew of Economic Data Favors Volatility

Last week was rather boring in terms of scheduled event risk, but fundamental traders will be more than satisfied with the upcoming slate of data releases.

http://img22.imageshack.us/img22/7596/35sm.png

That spells volatility. One of the currency pairs traditionally favored by volatility lovers is GBP/JPY. Not surprisingly our sentiment-based Momentum2 strategy on DailyFXplus.com has generated a trade signal to start this week.

http://img15.imageshack.us/img15/2262/vige.png

The signal is to short GBP/JPY with a trailing stop at 152.387.

http://img833.imageshack.us/img833/9240/rmg.png

The Momentum2 strategy can be automated on your FXCM account via the Mirror Trader platform. The same username and password that you use to log into Trading Station can be used to access Mirror Trader.

Signs Oil Could Be Header Lower

In his article today about trade setups for commodities, DailyFX strategist Ilya Spivak identified an opportunity to short US Oil (WTI Crude) with recent price action confirming the bearish evening star formation on the candlestick charts last week.

http://img818.imageshack.us/img818/7290/2pni.png

"Prices turned lower as expected. Sellers have now overcome support at 105.06, the 23.6% Fibonacci retracement, exposing the 38.2% level at 102.70. A further push beneath that aims for the 50% Fib at 100.79."

EUR/USD breaks trend heading into FOMC

The FOMC announcement isn't until 18:00 GMT today, but DailyFX trading instructor Jeremy Wagner sent out a tweet this morning about the following chart breakout for EUR/USD.

http://img268.imageshack.us/img268/9157/np7w.jpg

A short position at current levels could target 1.2750 and 1.2250 with a stop around 1.3350. To always get his latest trade ideas, you can follow Jeremy Wagner on Twitter.

July NFPs Bearish for USD/JPY

In his quick recap of the July employment report, currency analyst Christopher Vecchio had this to say:

THE TAKEAWAY: US labor market continues to improve only at a modest pace (+150K to +200K), but July report disappoints handily > Participation Rate falls leading to decline in Unemployment Rate > Second US data poor as well > September QE3 taper in question > USD/JPY BEARISH

USD/JPY 1-minute Chart: August 2, 2013

http://media.dailyfx.com/illustratio...0000_i1027.png

There is an opportunity to enter a short position in USD/JPY if the pair continues below 98.756 (blue dotted line) which is the 50% retracement level of the downtrend since May.

http://img51.imageshack.us/img51/975/wqin.png

The stop could be set above the resistance that has been established since the NFP announcement today around 99.50 (red dotted line).

http://img837.imageshack.us/img837/9392/1s6p.png

The profit target can be set around the 38.2% fib level at 97.582 (green dotted line).

To start the new trading week, senior technical strategist Jamie Saettele tweeted about his latest trade idea to short GBP/USD. As you can see from his chart below, the pair is currently trading near the top of a descending trend line.

GBP/USD 4-Hour Chart

http://img585.imageshack.us/img585/6794/ezu.png

A short trade entered at current levels could target 1.52495 and then 1.50265 with a stop above 1.53862. Too keep up to date with his latest trade ideas, you can follow Jamie Saettele on Twitter.

RBA Comments Bullish for Aussie

As expected, the Reserve Bank of Australia cut their target interest rate from 2.75% down to 2.50%. However, the RBA did not repeat its message from July, which was that inflation provided scope for further easing. This implies a possible end to rate cuts for the time being and is bullish for the Australian dollar.

http://img94.imageshack.us/img94/513/ulcl.png

Looking at the DailyFX trading signals, we see that the Momentum2 Strategy has just given a signal to buy AUD/USD. The signal was issued because our Speculative Sentiment Index has hit its most extreme negative level for the past 145 trading hours at 2.0759, which suggests that the AUD/USD could be trending upwards.

http://img843.imageshack.us/img843/3269/95aa.png

The strategy recommends entering this trade at any price between 0.89648 and 0.90084 (blue dotted lines in the chart above). A trailing stop has been set at 0.88995 (red dotted line).

You can automate the Momentum2 strategy on your FXCM account via the Mirror Trader platform where it is known as the Tidal Shift Strategy. The same username and password that you use to log into Trading Station will allow you to access the Mirror Trader platform.

Chart Setup to Short USD/CAD

The DailyFX education team just tweeted about this chart setup for USD/CAD. The pair found bearish divergence with the slow stochastic oscillator as price just retraced 50% of the prior move.

http://img27.imageshack.us/img27/3615/up9z.png

An short position entered at current levels could target 1.0300 with a stop at 1.0450. To keep up to date with all their latest trade ideas you can follow the DailyFX education team on Twitter.

Traders Have Never been More Long US Dollar - What Now?

The latest weekly update of the Speculative Sentiment Index (SSI) has just been posted on DailyFX.com and they show that traders have never been more long the US dollar. For example, the SSI reading for EUR/USD is -3.48 meaning that there are 3.48 short positions for every 1 long position.

http://media.dailyfx.com/illustratio...Picture_16.png

This combined with record open positions in the pair mean that retail traders have never before been this short the Euro against the US dollar. Notice below how EUR/USD tends to rise when SSI is negative (brown bars) and tends to fall when SSI is positive (green bars).

http://media.dailyfx.com/illustratio...Picture_11.png

SSI is a contrarian indicator, which means the fact that crowds are heavily short the pair is a bullish signal that the pair could rise higher. With this in mind, we can look to the Technical Analyzer on DailyFXplus.com to get key levels to enter a long position.

http://img694.imageshack.us/img694/7030/z9c4.gif

The Technical Analyzer says a long position could be entered at current levels with stops below 1.3325 profit targets around 1.3415, 1.3450 and 1.3490.