Currency trading signals on DailyFX+ have been expanded to our newest offering: interactive system trading alerts that update on a dynamic basis. Our exciting new product is exclusively available to FXCM clients and increases the value-added of our enhanced DailyFX+ website. The following DailyFX.com report has been designed to advise when we may expect specific strategies to perform better than others and provide general guidelines to using these trading signals.
Currency trading signals on DailyFX+ have been expanded to our newest offering: interactive system trading alerts that update on a dynamic basis. Our exciting new product is exclusively available to FXCM clients and increases the value-added of our enhanced DailyFX+ website. The following DailyFX.com report has been designed to advise when we may expect specific strategies to perform better than others and provide general guidelines to using these trading signals.
Forex Market Conditions Summary
Market conditions have quite clearly shifted in favor of trending strategies, and we see that the majority of our Momentum trades on DailyFX+ have seen impressive gains in the past days of trading. Though it is natural for currencies to retrace after such overextended moves, we nonetheless maintain a Momentum-trading bias rolling forward. Recently elevated implied volatility levels suggest that we may see outperformance of Breakout signals as well—especially as they have performed admirably through Friday’s extensive price moves. On the other end of the spectrum, very few pairs seem to be set for range trading through the short term—giving us an “Underweight” bias on Range-based signals.
Definitions:
Volatility Percentile – The higher the number, the more likely we are to see strong movements in price. This number tells us where current implied volatility levels stand in relation to the past 30 calendar days of trading. We have found that implied volatilities tend to remain very high or very low for extended periods of time. As such, it is helpful to know where the current implied volatility level stands in relation to its calendar-year range.
Trend – This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near quarterly lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair’s quarterly range.
Range High – 90-day closing high.
Range Low – 90-day closing low.
Last – Current market price.
Strategy – Based on the above criteria, we assign the more likely profitable strategy for any given currency pair. A highly volatile currency pair (Volatility Percentile very high) suggests that we should look to use Breakout strategies. More moderate volatility levels and strong Trend values make Momentum trades more attractive, while the lowest Vol Percentile and Trend indicator figures make Range Trading the more attractive strategy.