Trading and training
video (from youtube for example) about forex and financial market in
Please upload forex video you consider as interesting one. No direct advertising and no offtopic please.
Watch the fifth episode of the "Traders Whiteboard" series and learn from master trader Adam Hewison on how to incorporate this key element into your own trading.
How to Build a Four-Point Trading Plan
The most important aspect of a trading plan is the definition of the
type of trader that you are. And if you’re a new trader and aren’t quite
sure of what type of trader you want to be, it’s ok to modify this as
you see more results and get a better idea of which direction you want
to move towards.
The benefit behind this is that it helps to keep you grounded. Let’s say
that you’re a technical swing trader, but with an upcoming NFP report
you see an especially attractive setup that you decide is worth of a
quick scalp position.
Well, if that scalp doesn’t work out and a loss is taken – the ‘what’ of
a trading plan serves as a reminder that you were trading outside of
your comfort zone.
A trading plan is worthless without a definition of ‘how’ a trader wants
to enter and manage positions. This can be as simple as ‘I’m going to
scalp trends,’ to as complex as ‘I’m going to take scalps with 8 period
EMA crossovers on the 5 minute chart when price is below the 34 period
It really just depends on how in-depth you want to be. The benefit of
having a more well-defined strategy in this portion of the plan allows
you to come back later to troubleshoot if results aren’t meeting your
expectations. A more loosely-defined strategy in this section of the
plan may lead to a lack of discipline when you’re actually placing
trades as the trader hasn’t made the commitment to the strategy by
integrating it as part of their trading plan.
An important note here – the strategy should be yours, customized for
your unique risk tolerance and personality. This should also mesh with
the ‘what’ of the trading plan, as this is an extension of the type of
trader you are.The ‘When’
This part of the plan is often missed by traders; as many markets
somewhat define when you’re actually able to trade. If you’re a stock
trader, well you have to adhere to open market hours. Even then, many
traders choose to focus on the first or last hour of the day, as this is
where the majority of volatility will often take place.
But in the Forex market, there is quite a bit more flexibility available
to the trader – and this isn’t always a positive thing. The FX Market
moves 24 hours a day, and will often display differing characteristics
based on the time-of-the-day and the area of the world that is providing
The importance of defining the ‘when’ of a trading plan is that it
allows traders to learn and improve upon their strategies and approach
with as few moving variables as possible. If a trader normally
implements their strategy during the Asian session, but for some reason
couldn’t get to sleep and finds themselves trading during the London
open with the same strategy; they are introducing an entirely new and
unfamiliar risk into their approach.
The last part of the plan is, in my opinion, the most important. This is
where you write down your goals and reasons for becoming a trader. This
can be as ambitious as ‘I want to be a billionaire,’ to as reasonable
as ‘I want to replace my income so that I can spend more time with my
family.’ I strongly encourage you to set realistic, honest goals
otherwise they’re nearly impossible to adhere to. I speak from
Trading isn’t easy. It can be difficult, and tough, and costly, and
frustrating all at the same time. Especially when we have fundamental
environments that, as we say in Texas, ‘is about as clear as mud.’
The ‘why’ of a trading plan serves as the reminder for why you’re
willing to go through the pain; and when times get difficult or a major
drawdown is seen on the account, this can help to provide perspective of
‘the bigger picture.’ This allows the trader to take a step back in
order to realize that the reasons they want to become a successful
trader are worth any trials or tribulations that they may go through.
If the goal doesn’t seem worth the frustration any longer, then at the
least you know its time to take a step back and either re-evaluate your
options, or quit.
Ichimoku - Kumo Cloud Studies I
Ichimoku - Ideal Ichimoku Scenarios
Forum on trading, automated trading systems and testing trading strategies
USDJPY Technical Analysis 23.06 - 30.06 : Rally Finishing to Ranging
newdigital, 2013.06.27 12:07
Well ... what I am explaining here by text and charts - it is understandable for traders. But there are traders and coders on the forum. And I think we all know that they are using different "forex english" in some cases. So, I am just translating some terms/words I am using for technical Ichimoku analysis onto "coding english" language :) :
Something Interesting in Financial Video October 2013
newdigital, 2013.10.27 15:37
Second part of the TK Cross video explaining about the Kumo future as a filter on your cross.
Tenkan Sen / Kijun Sen Cross
The Tenkan Sen / Kijun Sen Cross signal occurs when the Tenkan Sen (Turning line) crosses the Kijun Sen (Standard line).
A bullish signal occurs when the Tenkan Sen crosses from below to above the Kijun Sen
Kijun Sen Cross
The Kijun Sen Cross signal occurs when the price crosses the Kijun Sen (Standard line).
A bullish signal occurs when the price crosses from below to above the Kijun Sen
newdigital, 2014.01.07 07:56
Watch Price In Relation To Ichimoku Cloud (adapted from dailyfx article)
Ichimoku is a trend following indicator that almost anyone can learn to
use with ease. When trading with Ichimoku, you’re often advised to start
with the cloud to get a feel for whether or not price is trending up or
down to past points on the chart. However, to get a better feel for the
strength of the trend, it is better to see how price is reacting to the
cloud rather than only looking where price is in relation to the cloud
at any point in time.
Price & Cloud Interactions
USDJPY Has Demonstrated a Strong Trend Due To Multiple Cloud Bounces:
The cloud is a dynamic indicator that takes into consideration two
aspects of a currency pair. In an uptrend, the top line of the cloud,
traditionally known as Senkou Span A is composed of the mid-point
between the 9 & 26 moving average based on mid-prices, or Tenkan-Sen
& Kijun-Sen, and pushed forward 26-periods in order to give you a
reference for the strength of a move. If current price is above the
cloud, then current price is stronger than the mid-point of the 9 &
26 moving average from 26-periods ago, identifying the strength of the
The cloud’s bottom line in an uptrend, traditionally known as Senkou
Span B, is composed of the mid-point over the last 52-periods on the
chart and is also pushed forward 26-periods just like the top line.
Therefore, if the current candle is above the cloud, which was created
from 26-periods ago, then you can see that price is above both the
mid-point of the 9 & 26 moving average as well as the mid-point over
the last 52-sessions.
Price Bouncing Off Cloud Shows You a Well-Supported Trend
The key point of this article is that it’s not enough to simply know
where price is in relation to the cloud to have a strong trend based
trade. What you need to do is see if price is consistently on one side
of the cloud or if price flips on either side of the cloud showing a
very weak or non-existent trend. If there is no consistency with price
and is consistently bouncing higher off the cloud proving the cloud as
support and that the uptrend is strong, then it is best to take Ichimoku
off your charts as Ichimoku doesn’t work well in ranges and will likely
only clog up the charts if there is no clear trend.
A Cloud & Price Example Trade with USDJPY
Entry to Buy: 105.00 (Breakout through resistance)
Stop: 103.70 (recent price action low and below May 2013 High – Pivotal Support)
Limit: 107.50 (Monthly R2 Pivot)
If this is your first reading of the Ichimoku report, here is a definitive guide on the versatile indicator:
How to Invest using Bollinger Bands
This video show you how to use technical analysis using Bollinger Bands to invest in stocks
Something Interesting to Read January 2014
newdigital, 2014.01.16 10:26
Bollinger on Bollinger Bands
John A. Bollinger
Over the past two decades, thousands of veteran traders have come to
view Bollinger Bands as the most representative**and reliable**tool for
assessing expected price action. Now, in the long-anticipated Bollinger
on Bollinger Bands, John Bollinger himself explains how to use this
extraordinary technique to effectively compare price and indicator
Traders can look to this techniques-oriented book for hundreds of valuable insights, including:
Indicators: Bollinger Bands ®
newdigital, 2013.08.06 13:49
Bollinger Bands Forex Trading Indicator
Developed by John Bollinger.
The Bollinger Bands indicator acts as a measure of
volatility. This indicator is a price overlay indicator. The indicator
consists of three lines; the middle line (moving average), an upper line
and a lower line. These three bands will enclose the price and the
price will move within these three bands.
This indicator forms upper and lower bands around a
moving average. The default moving average is the 20-SMA. This
indicator use the concept of standard deviations to form their upper
and lower Bands.
The example is shown below.
Bollinger Bands Indicator
Because standard deviation is a measure of
volatility and volatility of the market is dynamic, the bands keep
adjust their width. higher volatility means higher standard deviation
and the bands widen. Low volatility means the standard deviation is
lower and the bands contract.
Bollinger Bands use price action to give a large amount of information. The information given by the this indicator includes:
This is part 2 of the video series that shows how to use technical analysis using Bollinger Bands to invest in stocks.
newdigital, 2013.08.06 13:51
How Bollinger Bands Indicator Works
Bollinger Bands calculations uses standard deviation to plot the bands, the default value used is 2.
Bollinger considered the best default for his
indicator to be 20 periods moving average and the the bands are then
overlaid on the price action.
Standard Deviation is a statistics concept. It
originates from the notion of normal distribution. One standard
deviation away from the mean either plus or minus, will enclose 67.5 %
of all price action movement. Two standard deviations away from the mean either plus or minus, will enclose 95 % of all price action movement.
This is why the Bollinger Bands indicator uses the standard deviation of 2 which will enclose 95 % of all price action.
Only 5 % of price action will be outside the bands, this is why
traders open or close trades when price hits one of the outer Bands.
The Bollinger Bands indicator main function is to
measure volatility. What the Bollinger Bands upper and lower limits try
to do is to confine price action of up to 95 percent of the possible
This indicator compares the current closing
price with the moving average of the closing price. The difference
between them is the volatility of the current price compared to the
moving average. The volatility will increase or decrease the standard
newdigital, 2013.08.06 13:57
Bollinger Bands Indicator Bulge and Squeeze Technical Analysis
The Bollinger Bands are self adjusting which means the bands widen and narrow depending on volatility.
Standard Deviation is the statistical measure of the
volatility used to calculate the widening or narrowing of the bands.
Standard deviation will be higher when prices are changing
significantly and lower when markets are calmer.
The Bollinger Squeeze
Narrowing of Bands is a sign of consolidation and is known as the Bollinger band squeeze.
When the Bollinger Bands display narrow standard
deviation it is usually a time of consolidation, and it is a signal that
there will be a price breakout and it shows people are adjusting their
positions for a new move. Also, the longer the prices stay within the
narrow bands the greater the chance of a breakou
The Bollinger Bulge
The widening of Bands is a sign of a breakout and is known as the Bulge.
Bollinger Bands that are far apart can serve as a
signal that a trend reversal is approaching. In the example below, the
bands get very wide as a result of high volatility on the down swing.
The trend reverses as prices reach an extreme level according to
statistics and the theory of normal distribution. The "bulge" predicts
the change to downtrend.
Ichimoku - Multiple Confirmations
Ichimoku - Kumo Cloud Studies I
Indicators: Ichimoku Cloud
newdigital, 2013.11.25 12:23
Ichimoku Cloud (based on The Definitive Guide to Trading Trends with Ichimoku Cloud article)
Many traders are asked what indicator they would
wish to never do without. The answer has never wavered as there is one
indicator that clearly illustrates the current trend, helps you time
entries, displays support and resistance, clarifies momentum, and shows
you when a trend has likely reversed. That indicator is Ichimoku Kinko
Hyo or more casually known as Ichimoku.
Ichimoku is a technical or chart indicator that is
also a trend trading system in and of itself. The creator of the
indicator, Goichi Hosada, introduced Ichimoku as a “one glance”
indicator so that in a few seconds you are able to determine whether a
tradable trend is present or if you should wait for a better set-up on a
Before we break
down the components of the indicator in a clear and relatable manner,
there are a few helpful things to understand. Ichimoku can be used in
both rising and falling markets and can be used in all time frames for
any liquid trading instrument. The only time to not use Ichimoku is when
no clear trend is present.
Always Start With the Cloud
The cloud is
composed of two dynamic lines that are meant to serve multiple
functions. However, the primary purpose of the cloud is to help you
identify the trend of current price in relation to past price action.
Given that protecting your capital is the main battle every trader must
face, the cloud helps you to place stops and recognize when you should
be bullish or bearish. Many traders will focus on candlesticks or price
action analysis around the cloud to see if a decisive reversal or
continuation pattern is taking shape.
In the simplest
terms, traders who utilize Ichimoku should look for buying entries when
price is above the cloud. When price is below the cloud, traders should
be looking for temporary corrections higher to enter a sell order in the
direction of the trend. The cloud is the cornerstone of all Ichimoku analysis and as such it is the most vital aspect to the indicator.
Time Entries with the Trigger & Base Line
Once you have
built a bias of whether to look for buy or sell signals with the cloud,
you can then turn to the two unique moving averages provided by
Ichimoku. The fast moving average is a 9 period moving average and the
slow moving average is a 26 period moving average by default. What is
unique about these moving averages is that unlike their western
counterparts, the calculation is built on mid-prices as opposed to
closing prices. I often refer to the fast moving average as the trigger
line and the slow moving average as the base line.
components are introduced in a specific order because that is how you
should analyze or trade the market. Once you’ve confirmed the trend by
recognizing price as being below or above the cloud, you can move to the
moving averages. If price is above the cloud and the trigger crosses
above the base line you have the makings of a buy signal. If price is
below the cloud and the trigger crosses below the base line you have the
makings of a sell signal.
Confirm Entries with the Mysterious Lagging Line
In addition to the mystery of the cloud, the lagging
line often confuses traders. This shouldn’t be the case as it’s a very
simple line that is the close of the current candle pushed back 26
periods. When studying Ichimoku, I found that this line was considered
by most traditional Japanese traders who utilize mainly Ichimoku as one
of the most important components of the indicator.
Once price has broken above or below the cloud and
the trigger line is crossing the base line with the trend, you can look
to the lagging line as confirmation. The lagging line can best confirm
the trade by breaking either above the cloud in a new uptrend or below
the cloud in a developing downtrend. Looking above, you can see that the
trend often gathers steam nicely after the lagging line breaks through
the cloud. Another benefit of using the lagging line as a confirmation
indicator is that the lagging line can build patience and discipline in your trading
because you won’t be chasing the initial thrust but rather waiting for
the correction to play out before entering in the direction of the
Trading With Ichimoku Checklist
Now that you know the components of Ichimoku here is
a checklist that you can print off or use to keep the main components
of this dynamic trend following system:
1.Where is Price in Relation to the Cloud?
2. Is price consistently on one side of the cloud or is price whipping around on both sides consistently?
3. Which level of the Ichimoku would like to use to place your stop?
This is today's video about January Barometer :
newdigital, 2014.02.03 17:24
I never know about this fundamental indicator ... so -
January barometer - (from wikipedia) : "The January barometer is the hypothesis that stock market
performance in January (particularly in the U.S.) predicts its
performance for the rest of the year. So if the stock market rises in
January, it is likely to continue to rise by the end of December. The
January barometer was first mentioned by Yale Hirsch in 1972"
This is the page #16 of 2008 edition of this book (Stock Trader's Almanac 2008) :
This is January so ...
This is the 5th video in a series on economic reports created for all
markets, or for those who simply have an interest in economics. In this
lesson we cover the ISM Manufacturing report.
Description #1 :
ISM Index (Institute of Supply
Management's index, former NAPM — National Association of Purchasing
Managers) is the index of business activity.
ISM figures above 50 are usually
considered as an indicator of expansion, while values below 50 indicate
contraction. Typically, when ISM approaches 60 investors begin to worry
about possible economic overheating, inflation increase and the
corresponding measures (raising rates) by the Federal Reserve Bank.
Figures below 40 entail talks about recession.
ISM is released just before unemployment data are announced, and is often used to refine data by Bureau of Labor Statistics.
Description #2 :
newdigital, 2014.01.17 15:52
How Forex News Traders Use ISM Numbers (adapted from dailyfx article)
NZDUSD M5 : 17 pips prrice movement by USD ISM Manufacturing PMI :
What is ISM?
A country’s economy is as strong as its supply chain. The Institute for
Supply Management (ISM) measures the economic activity from both the
manufacturing side as well as the service side. Formed in 1915, ISM is
the first management institute in the world with over 40,000 members in
90 countries. Since it can draw from information gathered from the
surveying its large membership of purchasing managers, the ISM economic
news releases are carefully watched by Forex traders around the world as
a reliable guide to economic activity.
ISM publishes three surveys; manufacturing, construction, and services.
Published on the first business day of the month, the ISM Purchasing
Managers Index (PMI) is compiled from surveys of 400 manufacturing
purchasing managers. These purchasing managers from different sectors
represent five different fields; inventories and employment, speed of
supplier deliveries, production level, and new orders from customers.
XAUUSD M5 : 3345 pips price movement by USD - ISM Non-Manufacturing PMI news event :
In addition, ISM construction PMI is released on the second business day
of the month, followed by services on the third business day. Forex
traders will look to these releases to determine the risks at any given
time in the market.
EURUSD M5 : 37 pips price movement by USD - ISM Non-Manufacturing PMI news event :
Forex Market Impact
The Manufacturing and Non-manufacturing PMI’s are big market movers.
When these reports come out at 10:30 AM ET, currencies can become very
volatile. Since these economic releases are based on the previous
month’s historical data gathered directly from industry professionals,
Forex traders can determine if the US economy is expanding or
Forex traders will compare the previous month’s number with the
forecasted number that economists have published. If the released PMI
number is better than the previous number and higher than the forecasted
number, the US dollar tends to rally. This is where fundamental and
technical analysis comes together to create a trade setup.
AUDUSD M5 : 21 pips price movement by USD - ISM Non-Manufacturing PMI news event :
In the example above, notice how the better than expected PMI number
triggered a US dollar rally against the Euro. As seen in the chart above
of the EURUSD, the ISM Non-Manufacturing was not only above 50 but at
55.4, beat the forecasts calling for a drop from 54.4 to 54.0.
When an economic release beats expectations, like in the example above,
sharp fast moves can result. In this case, EURUSD dropped 22 pips in 15
minutes. Traders often choose the Euro as the “anti-dollar” to take
advantage of capital flows between two of the largest economies.
The Euro zone has a large liquid capital markets which can absorb the
huge waves of capital seeking refuge from the U.S. So a weak US ISM
Non-Manufacturing number usually leads to a dollar sell-off and a rise
in the Euro. Another scenario is when the number released is in line
with forecasts and/or unchanged from the previous month, then the US
dollar may not react at all to the number.
AUDUSD M5 : 32 pips price movement by USD - ISM Manufacturing PMI :
Overall, an ISM PMI number above 50 indicates that the economy is
expanding and is healthy. However, a number below 50 indicates that the
economy is weak and contracting. This number is so important that if the
PMI is below 50 for two consecutive months, an economy is considered in
PMI’s are also compiled for Euro zone countries by the Markit Group
while US regional and national PMIs are compiled by ISM. As you can see,
traders have good reason to pay special attention to the important
releases from the Institute of Supply Management.
A short video introducing traders to the subject of currency correlations.
Indicators: MFCS Currency Correlation Chart
newdigital, 2013.10.26 09:29
Currency Pairs Correlation in Forex Market: Cross Currency Pairs
As a forex trader, if you check several different currency pairs to find the trade setups, you should be aware of the currency pairs correlation, because of two main reasons:
1- You avoid taking the same position with several correlated
currency pairs at the same time and so you do not multiply your risk.
Additionally, you avoid taking the positions with the currency pairs
that move against each other, at the same time. 2- If you know the
currency pairs correlations, it may help you to predict the direction
and movement of a currency pair, through the signals that you see on the other correlated currency pairs.
Now I explain how currency pairs correlation helps. Lets start with the 4 major currency pairs: EURUSD ; GBPUSD ; USDJPY and USDCHF.
In both of the first two currency pairs (EURUSD and GBPUSD), USD
works as the money. As you know, the first currency in currency pairs is
known as the commodity and the second one is the money. So when you buy
EURUSD, it means you pay USD to buy Euro. In EURUSD and GBPUSD, the
currency that works as the money is the same (USD). The commodity of
these pairs are both related to two big European economies. These two
currencies are highly connected and related to each other and in 99% of
the cases they move on the same direction and form the same buy/sell
signals. Just recently, because of the economy crisis, they moved a
little differently but their main bias is still the same.
What does it mean? It means if EURUSD shows a buy signal, GBPUSD
should also show a buy signal with minor differences in the strength and
shape of the signal. If you analyze the market and you come to this
conclusion that you should go short with EURUSD and at the same time you
decided to go long with GBPUSD, it means something is wrong with your
analysis and one of your analysis is wrong. So you should not take any
position until you see the same signal in both of these pairs. Of
course, when these pairs really show two different direction (which
rarely happens), it will be a signal to trade EUR-GBP. I will tell you
and USDJPY behave so similar but not as similar as EURUSD and GBPUSD,
because in USD-CHF and USDJPY, money is different. Swiss Franc and
Japanese Yen have some similarities because both of them belong to oil
consumer countries but the volume of industrial trades in Japan, makes
Generally, when you analyze the four major currency pairs, if you see
buy signals in EURUSD and GBPUSD, you should see sell signals in
USDJPY. If you also see a sell signal in USD-CHF, then your analysis is
more reliable. Otherwise, you have to revise and redo your analysis.
EURUSD, GBPUSD, AUDUSD, NZDUSD, GBPJPY,
EURJPY, AUDJPY and NZDJPY usually have the same direction. Just their
movement pattern sometimes becomes more similar to each other and
What do I prefer?
If I find a sell signal with EURUSD and GBPUSD and a buy signal with
USDJPY, I prefer to take the short position with one of the EURUSD or
GBPUSD because downward movements are usually stronger. I will not take
the short position with EURUSD or GBPUSD and the long position with
USDJPY at the same time, because if any of these positions goes against
me, the other one will do the same. So I don’t double my risk by taking
two opposite positions with two currency pairs that move against each
How to use the currency pairs correlation to predict the direction of the market?
When I have a signal with a pair, but I need confirmation to take the
position, I refer to the correlated currency pairs or cross currency
pairs and look for the confirmation. For example I see a MACD Divergence in USDCAD
four hours chart but there is no close support breakout in USDCAD four
hours or one hour chart. I want to take a short position but I just need
a confirmation. If I wait for the confirmation, it can become too late
and I may miss the chance. I check a correlated currency pair like
USDSGD and if I see a support breakout in it, I take the short position
with USDCAD. Now the question is why I don’t take the short position
with USDSGD and I use its support breakout to go short with USDCAD? I do
it because USDCAD movements are stronger and more profitable. I use
USDSGD just as an indicator to trade USCAD.
It happens that you take a position with a currency pair, but it
doesn’t work properly and you don’t know if it was a good decision or
not. On the other hand, you don’t see any sharp signal on that currency
pair to help you decide if you want to keep the position or close it. In
such cases, you can check a correlated currency pair and look for a
continuation or reversal signal. It helps you to decide about the
position you have.
Sometimes, some correlated currency pairs don’t move in the way that
they are supposed to move. For example EURUSD and USDJPY go up at the
same time, whereas they usually move against each other. It can happen
when Euro value goes up and USD value doesn’t have a significant change,
but at the same time JPY value goes down, because of some reason. In
these cases, you can use the below table to find and trade the currency
pair that its movement is intensified by an unusual movement in two
other currency pairs. In this example, if EURUSD and USDJPY go up at the
same time, EURJPY will go up much stronger (see the below chart).
Or if EURUSD goes up and AUDUSD goes down at the same time, EUR-AUD goes up strongly.
Another important example: If EURUSD goes up and GBPUSD goes down at the same time, EURGBP
goes up strongly. Maybe this is the most important case that we can
trade based on this rule. It happens many times that EURUSD and GBPUSD
move against each other and that is the best time to trade EURGBP. Now
you know why EURGBP doesn’t move strongly most of the time. It is
because EURUSD and GBPUSD move in the same direction most of the time.
For example they go up at the same time and so EURGBP doesn’t show any
significant movement because when both of the currencies of a currency
pair go up or down at the same time, that currency pair doesn’t show any
strong movement and direction (I hope you know why a currency pair goes
up or down. It goes up when the first currency value goes up OR the
second currency value goes down. For example EURUSD goes up, if Euro
value goes up or USD value goes down. If this happens at the same time,
then EURUSD goes up much stronger).
The below chart includes almost all of these unusual movements and their results on the third currency pair.
if EURUSD and USDJPY then EURJPY means if EURUSD and USDJPY go up at the same time, then EURJPY goes up much stronger.
Currency Correlations, Part II
The second video in a two-part series on currency correlations.
newdigital, 2014.02.04 08:27
Trade Gold Using Currency Correlations (based on dailyfx article)
Secondly, the AUD has a high correlation to gold due to Australia’s
extensive gold mining operations. As gold prices fluctuate, this
increases or decreases the amount of funds transferred into AUD to make
purchases of the metal. These transfers essentially change demand for
the currency and can directly cause changes in the AUDUSD currency pair
Trading the Correlation
The key to trading positively correlated assets, is finding a direction
from one of the underlying assets before making a trading decision. If
traders are seeing the AUDUSD push to lower lows, this could easily be
the catalyst for a bearish bias on Gold. Conversely if gold is trending
upwards, this can also be a signal of a new uptrend on the AUDUSD.
As you can see, this information is very useful to traders that have a
general fundamental view of the market. If you have an opinion on Gold
or the US Dollar this can be relayed into a trade idea. Often traders
that are bullish on Gold choose to trade the AUDUSD instead of the metal
itself. The Aussie Dollar carries a 2.50% banking rate, meaning traders
can earn additional interest while executing a buy order on a
positively correlated opinion of Gold. If a trader is bearish on the
AUDUSD currency pair, traders can in turn sell gold to avoid
accumulating interest on their trading balance.
newdigital, 2014.02.04 09:27
Australian Dollar Strongly Correlated to Gold, Silver, Steel Prices (based on this article)
View forex correlations to the SPDR Gold ETF Trust
(GLD), United States Oil Fund ETF (USO), SPDR Dow Jones Industrial
Average ETF Trust (DIA), UK FTSE 100 Index, and IShares Silver Trust ETF