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

[eclectic_e]

Dukascopy will not grant Live accounts to U.S. persons, there is a quality DEMO feed which is available to everyone.

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”…

[HyperScalper]

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”…

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

[HyperScalper]

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

[HyperScalper]

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:

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

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)

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

hyperscalper

[HyperScalper]

COMBINING CURRENCY STRENGTH TRENDING
WITH ORDER FLOW TREND BIAS

By using Market Depth Analysis (aka Order Book) from
a Dukascopy data source, we are able to determine the
direction of a Currency Pair through size placements
on the Order Book…

This yields a Predicted direction for each Currency Pair
individually.

But, it turns out from R&D Analysis that we can combine
or “aggregate” those Currency Pair directional biases, into
each Currency Strength so that we can basically predict
where each Currency is predicted to be moving…

Since Forex Currency Pairs, e.g. EUR/USD, are driven
primarily by the relationship between EUR Currency
Strength and direction, and USD Currency Strength and
direction…

… then if we know the EUR predicted direction (stronger or
weaker) and USD predicted direction (stronger or weaker)
then we can back calculate or derive Virtual Pairs Trend
predicted directions for each Currency Pair simply by
taking Pairwise relationships from the 8 major Currency
trend biases…

Thus, the Individual Currency Pair’s original bias estimate
can be “rolled up” into the Currency, and then back calculated
to yield a stable Virtual Pairs Trend predicted direction for
each of our 28 major Currency Pairs…

Thus a Virtual Currency Trend (VCT) for 8 major Currencies
yields a Virtual Pairs Trend (VPT) for the 28 Major Currency
Pairs… These are shorter term predictions, for timeframes
perhaps less than 1 hour, so suitable for Day Trading
or Scalping support.

hyperscalper

[bobart]

Like some others here, I follow the USD. After reading some of your ideas, it looked like a dollar index with different components and some other currency indices would be valuable.
Thanks.
Looked at Mladen’s USDX_Candles and the indices on Mataf.net as well as the links you have posted here. Will put some things in play next week (if I have time) as this thread has ideas that make sense.

[frandlost]

By using Market Depth Analysis (aka Order Book) from

a Dukascopy data source, we are able to determine the

direction of a Currency Pair through size placements

on the Order Book…

@HyperScalper, is oandas order book similar to what you refer to? Or is there really no comparison?

Tx,

KC

[HyperScalper]

oandas order book similar to what you refer to? Or is there really no comparison

Useless, most likely. Only a computer can properly analyze
the live Order Book anyway, and I don’t know whether OANDA
has any such API to stream the data into code.

I’ve found only one useful and free source, which is
provided by Dukascopy. But, in order to use it, you have to master their
proprietary API… Analyzing the Order Book is nearly impossible, and
does require extremely delicate techniques… but anyway it does
contain near term predictive information…

[EDIT2] A very large operation which was able to pay a few thousand
a month for a Forex exchange, using the FIX API (a huge undertaking)
might be able to do better. The beauty of Dukascopy’s feed is that
we are guaranteed 10 quote levels at all times, on each side of the
market, for each Currency Pair. That is sufficient to determine
market direction, most of the time.

In the last few weeks, I’ve managed to create a VPT (Virtual Pairs Trend)
which merges Currency Analytics with Order Flow and Market Depth Bias
to create what appears to be a “holy grail” type directional indicator
for the 28 Currency Pairs.

That would be an extraordinary claim, requiring extraordinary evidence;
and we’re still evaluating the predictive data
while at the same time developing BOTs which will trade on the
predictive properties of VPT.

We know that Forex Pairs are necessarily driven by the relationship
between the 2 constituent Currency valuations. Therefore, if we
can predict where each of the Currencies is moving; we can predict
where the Pair is bound to move… in real time

Trying to predict where a Pair will move, based only on the pair’s
apparent Price Trend, just isn’t good enough. Something behind
the dynamics is required; and that is based on Order Book behavior…

[EDIT] there is only one further area of R&D which we could calculate;
and that is to estimate Order Flow into each of the 8 Currencies … that would
be a fairly straightforward extension to what we’ve done already, and
perhaps would have predictive value… that remains to be seen… For
now, we have the VPT, based on VCT, where the latter is predictive
of the direction each of the Currencies and, by extension in turn, the
direction of each of the Currency Pairs (VPT).

hyperscalper

[bobart]

Coinbase Pro shows the order book, too, but for me, there is neither the time (nor inclination) for programming for live analysis. Sounds like that is a handy tool!
I do see the logic if you have an attached trading robot.

[HyperScalper]

Analyzing the Order Book using an algorithm has many
issues to consider. Before discussing these, though, there
is really one primary rule “Price moves to Size”. The way
it works, according to me, is that Market Makers place
size closer to the market, and then simply move the
market price into that size when they want to transact
with the retail players.

But measuring something like that is extremely difficult.

Complex Analyzers which capture observations over a window
of time, need to be placed at every possible discrete
price (anywhere close to the market) which capture and
timestamp sizes (quotes). But, in order to compensate
for “spoofing” they should look toward the minimum sizes,
rather than any peak sizes (possibly spoofed size)…

Analyzers on either side of the market are then asked for
their size evaluations; and those are combined to form a
"statistical" view of the size bias. In general, Price will
move toward size which is nearer to the market, and
larger than those on the opposite side of the market…
But it’s a beech to estimate In general, clearly
anomalous sizes should be thrown out of the analysis,
as these will usually produce false results.

When “wholesale” participants want to interact with the
retail players, they will then move size closer to the
market, and then simply move the market into the
size. Obviously these wholesale participants are taking
the opposite side of the retail public; and that will be the
case as they accumulate through a price trend; before
that trend will then tend to reverse. That’s why there is
"trending" so that Market Makers can perform their
accumulation and distribution activities… 'nuff said but
it is not an easy thing to measure.

hyperscalper

[bobart]

You know, HyperScalper, after putting into practice some ideas from your posts about strength and size, I’ve had a really good three weeks. Sincerely, thank you.

[HyperScalper]

Wanted to update information on News Event trading
and prediction methods. Here’s a video showing prediction
of an event that happened a few hours ago in CAD
Employment.

hyperscalper

[frandlost]

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.

This is a great explanation! Simple and Clear illustration! Thanks @HyperScalper

there

is really one primary rule “Price moves to Size”. The way

it works, according to me, is that Market Makers place

size closer to the market, and then simply move the

market price into that size when they want to transact

with the retail players.

This is very interesting. Will have to keep it in mind during chart analysis. TX.

KC