Sergey Kamenshikov, Ph.D.
IFC Markets
Summary
Charles Dow postulates assume that a price of a trading instrument reflects all fundamental data instantly. However market efficiency may be preserved partially due to inertial properties. In this case a trader has to take into account related markets when opening a position: network effect arises. Below we represent a plain FX H4 trading system based on two currency indexes and classic ParabolicSAR indicator. After indexes are incorporated in a single platform a trader obtains an opportunity to analyze EUR/USD currency pair, EURi and vs USDi simultaneously at one screen and one time frame. A conservative trading idea is simple: EUR/USD long (short) position should be opened if EURi and vsUSDi give bullish (bearish) signals simultaneously. If inconsistency occurs and signals of two indexes differ then the opened position should be closed immediately. This strong signal shows us inefficient market stages when all players move as a whole. Our hypothesis is that this property may be used for effective trend following.Latest Live Videos
Editors’ Picks
Gold extends rally, notches new record-high above $4,700
Gold builds on Monday's impressive gains and trades at a new record-high, well above $4,700 on Tuesday. Escalating geopolitical tensions and growing fears of deepening trade conflicts, alongside the broad-based selling pressure surrounding the US Dollar, fuel XAU/USD's rally.
GBP/USD retreats from daily high, holds near 1.3450
GBP/USD corrects lower and trades modestly higher on the day near 1.3450 after coming in within a touching distance of 1.3500 earlier in the day. Investors ignore the data from the UK, which showed that the ILO Unemployment Rate remained unchanged at 5.1% in the three months to November, and continue to pay close attention to the EU-US conflict.
EUR/USD climbs to two-week high above 1.1700
EUR/USD gathers bullish momentum and trades at its highest level in two weeks above 1.1700 on Tuesday after closing in positive territory on Monday. In the absence of high-tier data releases, investors will remain focused on headlines surrounding the EU-US dispute over Greenland.
Bitcoin extends decline as tensions around Greenland mount
Bitcoin price extends losses, trading below $91,000 at the time of writing on Tuesday amid escalating geopolitical tensions over Greenland. Investors are moving toward safe-haven assets, with Gold hitting fresh all-time highs, while BTC continues to nosedive.
Greenland tariffs: What happened, and how to position for the new Europe risk premium
Over the weekend, President Trump threatened a new round of tariffs on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK, with reporting flagging 10% from February 1 and a possible step-up later.
Here is what you need to know on Tuesday, January 20:
Safe-haven flows continue to dominate the action in financial markets on Tuesday as geopolitical tensions remain high. ZEW sentiment data from Germany will be published during the European trading hours, while investors will pay close attention to fresh developments surrounding the EU-US tensions over Greenland.