Discussion of article "Analyzing the Indicators Statistical Parameters"

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New article Analyzing the Indicators Statistical Parameters is published:

The technical analysis widely implements the indicators showing the basic quotes "more clearly" and allowing traders to perform analysis and forecast market prices movement. It's quite obvious that there is no sense in using the indicators, let alone applying them in creation of trading systems, unless we can solve the issues concerning initial quotes transformation and the obtained result credibility. In this article we show that there are serious reasons for such a conclusion.

Author: alex

 

Forum on trading, automated trading systems and testing trading strategies

Press review

newdigital, 2014.02.13 15:46

3 Types of Forex Analysis (based on dailyfx article)


Fundamental

Forex fundamental centers mostly around the currency’s interest rate. Other fundamental factors are included such as Gross Domestic Product, inflation, manufacturing, economic growth activity. However, whether those other fundamental releases are good or bad is of less importance than how those releases affect that country’s interest rate.

As you review the fundamental releases, keep in mind how it might affect the future movement of the interest rates. When investors are in a risk seeking mode, money follows yield and higher rates could mean more investment. When investors are in a risk adverse mentality, then money leaves yield for safe haven currencies.

Technical

Forex technical analysis involves looking at patterns in price history to determine the higher probability time and place to enter and exit a trade. As a result, forex technical analysis is one of the most widely used types of analysis.
Since FX is one of the largest and most liquid markets, the movements on a chart from the price action generally gives clues about hidden levels of supply and demand. Other patterned behavior such as which currencies are trending the strongest can be obtained by reviewing the price chart.

Other technical studies can be conducted through the use of indicators. Many traders prefer using indicators because the signals are easy to read and it makes forex trading simple.

Sentiment

Forex sentiment is another widely popular form of analysis. When you see sentiment overwhelmingly positioned to one direction that means the vast majority of traders are already committed to that position.

Since we know there is a large pool of traders who have already BOUGHT, then these buyers become a future supply of sellers. We know that because eventually, they are going to want to close out the trade. That makes the EUR to USD vulnerable to a sharp pull back if these buyers turn around and sell to close out there trades.


 

Hodrick-Prescott filter

The Hodrick-Prescott filter is used in macroeconomics, especially in real business cycle theory to separate the cyclical component of a time series from raw data. It has a zero lag. There is a common disadvantage of such zero lag filters - the recent values are recalculated.

More information on one sided HP filter you can find here : statistics - Hodrick–Prescott filter (one-sided version) - Mathematica Stack Exchange or here time series - Formula for one-sided Hodrick-Prescott filter - Cross Validated and in pdf file attached to this post.


Forum threads (thanks to mladen)

  • MACD of a Hodrick-Prescott filter - the first post of the thread  
  • Hodrick Prescott Filter (modified adapted Kurt Annens version) - the post 
  • Hodrick-Prescott filter HMA mode indicator - the post 
  • end-point HMA variation of Hodrick-Prescott filter - the post
  • Hodrick-Prescott filter "no lambda" indicator - the post 
  • Hodrick-Prescott filter "no lambda" histo indicator - the post 
  • goertzel_browser (simple versions, MTF, coloring, etc; Hodrick Prescott filter is used)
    - goertzel_browser_5.2.1 indicator - the post, 
    - goertzel_browser_5.3 indicator - the post 
    - goertzel_browser_5.4 indicator - the post
    - goertzel_browser_5.4_nrp indicator - the post 
    - goertzel_browser_5.5 indicator - the post (standalone indicator) 
    - goertzel_browser_5.51 indicator - the post 
    - goertzel_browser_5.52 indicator - the post 
    - goertzel_browser_5.53 indicator - the post  
    - goertzel_browser_5.1_cs_detrendampsmooth_1 indicator - the post 
  • and much more from search here

The articles

CodeBase

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