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
EUR/USD holds above 1.0700 ahead of US jobs report
EUR/USD stays in a consolidation phase above 1.0700 after closing the previous two days in positive territory. Investors eagerly await April jobs report from the US, which will include Nonfarm Payrolls and Unemployment Rate readings.
GBP/USD advances to 1.2550, all eyes on US NFP data
The GBP/USD pair trades on a stronger note around 1.2550 amid the softer US Dollar on Friday. Market participants refrain from taking large positions as focus shifts to April Nonfarm Payrolls and ISM Services PMI data from the US.
Gold remains stuck near $2,300 ahead of US NFP
Gold price struggles to gain any meaningful traction and trades in a tight channel near $2,300. The Fed’s less hawkish outlook drags the USD to a multi-week low and lends support to XAU/USD ahead of the key US NFP data.
XRP edges up after week-long decline as Ripple files letter in reply to SEC’s motion
Ripple filed a letter to the court to support its April 22 motion to strike new expert materials. The legal clash concerns whether SEC accountant Andrea Fox's testimony should be treated as a summary or expert witness.
US NFP Forecast: Nonfarm Payrolls gains expected to cool in April
The NFP report is expected to show that the US economy added 243,000 jobs last month, sharply lower than the 303,000 job creation seen in March. The Unemployment Rate is set to stay unchanged at 3.8% in the same period.