Our core trading logic was contributed to the Journal of Society of Technical Analysts by our CEO. It was published several days ago included our own view of system optimization, risk control. The full version is available via the home page of STA-UK. Welcome all feedback ot market discussions.
For the week ending March 23, USD shorts were pared back from -78K to -59K. EUR longs increased by 3K to 93K. Meanwhile, JPY shorts rose from -40K to -53.5K. GBP longs fell by 7K to 22K. CHF longs were cut back by 2K to 3K while CAD longs were pared back from 10K to 5K (the lowest level YTD). AUD longs were down 2K to 6K and NZD longs declined by 1K to 5K. MXN shorts were pared back from -30K to -21K.
The passive rebalancing model at month-end points to strong USD selling against EUR, JPY, and GBP and moderate USD selling against commodity and Scandinavian FX (Figure 1). The signals have strengthened from our preliminary run (see Thoughts for the Week Ahead: Ripples rock reflation ride, 28 March 2021).
IMM FX Positions: USD shorts’ decline stalls For the week ending April 13, USD shorts increased by 2K to -32K after falling for five weeks in a row. EUR longs declined by 1K to 67K. GBP longs increased from 20K towards 26K. Meanwhile, CHF longs declined from 3K to 1K. NZD longs were scaled back slightly from 3K to 2.5K, while MXN shorts were cut back from -13K to -12K. Net positions in JPY, CAD, and AUD were little changed.
USD shorts reduce to a score of -10 (-/+ 50 scale), as our proxy for technical investors and electronic trading venues reduce shorts. SEK longs unwind and the market builds shorts with a score of -11 driven by all components, with the exception of our real money investor proxy. Similarly, NOK longs unwind to a score of +9. While real money and technical investors hold longs, option investors and electronic trading venues remain short. EUR positioning shifts to a score of -4 from +6 last week, as our proxies for technical investors and electronic trading venues add shorts.
Ahead, all eyes will now on be on today’s NFP report at 13:30 BST. We forecasts a print of 1.15mn (median: 1mn; prior: 916k). The bar is high for these numbers to impress the markets. The above could be on account of the whisper number likely being even greater theconomists’ consensus. Thus for US yields to rise on a beat, we think the number would potentially need to come in well over one million job gains for April.
Asia post Friday’s NFP miss has seen US yields continue to tick higher with 10y trading at 1.5950% again afterFriday’s brief dip below 1.5%. It appears the market is continuing to internalise the beat in monthly AHE (0.7%MoMvs 0%e), which has bolstered short term inflation worries. This builds on recent bullish commodities price actionand input price trends in ISM data. Consequently we see the USD supported in parts, despite broader benign risksentiment exhibited in equities. As a result, commodity currencies trade flat overnight, with EUR marginally lower. GBP is the outlier gaining 0.3% to 1.4020 currently after no SNP majority post elections. Looking ahead, NOK CPI and SEK Riskbank minutes are the main data points due in G10. We also see Fed’sEvans on the slate later in the day. EM has no data of note today.
Fundamental views need to be verified by technical views, otherwise the fundamental view maybe wrong. Technical views need to be supported by fundamental analysis, otherwise it maybe a false signal or the trend may not develop very well. When they have the same direction, we may have a potential high convinced trading opportunity；If not, we may have to be cautious. This is our key trading logic.
All in all, in this system, all the orders are placed manually, but it is far beyond manual judgement only.
Thanks so much for reading our article. Market Technician was published since 1968, for now only has 90 volumes. It's one of the most professional Forex Journals around the world, we must fully cherish the opportunity to well express our core views in the 2000 words' article.
In addition, There are some general and important limitations for most EAs: 1. EA is based on a combination of Indicators. 2. Indicators are based on price and volume. 3. MT4 Price is from Liquidity provider, not accurate. If you set up the same indicator in the same pair but in different Brokers & CQG & eSignal charting system, the result may not the same, especially on lower timeframes. 4. Volume is from broker server and/or Liquidity Provider, in most cases, retail traders' volume is on the opposite of professional traders. 5. No reliable historical data for backtesting. I think even the best MT4 Tickdata is hard to 100% simulate the real trading conditions. 6. Too much over-optimization. This is a key issue for most EAs, cause their key logic could not work well, programmers have to adjust the parameters of the indicators to suit the historical data, which lead to excellent backtesting result and distorted performance in live trading.
Trading is much more than an EA. How to combine the technical and fundamental views together is the key to success.
If EA is as powerful as imagined, I think perhaps some major banks, such as Goldman Sacks, CreditSuisse, Commerzbank, would lay off all the technical analysts and economists and focused on EA coding only :)
However, MT4/5 is the most popular retail trading platform. We believe it is one of the best trading platform. Although we do not use it for major investment, it does very conveniently to trading.
The market is tricky around FOMC, being active traders, we must concentrate on the market firstly and apologize a lot for the delay.
1. Fundamental analysis based more on Economics knowledge. We have a key rule: 'Never try to directly trade against Central Banks'. From this perspective, you could try to read and analyze the Economic data. In addition, Fundamental views and/or models from some Major Banks are good references to us, such as Goldman Sachs, CreditSuisse, CommerzBank, Citi, BNP Paribas... Every trading day, we read and absorb as much as we can. However, we could not directly copy their views. We must think independently to get a basic view, if our views are supported by some major banks, then it may be a highly convinced idea; if not, we'll re-check it and perhaps further observation and consideration are needed.
Therefore, Fundamental analysis is completely different from guess work :)
2. We noticed there is a lot of signal providers' site shut down and numerous online coach site are more and more active during the past 5-6 years. Perhaps the reason is quite simple: 'coaches' do not need a 3rd party verified trading performance.
If you still want to follow a coach, we suggest you ask him two questions before making the payment: ①If what you taught is very useful and/or your trading system is quite profitable, why do you abandon trading yourself and spend so much time teaching other traders? ②Do you have 3rd party verified live account, even $100 balance, which could verify your trading logic?
Based on his answer, you could make further judgment.
3. However, in case you do want to learn something to prepare for the next stage in your financial career, we highly recommend you to visit the site of 'Society of Technical Analysts'. Their training/learning course is the best in the world. Some great professional traders, such as Karen Jones, Alel Rudolph ( CommerzBank ) are all active members of STA.
The overnight session was a bit of a stroll, with very limited price action leaving markets rangebound ahead of US CPI. The bid bias for USD dissipiated by the end of the Monday session, and our eTrading desk notes that interbank trading volumes were 20% below the 30 day average.
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Páka vytvára ďalšie riziká a straty. Než sa rozhodnete obchodovať s devízami, dôkladne zvážte svoje investičné ciele, úroveň skúseností a toleranciu voči riziku.
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