Currency Strength Meter Analytics and Trend History (REALTIME and FREE)

Trading Tech and Tools
5

CHOOSING TRADES USING CURRENCY ANALYTICS – THINKING IN CURRENCY

Forex traders have a large number of choices, but what Currency Pairs should be traded, and what side (long or short) should we take? Most, if not all, traders focus upon the Currency Pair concept, but I
propose we focus on the deeper Currency Strength concept.

By having a Trend History of each relative Currency Strength, then we are able directly to derive
the highest probability trades, and to know the direction (or “side”, long/short) of the trade.

CURRENCY CLUSTERS

For this type of trading I choose to focus upon 28 major Currency Pairs, which are “driven” by the 8 major Currencies. It’s important to distinguish clearly between a “Currency” and a “Currency Pair”. Currency Pairs (aka exchange rates) are what Forex traders trade.

THE 8 CLUSTERS

Currency “clusters” or Pairs containing each Currency, which may be candidates for a trade (long or short). Items followed by “*” may also be available underlying certain Nadex ™ Binary contracts as well:

Currency: USD cluster: AUDUSD* EURUSD* GBPUSD* NZDUSD USDCAD* USDCHF* USDJPY*
Currency: EUR cluster: EURAUD EURCAD EURCHF EURGBP* EURJPY* EURNZD EURUSD*
Currency: GBP cluster: EURGBP* GBPAUD GBPCAD GBPCHF GBPJPY* GBPNZD GBPUSD*
Currency: CHF cluster: AUDCHF CADCHF CHFJPY EURCHF GBPCHF NZDCHF USDCHF*
Currency: CAD cluster: AUDCAD CADCHF CADJPY EURCAD GBPCAD NZDCAD USDCAD*
Currency: AUD cluster: AUDCAD AUDCHF AUDJPY* AUDNZD AUDUSD* EURAUD GBPAUD
Currency: JPY cluster: AUDJPY* CADJPY CHFJPY EURJPY* GBPJPY* NZDJPY USDJPY*
Currency: NZD cluster: AUDNZD EURNZD GBPNZD NZDCAD NZDCHF NZDJPY NZDUSD

SIMPLE FRACTIONS

A Currency Pair is a ratio or fraction with a “quote currency” and a “base currency”.
With any fraction A/B, of course (where A and B are CURRENCIES) the value will increase
if either (or both) A increases, and/or B decreases.

The table above shows you the Currency Pairs involving each Currency. A simple Tool
is developed to help you decide whether Long or Short should be your trade, in a given
Currency Pair, and guidelines provided for the method of Entering and Managing the
trades.

News events or daily major events (such as London session Open) are the triggers for
the largest movements. This is also a part of the trading methodology proposed.

ThinkingInCurrency dot com is a new domain which will present Tools and Consultancy
using this new method of trading.

HyperScalper

HyperScalper

6

Hi Traders,

A few comments about the attached 2 day historical view of Forex Currencies.

Note that 08:00 is the London Session, and see how EUR (green) “hooked” upwards
and then made a significant decline during the session. These suspicious hooks
in the hour or two immediately preceding the session are to be “faded” as we
expect the Currency to move in the opposite direction.

We could choose AUD to form a Currency Pair EUR/AUD which we would then
sell SHORT. (Disclosure: I did not take this live trade. This is Educational…) The
short trade yields in the range of 70-80 PIPs as can be seen in the attached
chart. (10:00 on the chart corresponds to 08:00 GMT due to MetaTrader server
being GMT+2 hours) The movement is due largely to the EUR movement, rather
than the AUD movement, as you can see.

We could also have paired the EUR with another Currency potentially as well.

Good Trading !
HyperScalper

Short-EURAUD.jpg700×335 53.1 KB

7

A VIDEO explanation of how Thinking in Currency
and usage of realtime Currency Trend Analytics supports
sound decisions, with or without knowledge of the
news events. The example is today’s 350 PIP upward
move in EUR/USD due to ECB’s decision to continue
quantitative easing and support of negative interest
rates in EUR Currency.

You can gain access to this facility and the methodology
behind its successful deployment for profitable trading.

HyperScalper

8

Happy New Year 2016

Just to post a clear signal, illustrating how Currency Analytics
should be used to choose Forex trading pair opportunities.

Here we see a “24 Hour Divergence” chart, where we bring
the Currency Strengths to the same value 24 hours in the
past, and then apply a multiplier to make the currency
distortions clearer.

Anything approaching +/- 40 or so should generate interest,
and here we choose EUR to sell, against the weak AUD.
We want to Offer about 10 pips above the market and, if
unfilled, no harm no foul.

We would hold this position for about 4 hours or so. From the
MT4 chart we see a drop in the range of 100+ pips. 10 pip
markers are shown for scale.

Good Trading !
hyperscalper

Signal-Short-EURAUD.jpg700×635 90.8 KB

Signal-Short-EURAUD-Price.jpg700×531 99.8 KB

9

It’s been a while since I posted anything to this thread.

Attached is a nearly perfect prediction based on Currency Analytics, which
predicts LONG AUD/CHF on the basis of the Currency Strength relationships
shown.

hyperscalper

Divergence36hours-Long-AUD-CHF.jpg700×463 83.1 KB

10

Hi Traders,

Just thought I should write some about the progress we’re making
in Currency Analytics.

Most people use “Currency Meters”. These are “a dime a dozen”,
often free, and are “completely useless”.

A couple of years ago, I set out to develop a Currency Analytics
approach which had the following characteristics:

  1. It was a good basis for Trading Signals, in choosing the
    Currency Pair to trade, as well as the direction.

  2. It worked for Medium to Longer term trades, for the “big”
    moves; but also for very short-term trades as well.

SO LET ME CONCENTRATE SOLELY ON THE MICRO-SCALPING
SIGNALS, which I’d wager is something nobody has done before
not in the retail space anyway.

Our software is layered on MT4 and is written in Java over the
NJ4X.com API into “pools” of MT4 “terminal.exe” processes.
This allows us to use nearly any “standard” MT4 brokerage,
and is also designed for the Trader Tools software to run mostly
unattended on a VPS or Dedicated Server, either Windows or
Linix. (Windows is definitely easier, but Linux definitely more
stable…)

I’ll attach a screenshot typical of what we see with our more precise
and fastest “realtime” indicator using Currency Strengths. These
are called the “Fast Delta Divergence” charts. They are “divergence”
because we pull the 8 Currency traces to the SAME normalized level,
at some time X hours in the PAST. Then we are able to watch them
as they “diverge”.

One of them is 3 hours, and the other is only 1 hour wide, and
these are available on our server; let me know if you’re interested
for FREE. When it’s “for free” it means you get limited support,
but you at least gain access to the indicators in a Browser.

Most proponents of “currency meters” trade “with the trend”, so if they
think one currency is Strengthening, they will assume it will continue
to strengthen and “go with it”.

We, on the other hand, trade “counter trend”, using Currency Analytics
features to pick the “pivot points” where a Price Trend reverses. Yes,
this can be dangerous, but we use Multiple Price Entries to get an
advantageous Cost Basis while we are waiting for Price to turn.
Of course, if you can “nail” the price pivot points, then that does
give you good trades. Most traders “chase” price, when they feel that
a Trend has been “confirmed”. But we don’t do that.

The Confidence we get by “knowing” that one Currency is “too strong”,
and another is “too weak”; is that it is fairly improbable that the pair
will continue to move with even greater Currency Divergence. Rather,
the higher probability is that it will reverse, as the Artificial Over/Under
Valuation of a Currency is relaxed.

Good Trading !
hyperscalper

FastDeltaDivergences.jpg700×450 82 KB

11

Hi,

The attached may be somewhat self-explanatory, but it shows
an Over Bought (above its “true” or expected value) Currency Pair,
which should be Shorted…

Also, we see the outcome in the price chart…

Quick Links – “Thinking in Currency” Server

hyperscalper

Cluster-AUD-OverValued-Reversion.jpg700×510 81.3 KB

12

Very interesting. :35::35:

13

Hi Traders,

It’s been a while, so here’s a refinement of a Scalping method using
Currency Strength index divergence within each of the 8 Currency
Clusters.

Basically, this is a way to detect Over- or Under-valuation of a Currency
Pair, based upon its congruence with other Pairs within the same
"cluster".

The cluster is used to estimate a given Currency’s Strength from
observations of that Currency within 7 Currency Pairs.

A high confidence trade is identified through 1) Cluster Divergence, and
then filtered or further qualified through 2) PIPs MA divergence in order
to determine whether a 10 PIP retracement may be available, as that
is the “nominal” target for this type of scalp.

I posted a video describing this approach here:


youtube dot com on the /hyperscalper channel
/watch?v=F2jLSJTLYeA

"Currency Meter Scanner Forex or Nadex Scalping with Cluster Divergence "

hyperscalper

1 Like
14

Hello, I am interested in scanners for currency trading MT4 platform. If anybody could assist would be greatly appreciated! I saw a person using this scanners on youtube channel of warrior trading, and the person was using them quit well. As i understand the scanners are telling him following things (except of time and stock name et.):

  1. which stocks are overbought/oversold on RSI indicators
  2. candlestick patterns (consecutive bull/bear candles, (you can manually adjust on how many consequtive bull/bear candels scanner will alert))
  3. It also shows the volume of a stock, and as i understand volume is not applicable for currencies (please comment on this, and any ideas for substition?)
  4. one column also says “rel. volume” any ideas what is it?

thank you in advance

the scanners are shown in this video

15

SEVERAL WEEKS OF CURRENCY HISTORY

I’ll try to post this information with some observations. Here we see
a devaluation of USD recently, due to Inflation Fears, with a rebound
in USD strength into the close of week trading in Forex.

Legend: JPY white
CHF light blue
EUR green
NZD fuchsia/pink
GBP dark blue
AUD gold/tan
USD red
CAD yellow

hyperscalper

CS-Std525h-end-week.PNG1048×832 418 KB

16

It’s been quite a while since I updated this thread. So much work going into software and especially BOTs to use the Currency Analytics data.

BUT… one indication has emerged as particularly “Holy Grail” like in its ability to pick out genuine opportunities.

It’s called OBOS (Over-Bought or Over-Sold) but I prefer to think of it as an indication that a Currency Pair’s price is “over-valued or too high” or “under-valued or too low” …

This concept involves estimating the “expected or true value” of the Currency Pair price, but noticing a significant over- or under-valuation of the normalized index price for that Currency Pair.

Once we have this information, we proceed to evaluate whether it MIGHT BE a “false signal” due to Over-Valuation in Recovery from a bottom, or Under-Valuation during a Collapse from a high.

When Market Makers want to lift from a Bottom, they “accelerate” a particular Currency Pair’s price and thus our system detects that as “Over-Valuation”. When Market Makers cause a Pair price to collapse from a Top, they also “accelerate” the Currency Pair’s paice downwards, resulting in a relative “Under-Valuation” of the Pair from its True Value…

Except for these Caveats, which result in “false positive” signals, the vast majority of Signals in a Market “steady state” situation are Valid and Correct for Over- or Under-Valuations, which provide opportunity for SHORT positions or LONG positions, respectively.

I’ll post a visual example of this in action, as there are many such examples. In only a small proportion of cases discussed above, the opportunity may fail to show the desired results.

hyperscalper

17

Here is an example of the significance of the OBOS Indicator in real time.

OBOS-GBP-CAD-Long.PNG957×786 465 KB

With Price movement here:

OBOS-Price-GBP-CAD.PNG1174×752 23.5 KB

Not only is this useful for Day Trading or Scalping, I am using it as the basis for automated strategies or “BOTs” to maximize selection of Long and Short opportunities, and it works pretty well…

The trace which is DARKBLUE with YELLOW dots corresponds to GBP and CAD so this is the GBP/CAD Currency Pair shown…

[EDIT for additional info] This is part of our “Cluster Dispersion” analysis, where Currency Clusters are analyzed for “outliers” from the expected “true” value…

hyperscalper

18

UPDATE ON AUTOMATED TRADING BASED ON OBOS.

First of all, apologies for such a gap in time since my last posting.
We’ve been working on Forex OBOS (Over-Bought and Over-Sold)
which is more accurately described as Under-Valued or Over-Valued
Currency Pairs, for the 28 Major Currency Pairs spanning the 8
major Currencies.

It looks like we’ve cracked the Holy Grail. We’re seeing 88% Wins
and over a couple of weeks the BOT accumulates roughly 4,800 PIPs
running up to a dozen or so concurrent positions, each of which is
composed of multiple entries on a given side of the market, that is,
either all Long, or all Short in a given Forex Symbol (Currency Pair)…

Each BOT Symbol “aggregate” position employs cost basis improvement,
using up to 4 total positions, staggered
at roughly 12 pip intervals, thus providing “cost basis” improvement.
Then a modified trailing stop strategy attempts to get the maximum
forward target distance from each Symbol, e.g. EURNZD or any other
of the 28 major pairs. This is not an “EA” hosted by MetaTrader, but
exists in a much more complex custom runtime environment.

The Forex market “decouples” individual Currency Pairs from their
"true" or “expected” values. By detecting these Market Manipulated
over- and under- valuations we simply Buy under-valued Pairs and
Sell over-valued ones…

I’ll try and keep you up-to-date on further developments for those
who are interested.

hyperscalper

19

Price Trend Prediction

One of the goals of over a decade of working on this problem is to be able to “see” the “underlying trend” before the Price makes its move.

Forex traders have a limitation that there is no “Time and Sales” available, which would allow for calculation of “Net Inventory”. The retail Forex trader lives in a decentralized market in which there are “ECN” pools perhaps but there is no centralized Time and Sales such as would be available in Futures markets through the CME, for example.

However, there is one brokerage in Switzerland, Dukascopy, which does provide a Market Depth feed. And from a Market Depth feed sufficiently rich, it is possible to make inferential derivations of a Time and Sales.

The existence of a Market Depth in near real time, allows us to view the sizes and prices on the BID side versus the ASK/OFFER side of the Market in the ECN which is being exposed.

From this, we can derive a “virtual” Time and Sales feed for Order Flow, but let’s leave that for later. What we’re considering now is just “the balance of the Depth of Market” or, as it is called “The Book”… Sometimes, this is called “Level 2” information but it opens a whole new world of information for the Forex trader.

While Dukascopy will not grant Live accounts to U.S. persons, there is a quality DEMO feed which is available to everyone. If you are a non-U.S. person, then you have a rich source of advantage IF you are able to fully exploit the Dukascopy Market Depth feed, and perform near real time computations.

TREND. Most of us want to “follow the price trend”. Obviously, that’s how you make money, by staying in a trend until price moves enough so that you have a comfortable profit.

Along with Currency Analytics based information, I’m planning to expose Trend information for the 28 major Currency Pairs, and make that accessible to interested traders. Since I have to calculate the information anyway, it’s not too much of a burden to make the data graphically available; and we’ll do that over the next few weeks…

Basically, the rule is that “Price moves to Size”. There are two aspects of Size on the book. The amount of BID size versus the ASK/OFFER size being advertised on the Depth of Market within a few PIPs of the inside market. Other things being equal, the side of the market with more size, is the direction that Price will be moving. Basically, Size on the Book “pulls” the price in its direction…

There is another, more subtle aspect of Size on the Depth of Market. And that is the “distribution” of size. What is the volume weighted average distance of the Sizes at each Price, from the inside market? Again, “Price moves to Closest Size”. The side of the market where the mean distribution of Size is closest to the market, is the direction in which Price will be moving. Again, Price is “pulled” toward the more “aggressive” advertised Size, which is that nearer to the inside market price.

So long as the “Size Bias” remains on one side of the market, the Price Trend will continue in that direction. It’s simple, but difficult and subtle to measure. I’ve just started graphing this information, but the attached will show what I mean with Price versus Size Bias. As you can see, the downtrend in price continues so long as the Size Bias remains down, on the BID side of the Market Depth.

hyperscalper

Charts-Price-Trend-versus-Size-Bias2.PNG976×621 16 KB

1 Like
20

WEEKEND TRADING USING CURRENCY STRENGTH TREND

Unlike most Currency Pairs, which are confusing, when we know the Currency Trend for a Currency, we can often “fade” the Trend on the Weekend. The Weekend is often a “reversal” for a Currency Trend. Just as a single example, consider USD which rose sharply into the Friday Close, and the results of SELLING THE USD CURRENCY for profitability, prior to the close, for profit-taking once the market has re-opened for nearly 24 hours:

SELLING A “BASKET” as follows: Currency: USD cluster consists of pairs: AUD/USD EUR/USD GBP/USD NZD/USD USD/CAD USD/CHF USD/JPY

SELL USD in a “Cluster Basket Trade” on Friday Close.
NOTE: Selling the Currency USD, as it appears in its 7 major Pairs, results in the following trades, and their current profit:

BUY AUD/USD for +40 pips
BUY EUR/USD for +68 pips
BUY GBP/USD for +80 pips
BUY NZD/USD for +40 pips

SELL USD/CAD for +20 pips
SELL USD/CHF for +55 pips
SELL USD/JPY for +10 pips

And so this is a clear demonstration of the effectiveness of Currency Trend information in Forex trading. The image is from a private Whatsapp chat group.

hyperscalper

CurrencyTrendWeekendPositions
CurrencyTrendWeekendPositions754×724 207 KB

21

Hi HyperScalper –

Which platform – MT4 or JForex – do you use to get the Depth of Market data, and how do you find it?

I’ve been following the offshore forex brokers thread off and on for about a year, and saw your link to this thread. Your post inspired me to finally sign up on babypips today, so thanks!

I came upon Dukascopy a few weeks ago by googling market sentiment data. I inquired about live accounts for US persons, and they said no, but I still look at some of their data. Your suggestion about market depth is most interesting to me!

The IT side of what you write is beyond me, but your market insight is very interesting. I approach the market from the angle of stats & geometry. I’m an Economist with a strong math & science background. I only know enough IT to be dangerous.

Hope to hear from you about this and other market type stuff… thanks!

PS: The title of my profile pic is “Resistance becomes support in a non-trending market”…

22

DEPTH OF MARKET is given through the Dukascopy “standalone Java API” and is available in the incoming Tick Streams. Extensive analysis allows us to use this information for 1) Price Trend prediction, and 2) Virtual Time and Sales and Inventory analysis through some “deep processing”, which leads to Order Flow and Risk analysis, so this is an extremely valuable source of information. U.S. persons can use the Demo feed, or consider partnering with someone with access to the Live account feed. But without the processing algorithms, it may not appear to be useful information.

MT4 has no market depth; and even MT5 which promises Market Depth, is completely useless. Dukascopy’s feed is the only accessible stream I’m aware of which can be exhaustively and reliably analyzed.

We offer open access to the data, unless and until we start to see a performance impact; via browser access. However, for support and training on how to use that information, you’d want to explore a paid member relationship.

hyperscalper

23

It’s been too long that I haven’t posted anything…

I’ve done some YooToob videos which could be found
searching using my name.

Attached is a screenshot showing how CAD lifted and
reverted, with a warning that a Divergence view of Currency
Strength History can be very very misleading, so always
look at the “wider picture”.

As shown on the screenshot, with 6h and 12h Divergence,
the data is available at http://xscalp.com/quick but extensive
usage would benefit from a membership arrangement for
support on how to use such indicators for trade signals…

[EDIT] without the knowledge and experience to interpret
these views, especially Divergence (which brings traces to
a common level at some fixed time in the past) , you will make
“beginner mistakes” in interpretation. Stick to the Standard
Charts, but use Divergence as a tool as you begin to approach
choosing individual Currencies to pair together in a Forex trade.

hyperscalper

CS-CAD-relaxation-end
CS-CAD-relaxation-end1070×841 229 KB

1 Like
24

PREDICTING THE FOMC USING CURRENCY TREND ANALYSIS

Let’s stick our necks out and predict the FOMC effect on USD about
4 hour prior to the event.

Firstly, we look at 6 weeks of trending and note that we are roughly
in the middle of our range:

CS-Big-Picture-USD-mid-range
CS-Big-Picture-USD-mid-range1039×846 408 KB

Then we “zoom in” and use a Divergence view to identify “features”
in the Currency Trending traces which are predictive:

CS-USD-Features-ahead-of-FOMC
CS-USD-Features-ahead-of-FOMC1039×851 422 KB

Examples are “gaps down” over the weekend (the flat line)
as well as “down spikes” which are compatible with “support”
for THE CURRENCY (not Currency Pairs yet…)

And finally we decide that USD is set to RISE, and we know
that USD will not make any extreme or quick moves but that
it will rise, based upon our Analysis.

So, finally, we choose some Secondary Currency to “pair with”
the USD to give us the highest probability of profit return.
(I’ll let you think about that) :slight_smile:

I’ll be back after the event, to see how well our Predictions
played out ! Good Trading !!

hyperscalper