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Smallcat, Here is my Std. Currency strength (Spaghetti). Blue – EUR Green = USD Yellow = JPY vertical lines mark opposite direction of 2 currencies against the third one – denoting massive move. In those situations you can short the EUR against any other currency, almost blindly with almost 0 or minimal DD. G.
Thanks a lot G, so actually if we trade only 3 pairs (EURUSD, EURJPY, USDJPY) it is more than enough. We do not need to look at other currency, especially CHF
Or, if we have 3 of them in the same direction, then we just need to look for other currency (that most) in opposite direction ….No, that’s not the case.
You should, or can, trade any currency that is going up against any other currency that is going down – and the same for opposite direction.
I gave the example of the USD, EUR & JPY to make the connection to the “market share”. Those 3 currencies make more than 70% of the total volume of the market, and if you find such a situation – it’s going to be a massive move.
Also, from that example, you can see the “predictive” nature of “currency strength”.
G.
No, that’s not the case. You should, or can, trade any currency that is going up against any other currency that is going down – and the same for opposite direction. I gave the example of the USD, EUR & JPY to make the connection to the “market share”. Those 3 currencies make more than 70% of the total volume of the market, and if you find such a situation – it’s going to be a massive move. Also, from that example, you can see the “predictive” nature of “currency strength”. G.
Thank You GG53, At least My Kindergarten calculation at my previous post, incidentally.. use this 3 currencies.. lol. only because basic understanding that this 3 leading currencies of America, Europe and Asia.. regions, but also I use the ‘shadow’ currency for ‘anchoring’ that is CNY.
Best Regards.
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/No, that’s not the case. You should, or can, trade any currency that is going up against any other currency that is going down – and the same for opposite direction. I gave the example of the USD, EUR & JPY to make the connection to the “market share”. Those 3 currencies make more than 70% of the total volume of the market, and if you find such a situation – it’s going to be a massive move. Also, from that example, you can see the “predictive” nature of “currency strength”. G.
Thanks again G
Thank You GG53, At least My Kindergarten calculation at my previous post, incidentally.. use this 3 currencies.. lol. only because basic understanding that this 3 leading currencies of America, Europe and Asia.. regions, but also I use the ‘shadow’ currency for ‘anchoring’ that is CNY. Best Regards. MTH
Hi bro, China has the biggest economy growth at the moment in Asia (may be in the world?) , but the market share of CNY is only 1.1% (a little bigger than NZD). I am not sure it will give big impact to “currency strength” calculation.
No, that’s not the case. You should, or can, trade any currency that is going up against any other currency that is going down – and the same for opposite direction. I gave the example of the USD, EUR & JPY to make the connection to the “market share”. Those 3 currencies make more than 70% of the total volume of the market, and if you find such a situation – it’s going to be a massive move. Also, from that example, you can see the “predictive” nature of “currency strength”. G.
Thanks again G
Thank You GG53, At least My Kindergarten calculation at my previous post, incidentally.. use this 3 currencies.. lol. only because basic understanding that this 3 leading currencies of America, Europe and Asia.. regions, but also I use the ‘shadow’ currency for ‘anchoring’ that is CNY. Best Regards. MTH
Hi bro, China has the biggest economy growth at the moment in Asia (may be in the world?) , but the market share of CNY is only 1.1% (a little bigger than NZD). I am not sure it will give big impact to “currency strength” calculation.
My Brother, is not about market share, but it’s about ‘Who’ control the high market share currencies. China owned 1/3 world circulated USD, 1/4 world circulated Euro, and 1/5 world circulated JPY…lol.
And why World Bank only say 1.1% of CNY market share ?, because they can’t forced China Government to disclosed their current account. While you could find ‘Made In China’ in every corner of the World, do you still believe that market share data tell you the truth ?
Best Regards
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/China might be the biggest economy (or on its way there) but not in the Forex market.
USD is the “reserve” currency for central banks and all commodities relate to it, such as Gold, Oil, Metals, Grains etc. They are all bought and sold in USD.
That’s why CNY takes so little part in Forex.
There is some “movement” in this situation. China, Brasil, Russia and some persian Gulf Emirates start dealing in oil without the “mighty” USD – but thats not on a large scale and still very fragile and non conventional.
G.
China might be the biggest economy (or on its way there) but not in the Forex market. USD is the “reserve” currency for central banks and all commodities relate to it, such as Gold, Oil, Metals, Grains etc. They are all bought and sold in USD.
IMO, absolutely right! In spite it can work to choose CNY as a common anchor for EUR, USD, and JPY, it’s far from being my first choice for such an attempt.
When trading 3 currencies, why should I choose a fourth one just to calculate those crosses, if all crosses necessary are available as pairs ‘inside’ those 3 currencies in focus? This idea makes no sense for me.
Regards, simplex
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
China might be the biggest economy (or on its way there) but not in the Forex market. USD is the “reserve” currency for central banks and all commodities relate to it, such as Gold, Oil, Metals, Grains etc. They are all bought and sold in USD.
IMO, absolutely right! In spite it can work to choose CNY as a common anchor for EUR, USD, and JPY, it’s far from being my first choice for such an attempt. When trading 3 currencies, why should I choose a fourth one just to calculate those crosses, if all crosses necessary are available as pairs ‘inside’ those 3 currencies in focus? This idea makes no sense for me. Regards, simplex
Ah Yes Brothers, maybe I just too dumb and noob for this high level discussion.. please forgive me for that.. . I do create my own strength indicator that maybe too weird, but anyhow I could make profit with it, so I don’t mind if I wrong as long as i can make money with it…lol.
Wish You All The Best..
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/And this kindergarten strength calculation with CNY anchoring, make me loss 7 trades over 696 winning trades in February 2015… lol, so forgive me for being so noob..
best regards
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/Wow Kiads. That is an amazing result. I will have to look into incorporating currency strength into my trading.
Best, Michael
And this kindergarten strength calculation with CNY anchoring, make me loss 7 trades over 696 winning trades in February 2015… lol, so forgive me for being so noob..
Very impressive results my friend. And sorry for the delay in my replies everybody!
I read through the currency strength related discussion and it’s good! We need to talk more and more about this. Let’s talk a bit about what currency strength is first, shall we?
In my opinion, currency strength is NOT a currency index. It’s very easy to get the index value of a currency from currency pairs. All you have to do is pretty much set one to be value of 1 and in relation to that you can get the price of all the other currencies. BUT, the goal here is to measure the currency Strength! haha Not to get the price of USD or EUR or JPY because we already have these prices online everywhere and can easily derive it ourselves too. It’s nice to look at the currency index prices but I think the Strength is where the real Strength/advantage/edge is.So what is strength? Let’s think and discuss more about strength.. how can we define strength. In my first post I gave one idea from something that I thought of.. maybe it didn’t make much sense or maybe I failed to explain how its completely different from currency price indexes. I was talking about measuring the Impact or the Force. Imagine that I apply a certain amount of force to EURUSD, lets say positive force and then measure the impact or resultant force registered on XXXUSD and EURYYY pairs, wouldn’t that give me some indication about the strength of the XXX and YYY currencies?
I’m sure there are much much better ways to measure the currency strength.. so let’s focus on the strength, shall we?Focus, Patience, Determination & Order in chaos
My Brother, is not about market share, but it’s about ‘Who’ control the high market share currencies. China owned 1/3 world circulated USD, 1/4 world circulated Euro, and 1/5 world circulated JPY…lol.
Thanks bro, do you mean if CNY strong, it will give impact to USD, EUR, JPY ? How do you use CNY to measure currency strength?
How to measure currency strength? Probably not with data from metatrader.
Measure currency strength from: economic strength, GDP, inflation rate, balance of payments, interest rates, consumer confidence, Producer price index, business cycle, government deficits, stock market performance,population growth, etc.
Imagine that I apply a certain amount of force to EURUSD, lets say positive force and then measure the impact or resultant force registered on XXXUSD and EURYYY pairs, wouldn’t that give me some indication about the strength of the XXX and YYY currencies? I’m sure there are much much better ways to measure the currency strength.. so let’s focus on the strength, shall we?
This is interesting, it will impact all other currencies … In this case, do you prefer to calculate all 28 pairs brother ?
How to measure currency strength? Probably not with data from metatrader. Measure currency strength from: economic strength, GDP, inflation rate, balance of payments, interest rates, consumer confidence, Producer price index, business cycle, government deficits, stock market performance,population growth, etc.
Some thing like Fundamental issue ? Without data from metatrader (or other platform) i think it is difficult for us to calculate the strength …
Well, in my noob experiences, I use ‘anchor’ from currency that look like doesn’t give any impact to the market in the surface but actually control the world trade in reality.
Why I need ‘anchor’, is because i could measure the acceleration and deceleration of the speed of momentum.. and that is in my opinion what the market ‘strength’ is.. and not just ‘static’ share power.
And this kindergarten strength calculation with CNY anchoring, make me loss 7 trades over 696 winning trades in February 2015… lol, so forgive me for being so noob..
Very impressive results my friend. And sorry for the delay in my replies everybody! I read through the currency strength related discussion and it’s good! We need to talk more and more about this. Let’s talk a bit about what currency strength is first, shall we? In my opinion, currency strength is NOT a currency index. It’s very easy to get the index value of a currency from currency pairs. All you have to do is pretty much set one to be value of 1 and in relation to that you can get the price of all the other currencies. BUT, the goal here is to measure the currency Strength! haha Not to get the price of USD or EUR or JPY because we already have these prices online everywhere and can easily derive it ourselves too. It’s nice to look at the currency index prices but I think the Strength is where the real Strength/advantage/edge is. So what is strength? Let’s think and discuss more about strength.. how can we define strength. In my first post I gave one idea from something that I thought of.. maybe it didn’t make much sense or maybe I failed to explain how its completely different from currency price indexes. I was talking about measuring the Impact or the Force. Imagine that I apply a certain amount of force to EURUSD, lets say positive force and then measure the impact or resultant force registered on XXXUSD and EURYYY pairs, wouldn’t that give me some indication about the strength of the XXX and YYY currencies? I’m sure there are much much better ways to measure the currency strength.. so let’s focus on the strength, shall we?
Thank You Brother, .. the chain reaction is always there… and by knowing ‘where and when’ the reaction starting.. we will know the direction of impact..
Best Regards
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/Well, in my noob experiences, I use ‘anchor’ from currency that look like doesn’t give any impact to the market in the surface but actually control the world trade in reality. Why I need ‘anchor’, is because i could measure the acceleration and deceleration of the speed of momentum.. and that is in my opinion what the market ‘strength’ is.. and not just ‘static’ share power.
Dear Kiads,
Was this the “Momentum” you were telling me about that I could help better understand?
Best regards.
Nothing has ever motivated me more than this...
What is it, what you want us to show with this chart?
Can you explain how you calculate your currency strength with the anchor pair?
Dear Kiads,
Could you explain the bigger green and red dots in your setup (I’ve highlighted them in the figure attached).
Also I suppose you’re using 2 different BB’s with different deviations (2.0 and 3.0 perhaps.)
Best regards.
Nothing has ever motivated me more than this...
Well, in my noob experiences, I use ‘anchor’ from currency that look like doesn’t give any impact to the market in the surface but actually control the world trade in reality.
Hi Kiads,
Please allow a noob question: what’s the difference between having your anchor pair or not from a mathematical point of view? When the ticks coming in are correct then it shouldn’t make a difference at all, IMO. Did you check the difference?
Regards, simplex
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
Measure currency strength from: economic strength, GDP, inflation rate, balance of payments, interest rates, consumer confidence, Producer price index, business cycle, government deficits, stock market performance,population growth, etc.
Sure: fundamentals are important. And since we don’t get them directly via MT all we can do is to stay informed, interpret the facts and use that knowledge as some kind of bias filter in our strategies.
In the multipair EA I’m currently working on I will just set up manually tunable filters for every pair and currency, so the user can influence the strategy at any time – if he likes to.
Cheers, simplex
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
Well, in my noob experiences, I use ‘anchor’ from currency that look like doesn’t give any impact to the market in the surface but actually control the world trade in reality. Why I need ‘anchor’, is because i could measure the acceleration and deceleration of the speed of momentum.. and that is in my opinion what the market ‘strength’ is.. and not just ‘static’ share power.
Dear Kiads, Was this the “Momentum” you were telling me about that I could help better understand? Best regards.
Yes, Brother, momentum is just like if you press your car gas pedal.. previous candle move 10 pips, then current candle move 20 pips.. that mean acceleration..
@mth2014 What is it, what you want us to show with this chart? Can you explain how you calculate your currency strength with the anchor pair?
I take daily open price (GMT 0) from my anchor pair and normalize it then compare it to any pairs that will be measured (current candle close – daily open price). compare the distances, and No, I don’t put that in my previous chart example. I just show the chart because when we know ‘where and when’ the reaction start, you could open correct positions in any pairs.. just like in the example at EU and UC..
Dear Kiads, Could you explain the bigger green and red dots in your setup (I’ve highlighted them in the figure attached). Also I suppose you’re using 2 different BB’s with different deviations (2.0 and 3.0 perhaps.) Best regards.
That is my Star, Skull and Smiley sub-sequencer Indicator ..
Well, in my noob experiences, I use ‘anchor’ from currency that look like doesn’t give any impact to the market in the surface but actually control the world trade in reality.
Hi Kiads, Please allow a noob question: what’s the difference between having your anchor pair or not from a mathematical point of view? When the ticks coming in are correct then it shouldn’t make a difference at all, IMO. Did you check the difference? Regards, simplex
Hi Brother, as my explanation to Muuh, when we compare the strengths / pairs index without any anchor point, then we get relative distances depend on how many bars the shortest data feed is (let say from 28 pairs). But if we do it just like market profile calculation do.. then we could get static distance with correct ratio. CNY always stabilized with hourly basis intervention. that mean they use their reserves in USD, EUR and JPY.. (feel free to not believe this..lol).. If you checked CNY pairs you will always see ‘ huge spikes’.. in very low volatility..
Please forgive me if my explanations is not make sense at all… I couldn’t explained better due to my lack of English Language and my very limited knowledge in math..
Best Regards
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/CNY always stabilized with hourly basis intervention. that mean they use their reserves in USD, EUR and JPY.. (feel free to not believe this..lol).. If you checked CNY pairs you will always see ‘ huge spikes’.. in very low volatility..
Thanks for your fast answer! Ok – you’re relying on CNY as an assumed stable anchorpoint for different crosses. But why does CNY provide this stability? Is it because of the strength and growth of Chinese economy, or because of the active interventions of the Chinese government? This seems to be a dangerous game to me.
It’s absolutely fine for me if it worked for you in the past. Congrats for your success! But just have a look at what happened to CHF in January this year. Ok, maybe Switzerland isn’t so much bigger than Beijing Central Park, and it’s a different kind of story from that point of view.
From a practical point of view, you’d have to find a broker who offers a sufficient number of CNY pairs. And this is not one of the primary characteristics I use to find a broker who is suitable for me.
Anyway: I’ll think about your anchoring concept and try it in my CS indicator.
Thank you again!
simplex
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
CNY always stabilized with hourly basis intervention. that mean they use their reserves in USD, EUR and JPY.. (feel free to not believe this..lol).. If you checked CNY pairs you will always see ‘ huge spikes’.. in very low volatility..
Thanks for your fast answer! Ok – you’re relying on CNY as an assumed stable anchorpoint for different crosses. But why does CNY provide this stability? Is it because of the strength and growth of Chinese economy, or because of the active interventions of the Chinese government? This seems to be a dangerous game to me. It’s absolutely fine for me if it worked for you in the past. Congrats for your success! But just have a look at what happened to CHF in January this year. Ok, maybe Switzerland isn’t so much bigger than Beijing Central Park, and it’s a different kind of story from that point of view. From a practical point of view, you’d have to find a broker who offers a sufficient number of CNY pairs. And this is not one of the primary characteristics I use to find a broker who is suitable for me. Anyway: I’ll think about your anchoring concept and try it in my CS indicator. Thank you again! simplex
That exactly the point. CHF pegged to EUR previously, and most of market players think that is great until that ‘black Thursday came’. CHF hold the ‘real value’ until they can’t stand it anymore, and choose to release the tension in ‘shock’ mode, while CNY is in reverse direction they also hold the ‘real value’ by consistently intervene to keep their ‘export goods’ cheap.. and choose to release the tension step by step.. because they have ‘huge reserve’.. . Just remember when ‘China’ decided to release their ‘Gold’ reserve 3 years ago, the impact to gold price still not recover until today. I’m not worry about CNY at all, I just worry about USD, this dollar bubbling will end someday.. and market will be in very deep crash..
Best Regards
MTH.
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/Thanks for the answer @mth2014.
One questions still left. How do you normalize CNY?
Oh and why are using the CNY prize from the daily open and not hourly?
Thanks for the answer @mth2014. One questions still left. How do you normalize CNY? Oh and why are using the CNY prize from the daily open and not hourly?
Hi Brother, sorry I forget to answer..
Normalizing mean make it in same ratio.., for example you can’t compare EURUSD and USDJPY, because they has different digits, so we must divide USDJPY with 100. to add digits. So, we could compare EURUSD 1.12000 with USDJPY/100 =119.560/100 = 1.19560. and if we want to measure the distance we must make it in line too. so if we want to measure the distance between EUR and JPY then we should reverse EURUSD by math powering it and became USD EUR.
Actually, you could select any point in time to make it your ‘anchor point’ not necessary the opening day (GMT 0), but the logic behind that is, I want to see my chart just exactly same with that ‘big guys’ at London, and since they use GMT 0, so I also use GMT 0 server. Time Frames is just ‘visual illusion’ open price and close price is just an agreement to slash the continuous price line.
You ‘see it’ as bullish candle because it slashed by 15 minutes, when you slashed it with 30 minutes it could became bearish candle, or still slashed with 15 minutes but not begin with same minute, the result could also in opposite direction. At weekend we stop trading because Bank stop receive and deliver transactions, but price not stop and keep moving 22/7.
When you open your positions, actually you ‘anchoring’ your money with that point in time and price. You decide how much money in lot and later the increasing or falling of ‘value’ of your money is depend on the distance and ‘traveling speed’ of Price movement.
If You remember basket 101 systems, that create demo account with 14 pairs opening positions at the same time, and measure the values between the active positions to determine which pair is the strongest or the weakest or which one is jump from positive territory to negative territory v.v. that is actually what the strength measurement is all about. Why they need to open that 14 pairs positions in same time is because they need ‘anchor’… to measure exact distance..lol.
Hope you understand and best regards
MTH.
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/
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