Human behavior creates repetitive patterns and this is why history repeats itself.
Researching the Foreign Exchange Market based on historical data and cyclical patterns.
Following the Smart Money
Smart money can be defined as the capital invested by traders with expert knowledge and often with inside information. Smart money can spot trends before others and trades basically against the general market sentiment.
Our research includes the following indicators:
Following the Long-Term Circles of Unemployment, Inflation, and Growth
Intermarket Analysis investigates the relationships between different financial markets. The following Intermarket analysis focuses on four major asset classes: bonds, currencies, equities, and commodities.
The Complicated Role of the US Dollar
US Dollar and Gold Price Adverse Relation
Crude Oil Relationships
EUR/USD & USDJPY Correlation to Equity Prices
Treasury Bills Correlation to the Forex and Equity Markets
During periods of macro uncertainty, investors tend to see equities, soft commodities, energies, and corporate bonds as sources of unwanted portfolio risk. This phenomenon creates an increased relationship between macro uncertainty, volatility, and cross-market correlations. A cross-asset correlation measures the degree to which the price of a financial instrument is affected by a change in the price of another instrument of a different asset class. In general, a correlation between two variables expresses an average relationship that is backed by historical data. The correlation coefficient receives values between -1.0 and +1.0, and that means:
+1.0 is the perfect correlation reflecting identical movements / directions
-1.0 is the perfect negative coefficient reflecting identical opposite directions
Institutional traders are large players managing great sums of trading capital. They include Investment Banks, Hedge Funds, Mutual Funds, Investment Firms, and some large Commercial Corporations. Institutional traders can manage their funds but also their clients’ funds. The Euromoney Survey can provide a good insight into the top institutional players in the Forex market.
Table: Comparing Institutional Traders to Retail Traders
An order book is a ledger showing the Depth of the Market (DoM) consisting of a complete list of buying and selling orders for a particular financial-traded asset at a particular time. Every trading order in the book includes price and volume. Every exchange uses an order book to record, match, and execute trading orders.
The book includes all buy and sell orders, plus the order history, and improves market transparency
The order book is updated in real-time throughout the trading day
The highest bid (buy) and the lowest ask (sell) are called the top of the book
The book can be visualized via the market depth chart that contains all active bids/asks
The order book includes all the ‘Makers’ and none of the ‘Takers’
Volume is a leading market indicator that can help traders to recognize strong trends and reversals, but also identify the current market phase and think ahead of the current price action.
The US dollar remains the dominant vehicle currency, being on one side of 88% of all Forex transactions (Euro 31%)
The Foreign Exchange market's daily volumes average over 5.0 trillion USD
FX swaps transactions reach 2.4 trillion USD per day (Forex traders are showing an increasing interest in derivatives contracts)
Options and Similar products reach 0.25 trillion USD per day
Five countries (UK, USA, Singapore, Hong Kong, and Japan) contribute 77% of all Foreign Exchange transactions
Algorithmic, Algo, Mechanical, Systematic, or Rule-Based trading, refers to a trading method where order execution is based exclusively on a pre-defined set of rules and instructions.
Creating Online your Own Customized Mechanical-Trading System
Complex algorithmic strategies require programming skills and the use of a powerful computer language, such as the cAlgo. An easy way to start your own mechanical-trade strategy without any programming skills is by using the EA builder.
This web app is free for creating a manual system but requires a one-time fee for building automated mechanical systems.
Trade Forex Currencies, Indices, Commodities, Shares, ETFs on MT4, MT5, or Tradestation
Design a full set of rules and conditions by also entering time intervals and other filters
During periods of macro uncertainty, investors tend to see equities, soft commodities, energies, and corporate bonds as sources of unwanted portfolio risk. This phenomenon creates an increased relationship between macro uncertainty, volatility, and cross-market correlations. A cross-asset correlation measures the degree to which the price of a financial instrument is affected by a change in the price of another instrument of a different asset class. In general, a correlation between two variables expresses an average relationship that is backed by historical data. The correlation coefficient receives values between -1.0 and +1.0, and that means: